Wheat leads overnight recovery bounce in the grain trade.

This morning’s grain trade is higher, led by wheat, as nearly complete dryness is expected to persist in the HRW wheat belt for the next two weeks. Additionally, SRW wheat is at risk of production losses due to massive flooding in the South-Central US following weekend storms. One-third of the US SRW wheat crop is at risk due to standing water and cool temperatures. Managed money is sitting on a record wheat short for this time of year and could be vulnerable if liquidity forces them to diminish their position to shore up stocks. Soybeans have found a bid at last week’s low and are recovering modestly as the Chinese have been actively loading US soybeans. Just 400-800,000 MTs of known sales are open that could be canceled. China now does not typically return to secure new crop soybeans until August, giving the Trump administration a window for negotiations.

Massive flooding has been occurring across the Delta and the Southeast Midwest from weekend storms, which dropped 3-12 inches of rainfall. In the past week, areas of AR, TN, KY, and SE MO, as well as S IL, have received over a foot of rainfall, which has halted spring planting and is causing winter crops to stand in water. The EU and GFS, along with the Canadian models, project a return of moderate rainfall for these areas within the 11-15 day window. A dry but regionally cold pattern lies ahead, with primary concerns this morning still centered on a deepening of Plains drought and lack of sustained warmth across the Northern Plains and Great Lakes regions. The NASS will publish its first national crop progress report this afternoon. The winter wheat crop is expected to rate 43-46% good excellent versus 56% in early April last year.

Another stock market freefall occurred again last night, but by morning, losses had been cut by more than half, as fears of escalating trade war liquidation are slowing. There have been improvements over the weekend, with other countries joining Vietnam in requesting a quick reduction of tariffs to 0%, with a total of 50 countries already in negotiations. China will obviously be the major holdout but risks being isolated if the US can secure the terms it wants with the bulk of the trading countries around the world.

USTR Jamison Greer will testify twice this week on Capitol Hill before the Senate Finance and House Ways and Means committees. He is expected to explain last week’s tariffs and what is ahead for the resolution. Many senators will try to score political points and take him to task, so his answers will need to be well thought out and explained.

Live and feeder cattle futures collapsed late last week, settling limit down on Friday. This will produce expanded limit capabilities today of 150% of Friday’s movement. Technical selling of liquidation from index funds that have rebounded to another record-high position is underway. Fundamentals reflect that tight cattle numbers are going out the door for the moment, as the market focuses on weakening demand if a recession is ahead and just flat-out index funds wanting out. Last week, live sales in the north were down $3 at $210, and dressed sales were mainly $335, which was $4 lower for the week. Live trade in the South was mostly $208, which was $2 lower than the previous week.

Cattle slaughter was off 18,000 head last week and was 23,000 less than a year ago. Cumin to slaughter for the year is down 5% from 2024, marking the lowest level since 2016. The average carcass weight in 2025 was 870 pounds, a record 33 pounds heavier than a year ago. Box beef values last week were mixed, with the choice cutout gaining $5.63, the choice primal rib gaining $27/CWT for the week, and the loin primal gaining $15.

Targeted support for June cattle is in the range of 193-196, with May feeders potentially targeting 266-271 as a major support pocket to stabilize in.