First Thing Today: Wet Weather Leading to Some Winter Wheat Crop Quality Concerns

Soybeans face heavy pressure overnight... Corn and soybean futures dropped below their 40-day moving averages overnight, triggering a wave of technical selling. Soybeans are down 14 to 18 cents, with corn futures 5 to 6 cents lower. SRW and HRW wheat futures are 3 to 4 cents lower, while spring wheat is narrowly mixed. The U.S. dollar index is down slightly again today, but crude oil futures are also under sharp pressure.

Export sales report expected to show the U.S. still shipping quite a few beans... USDA will release its weekly update on export sales activity at 7:30 a.m. CT today. Traders expect the report to show corn sales ranging from 550,000 MT to 1.0 MMT, soybean sales between 200,000 MT and 600,000 MT, wheat sales of 200,000 MT to 600,000 MT, soymeal sales between 50,000 MT and 250,000 MT and soyoil sales falling between 0 and 32,000 MT.

Wet weather leading to some quality concerns with winter wheat... Active weather continues across the nation's midsection, with thunderstorms, heavy rain, hail and high winds a possibility for HRW wheat country today. Traders are increasingly concerned that soggy weather is compromising the quality of the crop. The National Weather Service has issued a flash flood watch for a pocket stretching from southeast Nebraska to north-central Kansas. A frost advisory is in effect for much of North Dakota, and winter weather advisories and winter storm warnings are in effect for Colorado. Looking ahead, NWS calls for dry weather in the western Corn Belt May 23-27, with wet weather likely from eastern Illinois eastward and across the Southern Plains and Delta. Cold conditions are expected for the Midwest and Plains.

Mueller to head investigation on Russia's efforts to influence U.S. elections... The U.S. Justice Department named ex-FBI Director Robert Mueller as special counsel to oversee the investigation of both Russia's efforts to influence the 2016 U.S. election as well as any possible collusion by President Donald Trump's campaign associates. The president said in a brief statement that he is looking forward "to this matter concluding quickly."

Firm expects rebound in EU wheat production and exports... The European Union will likely produce a 142.7 MMT soft wheat crop in 2017-18, estimates Strategie Grains. This is down 1.1 MMT from the firm's April estimate, as the firm says dry and cold weather for some areas likely caused some crop damage. But production is still expected to be up 6.9 MMT from 2016-17. Strategie Grains expects the EU to export 26 MMT of wheat in 2017-18, which would be a cut of 200,000 MT from its April forecast but a 2.6-MMT climb from expected 2016-17 shipments.

Slight boost in German wheat production anticipated, so long as rains fall... Germany will likely produce a 24.98 MMT wheat crop in 2017, up 1.6% from year-ago, forecasts an association of farm cooperatives there. The association notes that planting season got off to a dry start and cold weather and frosts curbed grain growth. It continues to explain that while recent rains helped, conditions are still too dry, adding that crop ratings will depend on the country "receiving sufficient rain in the coming weeks."

Brazil's Temer accused of bribing ex-lawmaker... The chairman of meatpacker JBS SA, Joesley Batista, reportedly recorded a conversation with Brazilian President Michel Temer in which Temer talked about hush money paid to former House Speaker Eduardo Cunha, according to the newspaper O Globo. Cunha led the impeachment effort against former President Dilma Rousseff that left Temer in charge. But Cunha was later sentenced to a 15-year jail term for corruption. Temer has denied the report and said his March conversation with Batista did not compromise his conduct as president. O Globo has not released any tapes.

Cash cattle trade begins at prices well above where futures are trading... Cash cattle trade got underway yesterday across most Plains states at prices mostly falling between $134 and $136. Trade was fairly active in Iowa, Nebraska and Kansas. While this is down from last week's mostly $138 trade across the Plains, it is well above where futures are trading, which could lead to more aggressive short-covering today.

Optimism packers are readying for pork features... Movement was strong for the second day in a row on Monday and the pork cutout value has climbed $4.39 so far this week. The recent uptick in pork price and movement comes as beef prices are showing signs of topping. Traders are hopeful this signals retailers plan to feature pork after Memorial Day.

Overnight demand news... Japan purchased 79,572 MT of food-quality wheat from the U.S. as well as 35,919 MT from Canada in its regular tender. Saudi Arabia issued an international tender to buy 1.5 MMT of feed barley. Egypt purchased 115,000 MT of HRW wheat from the U.S. as well as 60,000 MT from Russia, 60,000 MT from Ukraine and 60,000 MT from Romania.

Today's reports:

• 7:30 a.m., Weekly Export Sales -- FAS
• 7:30 a.m., Drought Monitor -- USDA/NWS
• 7:30 a.m., Extended Weather Outlook -- NWS
• 2:00 p.m., Farm Labor -- NASS