Wheat futures lead the overnight price rise.

Wheat futures were higher overnight as the 2nd day of the Wheat Quality Tour estimated North Dakota spring wheat yields at 24.6 BPA, down 40% from the five year average and down 42% from the last time the Tour was conducted in 2019. No Spring Wheat Crop Quality Tour was held in 2020 due to Covid-19. The Tour will continue sampling fields today in NE North Dakota, and announce their final crop estimate this afternoon. The Tour has confirmed the worst-case scenario for the US 2021 HRS wheat crop. Further support in wheat came from a Russian State weather forecaster who cut its estimate of the total Russian grain crop by 3 MMTs to 121 MMTs, citing hot/dry weather in the Volga Valley. Harvest wheat yield data argues for a final Russian wheat crop of 75-79 MMTs. This total is considerably lower than the WASDE crop forecast of 85 MMTs, which along with expanding demand from Iran/Pakistan and Turkey, shows there is a developing tightening of world wheat exporter stock/use ratios.

Canada is securing US corn, as they are well aware of the acute change in export opportunities the US will be seeing coming up for 2021-22. Downside price risk in corn is becoming limited with wheat prices rising and increasing demand for corn as wheat is leaving the ration mix in the coming months. As the first of the month is coming, index funds are looking to reapply risk on trades in grains, with the US dollar faltering after the Federal Reserve's meeting concluded on Wednesday, showing their dragging their feet and in no hurry to slow down monthly mortgage-backed security purchases along with giving a timeline of when interest rates may rise. In their Fed speak interview of Chairman Powell, they're more focused on employment than caring about inflation was the bottom line.

The primary weather models are pointing to a dry Central US weather forecast over the next 15 days, with heat returning into the middle of August. A strong high-pressure Ridge that has created the record heat across the Plains and the NW Midwest has slowly weakened and pushed southward. The weakening Ridge allows for a front to pass through the Central US on Friday and the weekend, with seasonal temperatures returning early next week. A band of rain will be produced from E Dakota thru SW Iowa and Missouri on Friday/Saturday. Rain totals are estimated in a range of .25-1.00″. Estimates are that 35-40% of Midwest crops will see rainfall in the next 10 days. Highs will retreat from the oppressive 90's to lower 100's to more seasonal 80's to low 90's. However, the break in temperatures is limited to 3-5 days, with the forecast models rebuilding the Ridge/heat during the 8-12 day period across the Plains and the W Midwest. There is no evidence that the Ridge is going to be leaving the Central US during August.

Cattle futures were mixed yesterday as hog futures had a sharply lower to limit down session on concerns that African Swine Fever was found in the Dominican Republic hog herd. This is the first time the disease was found in the Western Hemisphere. Still, ASF causes no immediate threat for the US pork industry today and hog futures are expected to uncover support on any early weakness. Cash cattle trading yesterday mainly was quiet, but there was talk of isolated trade of $2-3/CWT higher on the firming beef market. Beef saw its 6th consecutive day of gains. The choice-value pushed $3.43 higher to $273.16 while select was $2.18 higher at $256.12. Packers are having trouble expanding kills due to labor shortages which will likely back up cattle later this summer.