Upside momentum accelerated overnight.

Another round of contract highs across the board overnight, as momentum fueled buying pressed the market into the early morning hours before a lite retreat into the close. This kind of action is creating a flaring run to the upside that could cause a short-term burnout spike high. However, setbacks will find willing buyers, as the grain trade finds it hard to maintain progressive runs to the upside without constantly checking the strength.

EU sources are confirming that China was active in seeking at least 500,000 MTs of new crop French wheat for export between July and September. China's French wheat purchase comes on top of rumors that China was seeking 1-3 MMTs of US new crop corn for October-November. China's return in seeking French wheat and US new crop corn adds confirmation that China will likely export most of their summer US corn purchases. Yesterday, there was considerable activity in the world freight market for July-August tonnage from the US Gulf and PNW to China. US export sources indicate that China is still asking for US CIF new crop corn and soybean offers this morning.

In a new report issued by USDA'S FAS, the Beijing ag attaché estimated that China would import 28 MMTs of corn from all sources, up 4 MMTs from WASDE. There are expectations that 2020/21 Chinese corn imports could be as high as 34-36 MMTs based on sales and shipment data from Ukraine and the US.

The Rosario Grain Exchange raised their estimate of the 2021 Argentine corn crop to 50 MMTs (from 48.5 MMTs) based on expanded planted area and better than expected yields in Cordoba. The exchange left their soybean crop estimate at 45 MMTs on stable yields.

A dry weather pattern holds across Central and Southern Brazil for another 2 weeks. There are clear signs that the monsoonal flow is ending across N Brazil. This means that the Brazilian winter corn crop will have to rely on subsoil moisture for their reproduction and fill development phases. Unfortunately, soil moisture has been depleted by 6 weeks of below normal rainfall with yield potential in fast retreat.

The US forecast overnight has diminished the rain chances for the Northern US Plains and the NW Midwest next week with shower chances shifted eastward and south. The rest of the Midwest is expected to see rains of .25-1.50″ with heavy totals of 2-4.00″ through the Gulf States. Temps warm following the weekend with highs in the 50's/60's/70's.

Cattle futures found a new round of setback lows yesterday as the prospect of a futures recovery came to an end shortly after Wednesday's open, and June cattle closed under the 100-day moving average. Feeder cattle were burnt on both ends, with deferred cattle falling as the corn market rallied. The Cattle on Feed Report is Friday after the close, with well-known large placements anticipated due to the Covid shortage last year. Cash trade for Wednesday was steady for the week. Cattle Texas and Kansas moved at $120 and sales in Nebraska were quoted at $123-124. Cattle slaughter at midweek totaled 360,000 head, up 17,000 from last week and 2,000 more than a year ago. Despite the better production, choice beef boxes rose $2.20 to $280.46 while select beef was up $1.41. The Covid rally was getting underway a year ago, and the cutout traded a weekly high of $293. Wednesday's quote was still $20 over the 2015 high.