Soybean oil struggled overnight with changes to 45Z tax credits.

This morning’s trade is mixed following a mostly lower evening session. Last night’s correction began as soybean oil moved sharply lower due to disappointment over the 45Z tax credits being diminished in the Congressional budget bill. The credits lost transferability, reducing their value to biofuel producers. Soybean oil has been under pressure as political wrangling continues over biofuel incentives. The bill now heads to the Senate, where more hurdles are expected.

Meanwhile, wheat and corn futures recovered from overnight losses, supported by ongoing weather concerns. U.S. weather remains mixed, with rain in the Eastern Corn Belt and mostly warm and dry conditions in the Western Corn Belt. Given current planting reports and weather conditions, it is becoming increasingly difficult to believe the existing U.S. acreage estimates. Any official acreage revisions, if necessary, will be published at the end of June.

We continue to hear that progress is being made on U.S. trade deals, but only the UK agreement has been officially announced. White House officials indicate that deals with the EU and India are nearing completion, and talks with Japan are scheduled for tomorrow. However, these deals are not expected to remove tariffs entirely, only reduce them. Traders are growing impatient with the slow pace of progress, especially as consumer sentiment continues to decline.

This morning’s export sales were very supportive for corn and wheat. Old crop corn export sales came in at 1.19 million metric tons, well above the level needed to meet USDA’s export goals through September. As a result, USDA is likely to revise last year’s crop higher in upcoming WASDE reports. Basis premiums are developing, although not as strongly as expected, despite tightening carryout levels that now likely fall below 1.3 billion bushels. New crop wheat export sales were also strong at 882,200 metric tons.

Weather remains a major factor. Below-normal temperatures persist across the Central U.S. and are expected to continue for the next 10 days. More seasonal temperatures may not arrive until June. The 10 to 15-day forecast offers some hope for rainfall in Alberta and Saskatchewan, but these longer-range models are the least reliable. In China, weather concerns are also making headlines. Excessive rainfall in the southern regions is damaging winter rapeseed crops, while dry conditions continue to plague key wheat-producing areas, curtailing overall production.

In livestock, live cattle futures moved higher yesterday, while feeder cattle declined. A steady outlook is expected this morning, although feeder cattle may remain soft as the feeder index slipped again yesterday, and rising corn prices continue to weigh on deferred feeder valuations.

Cash trade began yesterday in the North at $229 to $230, which was steady with last week. Dressed sales ranged from $360 to $370, a gain of $2 to $12 over last week. In the South, bids ranged from $224 to $227, reflecting gains of $4 to $7.

Boxed beef values continued to climb on Wednesday. Choice cuts increased by $0.80, while select cuts rose $3.32. Futures market recovery remains timid compared to last week’s sharp losses, with the market likely waiting on Friday’s Cattle on Feed report. Current estimates put cattle on feed at 98.5 percent, placements at 96.8 percent, and marketings at 96.7 percent compared to a year ago.