Grain futures are starting to see a crack in trendline ability.

Grain futures did open higher last night on the declining crop ratings, and despite night selling back to unchanged levels, found re-newed buying in the morning hours. The realization that ratings will be down again next Monday due to the stress inflicted this week and lack of replenishing rains towards the weekend in the Western cornbelt has the market bid with support. Also, rumors are rising that China booked US corn for December-January-February and the recent break. Rumors are tonnage is in the 1-1.5 MMT range. Apparently, China took advantage of their harsh negotiating tactics from Sunday that created weakness in the grains and took advantage of that by purchasing futures and cash. Rumors are also circulating that they were buying soybeans for January-March domestic soymeal trade as a hedge.

End-users are taking a heightened notice of upcoming weather that will make trend line production challenging, with corn futures trading above 5.50 and soybean meal also finding renewed interest supporting soybeans. This makes breaks finding willing buyers in waiting support corn and soybeans until more is known about yield potential. The La Nina is fast developing and late seasonal US dryness is starting to become a concern.

Egypt's GASC is tendering for world wheat and is expected to purchase Eastern European/Ukrainian wheat based on competitive pricing. The lowest offer was for Ukraine wheat at $244.50/MT.

A ridge-riding storm produced heavy rain across the northern half of Wisconsin overnight with showers ongoing. This same area witnessed needed rain on the weekend. The remainder of the Midwest/N Plains and Canadian Prairies were dry overnight with extreme heat reported in the Dakotas of 95-103 degrees. The 10 day forecast offers one chance of rain for S and W Iowa on the weekend with limited rainfall for the N Plains, Minnesota, the northern half of Iowa and Nebraska.

A strong high-pressure Ridge positioned over Colorado/Nebraska will weaken and retrograde south and west into the middle of next week. This allows for a front to pass through the Central US on Friday and the weekend with more seasonal temperatures. Highs will retreat from the oppressive 90's to lower 100's to the upper 70's to the upper 80's. The cooler temps and southward push of the Ridge will allow for Ridge riding rains on the weekend across S Dakota, S and W Iowa and potentially Eastern Nebraska. Rain totals are estimated in a range of .25-1.00″ with locally heavier amounts. The rain will aid only 35-40% of Midwest crops with other areas staying dry. The extended range 10-15 day forecasts return the heat to the Plains and the Western Midwest after August 5th. The warming temperatures offer no return of normal rainfall and the first half of August looks to produce below normal rainfall. The Canadian Prairie drought will deepen/worsen into August 10th.

Cattle futures enjoyed a strong follow-through rally on Monday from Friday's friendly COF and Cattle Inventory report. Triple-digit gains push nearby futures back to previous highs, with 2022 live cattle making new contract highs. Feeder cattle will find difficulty in rallying today with the recovering feed grain pricing unless winter cattle futures can again press higher to offset feed costs. Yesterday's cash markets were quiet to start the week, but the early outlook is firm as the beef market bottoms. Cattle feeders will be looking to sell $1-2 higher this week. The boxed beef market saw the 4th consecutive day higher on Monday. The choice value rose $1.30 and select gained $.98.

National pasture condition ratings worsened last week, with Poor/Very Poor conditions rising to 42% or the worst for late July since 2006. North Dakota jumped 11% to 85%, while Montana rose 3% to 91% P/VP. Both were new highs for the year. SD improved 6% to 72% P/VP. Other states above 70% include Arizona (82%), Oregon (80%), and Washington (97%). Calf sales will be coming earlier this fall along with cattle culling, but an improving box beef market looks to be absorbing what would normally create selling pressure in the futures.