Grain prices trade at a new weekly highs overnight.

After a mixed overnight trade, corn and soybeans moved higher, following the sharply higher wheat market as the 4:30 A.M. GFS models showed more pronounced heat and continued dryness in the 6-10 day and 11-15 day models. There will be weekend rainfall across the S and E Midwest, but otherwise, rainfall will have to come short waves that pass over the Ridge and drop southward into the E Midwest. These systems are called “Ridge Riders”. High temps will reach into the mid 90’s to lower 100’s with some Dakota, Montana, W Minnesota crop areas enduring high temps of 103-109 degrees. Such extreme heat will produce acute crop stress. The concerning question is, does this weather pattern lock-in for August, with no tropical storms again in the Gulf or the East Coast to pump moisture into the Midwest? Traders remember the hot/dry weather that started last year following the August crop report and reducing the US soybean/corn yields.

Brazil has been seeking Argentina corn with as much as 500-550,000 MTs of purchases this week and washing out export contracts amid the $45 cost of replacement. And the cost to top off an Argentine corn cargo at the ocean (rivers too low) has risen to $1.05/Bu, which moves Argentine corn prices closer to the US Gulf. World corn demand is preparing to shift to the US as S American values rise.

The forecast models agree and are consistent with prior day runs. The Western US high-pressure Ridge that has spawned its historic drought will be pushed east and north by the monsoonal flow out of Mexico. The mean position of the Ridge shifts to Colorado early next week and elongates to produce extreme heat across the North Central US and the Southern Canadian Prairies. High temps are forecast to reach into the 100’s with some readings topping 110 degrees in the Dakotas, Nebraska and Minnesota. Such heat will place acute stress on NC US and Canadian crops. The mean Central US Ridge position shifts farther south and east in the 11-15 day period. Rain chances have come to an end across the Dakotas, Minnesota, and Iowa for the next ten days. This weekend, a slow-moving front will drop southward to the Gulf, producing showers from Kansas City to Akron Ohio. The Central US shifts into a dry profile next week with extreme heat for the N Plains, Canadian Prairies and NW Midwest. A below-normal rainfall trend is offed during the 11-15 day period with above normal temperatures.

Cash cattle markets continued to be quiet and mostly steady throughout the week while boxed beef continued to search for a low and was down $3.01 on the choice cutout and down $1.27 on select. The Independence Day holiday disrupted the beef export business last week. Exports were the lowest since the 1st week of the year at just 34 Mil Lbs, and weekly sales fell to a 20-week low of 20 Mil Lbs. The export dip tends to be seasonal around the holiday, and business is likely back to normal this week. US beef cumulative exports and the outstanding sales volume are record large. Total commitments are 129% of a year ago at 1,561 Mil Lbs. The July WASDE raised the annual export forecast by 80 Mil Lbs. Based on commitments, the USDA could still be 200-300 Mil Lbs too low on strong Chinese demand. Feeder cattle are at risk of renewed selling if grain prices accelerate next week on the fear of a building drought going deeper into August for the Western cornbelt.