KC wheat stalls overnight on renewed forecast of rain after May 1st

This morning’s market has Kansas City relaxing from yesterday’s breakout price of a congestive range, bolting through 660 by $0.26 before retreating overnight, as rains continue to propagate the weather models for the dry areas of the HRW wheat belt after May 1. This coming Monday’s HRW wheat crop ratings (which reports are filled out this afternoon) will show another sharp drop in ratings, especially for Kansas, as the freeze damage will have revealed itself due to the heat that occurred directly afterward. Production has been lost, and upcoming rains will only stabilize prospects in northern Kansas, while prospects in eastern Colorado can improve. If these rains scheduled for May 1 and afterward do not materialize in the Sunday night forecasts, a more extended move to the upside at $ 7.00 on Kansas City wheat and higher will be renewed.

Corn is not bursting higher by any means, but support continues to develop as the Brazilian safrinha corn crop needs rain. This corn crop usually sees rain through the end of April, with its warm, dry season kicking in after May 1. If not seen the normal rainfall prospects they would expect over the last several weeks. This will be the next crop watch.

We are heading into another weekend with the Straits of Hormuz closed, and despite the cease-fires that have emerged, it does not appear that fertilizer or fuel will move through this corridor for weeks. Because the waterway has been closed for two months, when it does eventually reopen, it’s going to take well over six months for energy supplies to restock. It has been noted that it will take six months to clear the mines, with very tight corridors being opened to get traffic flowing sooner. Sub $60.00 crude oil may not occur until the end of the year or into the new year of 2027.

Cattle futures created a vacuum-selling bottom on Thursday morning's trade, as concerns over the Fort Morgan, Colorado, plant strike had June cattle challenging their 30-day MA for repeated support, while August feeders dipped to their uptrend line that goes all the way back to the November low. The reversal action into the close is supportive, suggesting the wave of selling that got underway last week may have come to an end. A plant strike in Fort Morgan does not carry the concerns we would typically see years ago, as plants are not running at full capacity and other plants can absorb any missed harvest schedules, albeit at the expense of added trucking.

Yesterday’s cash feeder index tumbled another $3.44 and is now at $370. Meanwhile, the negotiated fed cattle trade that did occur yesterday in light volume was off $2 on the week at $246. Dressed sales in the north are at $386. Yesterday, boxed beef trimmed some of its strong gains from early in the week, with choice off $0.69 and select giving up $0.75. It’s well-known how heavy Fed carcass weights have become, and now the record heavy range is in the 980-990 pounds. We have not yet seen a seasonal decline, but the weekly data show we are running at 982 pounds, which is 36 pounds over last year and 68 pounds above the five-year average.