A surprise increase in corn ratings created a mixed evening session.
Grain futures had a mixed evening session, with corn futures struggling with the unexpected rise in the crop condition report. At the same time, wheat found support from world valuations that continue to grind higher, with soybeans anticipating more fresh Chinese interest underpinning the market. China is short bought on its future US shipments, and it is estimated that China has a massive 28-32 MMTs of needs for US soybeans to book and the new crop year.
The NASS raised GD/EX corn conditions by 2% to 64% on Monday. The weekly US corn condition gain was entirely due to an 11% rise in IL GD/EX conditions and a 6% gain in Missouri. States in the N Plains and the W Midwest that endured hot/ dry weather saw their ratings hold steady or decline only marginally. This week’s GD/EX corn ratings were 9% less than last year and just above the 5-year average. NASS held its soybean crop rating steady at 60% vs last week. The rise in the US corn ratings pressured corn futures overnight.
Soybean futures rallied on the talk and prospect of Chinese demand for US supply and the ongoing talk that India may allow 1.5 MMTs of GMO meal to be imported. India typically crushes/utilizes its soybean crop for livestock feed, but rising domestic feed prices and spot shortages have sparked the import rumor.
This upcoming Thursday’s NASS corn and bean yield data will be closely watched, but also in the report will be the size of the Russian wheat, Brazilian corn and Canadian crops that will carry as much importance. The NASS must adjust down US corn harvested acres, as considerable corn silage is being produced across the Dakotas because of the shortage of hay, any failure to adjust what is already corn being cut shows again the USDA is dragging their feet in reflecting real-world availability of grain supplies. Upcoming massive crop demand will reveal the shortness from record crop expectations that cannot be produced compared to paper, similar to last year.
The GFS/EU weather models are in good agreement, which raises confidence in the 10-day forecast. The only real uncertainty rests with several tropical storm systems and their impact on downstream US weather. For now, Florida and the SE US look to be targeted with any tropical storm activity. The forecast features weather conditions that have prevailed for most of the summer, drier/warmer than normal conditions for the Plains and W Midwest with near-normal rain and modestly warmer temperatures for the E Midwest. The best chance of rain is in the next 24-36 hours from E Iowa eastward as afternoon storm systems form in unstable air aloft. A cold front pulls eastward on Wednesday and leaves areas west of the Mississippi dry with warming temperatures. High temps hold in the upper 80’s to the lower 100’s as a high-pressure Ridge builds from west to east.
Yesterday’s cash cattle markets were typical for the start of the week, and they were quiet with the cash outlook steady/firm. However, the boxed beef market was again sharply higher on Monday. The choice cutout was up $3.54, and the select value gained $3.72.