Corn and wheat softened overnight while beans maintain price strength.

This morning’s grain trade is mixed after a mostly firm start last night. Wheat and corn values have weakened due to improved weather forecasts for the Western Corn Belt, with rain moving through some of those states this morning. Soybeans remain firm as President Trump announced a pause on US tariffs against the European Union. Last Friday, he planned to raise tariffs to 50% on June 1, but following a phone call with EU officials on Monday, he delayed the increase until July 9 based on a promise to fast-track trade talks. Trade Secretary Bessent stated that several trade deals will be announced within the next 90 days, but the market has grown tired of repeated promises and is now demanding more immediate, tangible progress.

Strength in soybean oil is also supporting soybeans this morning, with hope building for an EPA announcement on RVO obligations for 2026 through 2028. Rumors suggest the obligation may align closely with industry proposals of 5.2 to 5.5 billion gallons. The RVO is currently under review by the Office of Management and Budget for its budgetary impact, with a final decision not expected until mid-June. Soy oil futures rallied overnight on speculation that the EPA may make an announcement this week.

NASS will release crop condition and progress reports this afternoon. Expectations are for spring wheat ratings to show good to excellent conditions in the mid-70% range. Planting progress should reflect corn above 85% and soybeans near or above 75% through Sunday.

What is notably absent from this morning’s trade discussion, and should concern the index funds heavily short wheat and corn, is the escalation in Ukraine. On Sunday, President Putin authorized significant strikes deep into Ukraine, causing civilian casualties. President Trump responded by calling Putin “crazy.” Following that, NATO announced on Monday that Ukraine is now authorized to strike targets beyond its prior range limits, allowing for potential attacks deep inside Russia. The Kursk Bridge, which handles one-third of Russia’s wheat traffic, has been a target before. If Ukraine successfully destroys it, Russia would likely retaliate by striking the Port of Odessa. Such an escalation would severely disrupt grain logistics, requiring rerouting by truck and rail, and would significantly reduce export capacity. Wheat prices would likely spike, potentially resembling the rally from over three years ago when index funds were heavily short and were caught off guard by a $5.00 surge. While this scenario is not guaranteed, it should raise an alarm for index funds holding large short positions, especially given the recent geopolitical developments and lack of any Black Sea truce.

We will pause our hedge recommendations for corn and wheat sales this morning.

A progressive weather pattern continues, bringing rain across the northern and central Plains and pushing eastward through Friday. A near to above normal rain forecast extends for the northern Plains and Western Midwest beyond June 7, with moisture reaching the Eastern Midwest from June 9 through 12. A high-pressure blocking ridge remains absent from the outlook. Meanwhile, better rain chances are forecast to begin after June 1 in drought-affected areas of China’s wheat region. Stabilizing rains should develop late in the wheat stage, just as the Chinese harvest begins in late June.

Friday afternoon’s Cattle on Feed report was considered mostly neutral. On-feed numbers were in line with expectations at 98.5%. Placements came in at 97.4% versus the estimate of 96.8%, while marketings slightly exceeded expectations at 97.5% compared to 96.7%. Last week’s negotiated fed cattle market opened Wednesday with higher trade in the North and steady sales in the South. Later in the week, reports indicated Southern cash trade occurred in the $222 to $224 range, while the North was mostly quoted at $229 to $231, with dressed sales between $360 and $370.

This week, consumer demand will be closely watched, especially restocking behavior following the Memorial Day weekend. Father’s Day represents the final strong push for high-end beef cuts before summer demand shifts to more casual grilling staples like burgers, brisket, bratz, and chicken thighs. Discounts to the cash trade remain visible on the board, anticipating the typical seasonal slump in summer cash prices.