Mixed overnight trade on thin volume.

Grain futures produced a mixed overnight trade on thin volume, as StoneX yields produce a lower than anticipated guess. StoneX estimated 2021/22 US corn yield at 176.9 BPA and 50.0 BPA for beans. A host of other private crop estimates will be offered in the coming trading sessions, with the message being that the 2021 US corn/soybean crop yields will not reach the 2021 trend but that they won't be too far below either. In retrospect, US corn/soybean crops were in much better shape last year, but the dry finish from mid-August into September dropped the US corn yield 9 BPA and soybeans 3 BPA from the initial August NASS forecast.

France is reporting a smaller wheat crop with quality concerns on the rise. The French trimmed their wheat crop to 36.7 MMTs from 37.1 MMTs and mentioned that excessive moisture is causing quality issues. In addition, French Co-ops complain of low test weight/low protein SRW wheat. Algeria secured 200-300,000 MTs of French wheat overnight, a sale that will measure French wheat quality.

World wheat, corn, and vegoil values are rising while the US Chicago futures decline. The world market reflects its tightening supplies that will produce US demand. End users are poorly covered, and the most significant short in the market is China and its poor US new crop soybean coverage. Following the August Crop Report, end users will have no choice but to book US corn/soybeans and soy products as other suppliers will have exhausted their supplies.

The forecast is warmer/drier for the next 10 days than the prior day model runs. Both the EU and GFS models have reduced 10-day rainfall totals. An arid/warm weather pattern holds across the Central US into August 15th. Any meaningful rain that falls will be located over Minnesota, Wisconsin, N Iowa and the northern 1/3 of Illinois. Elsewhere weather will be dry. US crop conditions will decline amid the lack of moisture and the coming warmth that pushes maturity. Lite showers are possible each day across the Lake States into the weekend. Accumulations reach .25-1.00″. A high-pressure Ridge then rebuilds with high temps ranging from the mid 80's to the lower 100's on the weekend and for most of next week. The heat lasts into mid-August. The Plains and E Midwest will be particularly dry next week.

Yesterday's cash cattle trade was light in the Western Midwest at $125 on Tuesday or steady with last week, while the Plains markets were quiet on limited demand. However, the beef market saw strong gains. On Tuesday, the choice cutout was nearly $5 higher, and the select value gained just over $4.

Last week, the July Agriculture Price Report showed the national average corn price in June averaged $6/Bu, or the highest since October 2013. At the same time, the national all hay prices reached a 24-month high of $179/ton, and alfalfa hay rose to $199/ton. On a per ton basis, corn was $214 and above hay prices for the 2nd consecutive month, which hasn't happened since the summer of 2013. Hay prices have since gained, especially in the N Plains, where pasture conditions are poor. This continues to drive elevated beef cow slaughter rates.