KC wheat again challenges the annual highs overnight for the fifth time.

April 23, 2026

Grain markets firmed in overnight action, with wheat setting the pace and pulling corn and soybeans along with it. Wheat continues to draw the strongest underlying support. While Russia has increased its production outlook, that improvement is being offset elsewhere. Australia remains a key concern, with drought stress affecting about a third of its wheat area, and Argentina’s crop prospects have also slipped. In the U.S., forecasts do call for rain across the Plains, but expected totals look too limited to make much of a dent in drought conditions.

There is also fresh demand-side support in wheat from China, where auction activity continues to show solid buying interest. That comes as China deals with reduced supplies from last season after weather damage cut production below earlier expectations, and early conditions for the new crop are not off to a favorable start either.

Tension around the Strait of Hormuz remains front and center, and the situation is not likely to be resolved anytime soon. Pakistan is floating the idea of talks to reopen the passage, but we have seen this playbook before: headlines hit, markets react, and very little actually changes on the ground.

What is more important at this point is the backlog that has been building. We are now approaching two months of disrupted flow for both fertilizer and energy. Even if traffic resumes soon, it will not be a quick fix. There is a long line of shipments waiting to move out, and just as importantly, ships will need time to get back in position to reload. That kind of delay does not just disappear; it lingers.

That has real consequences for agriculture. Fertilizer availability is already tight in some regions, and higher energy costs only add to the strain. It raises serious questions about how much production can actually be achieved, especially for wheat. Last year’s struggles could easily recur, and as we move forward, global stockpiles may not rebuild as the market had hoped. In fact, the risk is that they continue to shrink.

At the same time, the weather is adding another layer of uncertainty. Brazil’s safrinha corn crop is moving into a stretch where moisture matters most, and conditions are already leaning dry. If that pattern holds, it could chip away at yield potential, giving the market another reason to remain supported.

Live cattle futures look to open lower this morning as news broke that the Cargill slaughter plant in Fort Morgan apparently went on strike yesterday afternoon. There is an “A” shift today, and most likely the “B” shift that is affected. Apparently, there is no union contract in place that does not require notice, like the JBS straight went through.

The cash feeder index continues to erode, which is not seasonal, with the index off $0.93 yesterday at $373.44. Meanwhile, the negotiated fed cattle trade did see small volumes traded with some sales at $246 were off $2 from last week, while dressed sales in Nebraska were quoted at $386, off $2 for the week.

Yesterday was an important low for June live cattle at 241.50. If the market slices through this, then we have to go back to the continuation breakout support at 238.00-239.00 for a significant price support. August feeders bounce off the 40-day MA at 356.50, with failure to hold that opening up a break to trendline support at 354-355. Today will reveal where major support lies in light of the big discounts in the cash market. Since last week’s power move to its recovery highs, live cattle declined 5 days in a row, with feeder cattle six days in a row. This clearly indicates an exodus from index funds and a reduction in risk in this investment category.

Last fall’s highs are high watermarks for live cattle near 250, and feeder cattle at 373-383, and they are proving to be the top side of this aging cattle bull market. This does not mean those valuations can’t be bumped; it suggests there won’t be runaways if those highs are bumped, as we have seen over the past two years.

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