Wheat trade softens as harvest is fully underway.

Grain prices are mixed this morning, with wheat further eroding on the start of wheat harvest in the South and continuing eroding energy prices. Crude oil is down $1.18 this morning at 73.05, with a low of 72.48, which is an albatross to the biofuel factor of grains.
Yesterday’s crop progress report showed 91% of the corn planted and soybean seeding at 78%. The initial corn crop rating was 75% good/excellent, which is the best in years. The soybean initial crop condition rating will be released next Monday and is expected to be high. Wheat harvest is already 33% completed in Texas and 22% for Oklahoma. Southern Kansas should start by mid-June.

It’s reported that Egypt is tendering wheat for July delivery. The lowest FOB offer on 60,000 MTs from Ukraine was $271.75 from LDC. The next lowest offer was $282/MT from ADM for Romanian wheat, with Russian wheat offered at $285-289/MT FOB, depending on the terms. There were 24 exporters offering wheat to Egypt, with origins varying from Ukraine, Russia, Romania, French, and Bulgaria. Any purchase decision will be announced later today, with world wheat futures seeing the 24 offers a slightly bearish on availability.

India is anticipated to be lowering their wheat import duties by 40% in the coming weeks. They announced a modest increase in the 2024 wheat crop estimate of 112.9 MMTs versus 112 last month. India looks to consume 112 MMTs of wheat in the 2020/25 crop year which is what’s prompting the need for imports.

The world weather forecasts are threatening to garner support and are creating what has been seen as short-covering rallies to US prices. Extreme heat and dryness look to continue across the Russian winter wheat areas, while Russian spring wheat struggled to seed amid excessive rainfall in saturated soils. Ukraine’s drought is also broadening and impacting their corn and some flowers. Meanwhile, Mexico, China, and Argentina are enduring widening dryness. The EU weather is too wet and cloudy, which has farmers worried about a repeat of 2016 when small grain yields fell sharply. US grain values did not live in a vacuum, and due to world prices, this can prompt rallies, as our export potential is growing for wheat and corn.

Another 48 hours of rain across most of Central US looks to occur before a drier pattern follows with variable temperatures. A high-pressure Ridge across Mexico noses northward into the Great Basin and southern Plains after June 12. This Ridge will produce heat in the South-Central US with rain chances across the N Midwest from Ridge riding storm systems. The models are currently unable to forecast the timing and amounts from these ridge-riding storms, and significant forecast adjustments will occur.

Cattle futures were firm on Monday, while feeder cattle closed mixed. This was after heavy early session selling that gave way to a dramatic recovery after August live cattle found support just under the 100-day MA. August feeders found support just under the 50-day MA but, more importantly, the uptrend line created by the April and May price lows.

Cash markets are their typical quiet start of the week and are expected to hold off until Thursday or Friday. Last week, the Packers bought 73,431 head on a negotiated basis. 53,578 head for 1-14 day delivery and 19,853 head for 15-30 day delivery. Its negotiated trade last week was lower, with the average dressed price down $3 at $301. All other cell types or higher for the week. The top prices for negotiated grid sales rose $5 to $307 and were the second highest on record. Formula sales were $4 higher at $299 and negotiated good sales were $1 higher at $299. Box beef prices did jump $2.40 on choice and $1.99 on select. The Choice cutout at $315.60 was the highest since last December.