Wheat prices led the overnight recovery as soybeans challenged the 100-day MA.

This morning’s grain trade is higher across the board, with wheat leading the gains due to dry weather in the Black Sea region. Notably, the U.S. dollar is trading below par (100.00) for the first time in three years. This represents a decline of well over 10% since January and has helped fuel the surge in metals—now spreading into commodities. This dollar weakness is essentially offsetting the 10% tariffs imposed by Trump for the next 90 days. The EU has been purchasing U.S. grains this week, a trend that looks set to continue.

Overnight, China raised its tariffs to 125%,while U.S. tariffs now stand at a higher level due to the additional 20% fentanyl tariff, bringing the total to 145%. China stated it would not raise tariffs further, as current levels have rendered trade nearly negligible. The U.S. is still considering a vessel tax, which could further pressure China if the political tensions escalate.

U.S. exports remain strong for corn and decent for soybeans as China continues to purchase sizable quantities of soybeans well into August and September. This has pushed July/August FOB premiums to $0.90–$0.95 over, compared to Gulf premiums of $0.72–$0.78 over. As a result, other soybean importers are increasingly turning to the U.S. due to improved competitiveness. Unlike in 2018, when grain prices were high early in the year due to drought in Argentina, soybean plantings surged, causing the market to break after June 1 when growing conditions improved.

Rainfall remains limited in the Black Sea region through late April, reviving drought concerns. Above-normal temperatures are also expected to return to central Europe and spread east next week. Meanwhile, warm and dry conditions are forecast for the Plains and Western Midwest through April 23. Drought stress is building in the HRW Plains wheat regions, with another 10–12 days of dry weather and rising temperatures on the horizon. Highs are expected to reach the lower to mid-90s early next week, adding further stress to crops.

Yesterday’s 11–15 day forecast had suggested potential moisture for Kansas, which pressured HRW wheat markets. However, today’s forecast shifts any meaningful rain to eastern Kansas and into Ohio. Another rainfall system appears likely, and temperatures are expected to average near to above normal in Kansas. It seems the Plains drought will intensify into May and may even shift northward.

Yesterday, the cattle trade tumbled again amid a sharply weaker stock market. Today, the market is recovering moderately, with the Dow up 228 points, now just over 40,000. Live cattle markets saw some light cash trade, with northern sales reported at $208–209—$2–3 lower than last week. Dressed sales were down $9–10 from earlier in the week, coming in at $327–328. In the South, live trade continued at $204, $4 lower than the previous week.

In yesterday’s April WASDE report, the USDA raised the live cattle price forecast for the year. Q2 saw a $6 increase from the March report, putting it at $204. Q3 rose by $8 to $206, and Q4 was up $4 to $204.