New Russian crop revelations mark a corn and wheat rebound.
Grain futures pushed lower overnight initially, with another middle of the night reversal for wheat pricing. At 3:00 in the morning, the Russian government created comments that implied a more restrictive grain export policy could be in the works. Russian sources have the 2021 corn crop under acute drought stress amid recent extreme heat. Some see the 2021 Russian corn crop as small as 11-12 MMTs due to weeks of acute dryness. Corn futures also firmed on Central weather forecasts looking to be drier than initially forecasted. Soybeans continue to sag on the weakness in Southeast Asian palm oil futures and the residual selling applied to soybean oil.
The Pro Farmer Crop Tour found record corn yield potential in Indiana, while the Nebraska corn yield fell below the NASS forecast. The PF Tour estimated the Indiana corn yield at 193.5 BPA, up 13.5 BPA from last year and up 19 BPA from the 3-year average. The Nebraska corn yield was pegged at 182.3 BPA, up 7 BPA from last year and the 3-year average. Tour participants noted that Nebraska corn was going backwards due to recent hot/dry weather. They speculated that the same corn yield stress is being felt across Kansas.
The PF Tour estimated Indiana soybean pod counts in a 3 X 3’ square at 1,239 pods, below last year’s 1,281 pods, but above the 3-year average at 1,172 pods. Nebraska soybean pod counts were estimated at 1,226 pods, below last year’s 1,297 pods and the 3-year average of 1,269 pods. So far, the interesting fact of the tour is that E Midwest soybean pod counts are not living up to expectations. The western leg of the PF Tour will estimate Iowa and the eastern leg Illinois today, with the tour concluding in Minnesota on Thursday.
China reported that it imported 2.86 MMTs of corn in July, a record. For the international corn crop year that ends on October 1st, it is expected that China will import 28-29 MMTs of world corn, a record and far above prior years. China also imported 880,000 MTs of world wheat and 1.11 MMTS of sorghum.
The EU/GFS models reduced rainfall totals for the Central Plans and the Central Midwest overnight. Showers from across the N Plains and the N Minnesota late Thursday/Friday with a system pulling slowly north and east. The best rain is forecast to drop across the Central Canadian Prairies where totals will range from 1-3.00″. The Eastern Dakotas and Western Minnesota will enjoy rains of .5-1.50″ while the remainder of the Midwest struggles with rains of .2-1.00″. The remains of Fred are trudging north and look to produce rains of 1-3.00″ across the NE US. High temps range from the mid 80’s to the mid 90’s across the N & C Plains and into the N Midwest into the weekend before a cooling trend develops. N Plains/W Midwest high temps decline to the 70’s to the lower 80’s while the remainder of the Midwest and the Central Plains hold in the 80’s.
Cash cattle trading on Tuesday picked up a bit, with light sales reported in the Western Midwest. Small numbers sold for $127 or $1-2 better for the week. The beef rally continued through Tuesday. The choice-value jumped $8.26, and select was $3.22 higher. The choice/select spread remains historically high at a $31.29/cwt choice premium. Despite historically strong cow slaughter rates, cull cow prices have reached multi-year highs. Last week, cutters brought nearly $145 on a dressed basis, the highest weekly price since August 2017. But while flat prices are high, the spread between fed steers and cull cows has been historically wide through the summer due to enlarged cow kills. The cull cow price last week was $56 under fed steers, compared to an average of $40.