4-25-14 â€“ As commodity and equity markets head into the weekend, itâ€™s not at all clear how the Ukraine/Russia crisis will affect commodity or equity markets. What is clear is that the standoff is escalating, and that things will change daily.\r\n\r\n And markets donâ€™t like uncertainty. \r\n\r\n Since Ukraine declared an end to the â€œEaster Truceâ€ earlier this week, forces have killed up to five pro-Russia separatists, and a Ukraine helicopter was downed by a sniper. Everyone is blaming the other for not adhering to a de-escalation agreement, and military exercises have begun.\r\n\r\n Plus, in the face of mounting economic sanctions, the Bank of Russia raised its key lending rate to 7.5%, citing higher inflation risks. The move surprised analysts who were expecting no change.\r\n\r\n \r\n\r\nWHEAT MARKETS FIRMER\r\n\r\n \r\n\r\n CBOT wheat markets have been the bellweather for reaction to the Ukraine crisis, and all contracts are firmer in overnight trading. Prices likely would be up more if the conflict had affected grain export supplies. \r\n\r\n So far, things are running pretty smoothly, and traders are able to concentrate more on US Plains weather. Rain has fallen over some of the area this week but has missed large portions of the most parched areas.\r\n\r\n The weekly National Oceanic and Atmospheric Administration Drought Monitor Thursday showed exceptional drought centered on the Texas Panhandle. <a href=\”http://droughtmonitor.unl.edu/data/pngs/20140422/20140422_usdm_home.png\”>Your text to link…</a>\r\n\r\n Traders appear to have little hope that weekend storms forecast for the eastern Plains and Midwest will do much to relieve the drought.\r\n\r\n Corn also is up overnight as market uncertainty overcomes forecasts for warming temperatures after weekend storms drench most of the Corn and Soybean belt.\r\n\r\n \r\n\r\nFEEDLOT SUPPLIES SEEN HIGHER\r\n\r\n \r\n\r\n The USDA is to release its April Cattle-On-Feed report after the market closes today, and analysts are expecting slightly larger numbers going on feed in March than a year ago. The end result could be the first time in 20 months that cattle on feed have exceeded a year ago.\r\n\r\n Many analysts cited record-high prices for slaughter-ready cattle for the expected increase in placements, but there were cases where cattle were moved off of dry wheat pastures early so the crop would not be damaged. Some were moved to grass as pastures greened up for spring, but many likely found their way to feedlots.\r\n\r\n American Restaurant Association data show that the average change in placements into feedlots has been up 7% from November through February. And analysts are calling for increased fed cattle availability through much of the summer as a result.\r\n\r\n Cash markets remain quiet with packer bids at $141 to $142 per cwt on a live basis and $232 to $233 dressed against asking prices of $146 live.\r\n\r\n The USDA reported its choice beef cutout value Thursday at $233.80 per cwt, up $1.16, while the select cutout rose $1.40 to $222.07. The choice/select spread narrowed to $11.73, and there were 80 fabricated loads sold into the spot market.\r\n\r\n The CME Feeder Cattle Index for the seven days ended Wednesday was $178.98, up $1.63, while the May futures contract settled Thursday at $179.60, up $0.97. April live cattle settled at $144.25, up $0.32.\r\n\r\n \r\n\r\nIN OUR OPINION\r\n\r\n \r\n\r\n–Ukraine crisis will be bullish for US commodities as investors and commercial buyers swing to the USâ€™ more stable environment.\r\n\r\n–Declining hog numbers and rising pork prices are supporting beef markets despite record-high wholesale and retail levels.\r\n\r\n–Retailers are gearing up for grilling demand in May, but if the weather doesnâ€™t cooperate, the backlash into wholesale markets could be swift.