Here comes Turn-around Tuesday.

Grain futures are in Turn-around Tuesday corrective mode, while the macro environment remains bullish for grains. Fundamental factors being monitored include heavy rains in Brazil, drought in southern Russia, delayed harvest in Argentina/stunt disease in corn, and a slower planting pace in the US. Yesterday, CBOT soybeans closed above the 100-bar moving average for the first time since December. Corn is also trading above the 100-bar MA, and Chicago and KC wheat are above the 100 and 200-bar MA’s.

Crop Progress results showed corn planted at 36% vs. 39% expected and 39% on average. Soybeans were planted at 25% vs. 28% expected and 21% on average. Winter wheat conditions are up +1% to 50% G/E, which is well ahead of 29% G/E at this time last year.

The grain trade has Friday’s WASDE report out at 11:00 a.m., but CONAB will release their yield guesses in the morning. Obviously, if they lower crop sizes again, which is very likely, the disparity between their expectation of their own crop and the USDA’s thoughts will start to become laughable. Right now, the average old crop estimates of Friday’s report are ending stocks in corn at 2,100 Mil Bu (down 22 Mil Bu), wheat ending stocks at 696 Mil Bu (unchanged), and soybeans at 339 Mil Bu (unchanged). New crop estimates have corn at 2,285 Mil Bu (up 185 Mil Bu), wheat at 786 Mil Bu (up 90 Mil Bu), and soybeans at 431 Mil Bu (up 90 Mil Bu).

On Friday’s South American yield guesses, traders think WASDE will report the corn crop in Argentina at 52 MMTs, which is off three MMTs, and the soybean crop at 49.6 MMTs, which is also down 400,000 MT. The Brazilian corn crop is pegged at 122.4 MMTs, off 1.6 MMTs, and the Brazilian soybean crop at 152.5 MMTs, which would be off 2.5 MMTs.

Rodnie Polya, a top Russian grain exporting company, had its current marketing year grain export quota cut by 1.2 MMT in an ongoing dispute with Russia’s export agency over phytosanitary issues. Effective immediately, China’s customs office will allow French pig protein feed if it meets regulatory requirements. President Xi and Macron wrapped up meetings yesterday.

Monday’s rally was pure short covering from the managed money trade concerned that the world weather is affecting production and shifting away from some of the burdensome world supplies. The Russian wheat crop is roughly half winter and half spring wheat. A 20% yield loss of Russian wheat would amount to 8-9 MMTs, pulling the Russian total wheat production of the 2024 crop down to 84-86 MMTs. This is a large historical perspective break in carryout stocks. The Russian winter wheat crop has frost possible across the far northern regions over the next few mornings. US HRW wheat harvest is 2-3 weeks away, and it’s difficult to rally once the feasting of new crop grain gets underway. We will look to advance more wheat sales on another push higher.

Dry weather is offered for the Plains and W Midwest next week. The dry weather for the N Plains will allow them to advance corn/spring wheat and soybean seedings strongly. The Central and Eastern Midwest will deal with one storm system today and a secondary system late Wednesday, with a combined rainfall of .4-1.50”. After that, it looks like drier and warmer weather into May 16-17 before more rain potential returns.

It was a mixed day for cattle futures Monday, with June inching higher while the rest of the market was slightly weaker. Feeder cattle futures were down $2.00 at the start of the week, and corn futures rallied with strong gains. The cash feeder Index fell $2.34 to start the week to a 13-week low of $240.05. Negotiated fed cattle markets were also quiet, with a steady outlook. Last week, the Packers bought 92,693 heads on a negotiated basis, with 58,165 for 1-14-day delivery and 34,528 for a 15-30-day delivery. The negotiated volume was better than the previous week and above a year ago. Negotiated carcass-based sales averaged $295 and were above the average formula price of $291 for the second consecutive week. Forward contracts sales were the highest last week at $297.

June live cattle appear trapped with support at 171.00-172.00 while resistance remains significant at 180.00-181.00. If corn prices continue to firm another week or so, deferred live cattle futures have to rally to stop the decline in the feeder cattle market. Seasonal cash highs are being scored.