Post crop report selling returns overnight.
Grain futures start started overnight mixed to firmer, and turned week throughout the evening. Since the first of the year, there have been 11 USDA crop reports, which 9 of them finding immediate selling the day after the report. Friday's crop report will be the 12th, with today making it 10 out of 12. Friday's lows, for now, are looked at as values to be retraced. Today, tropical storm Nicholas is taking aim on the Texas Coastline with heavy rain and gusty winds to 60 MPH. Nicholas's rainfall across the Louisiana Coastline of 2-4.00″ could cause delays in electrical service restoration.
India has cut its base import taxes on vegoils, including palm, soy, and sunflower oil to quell rising domestic prices. The base import tax on palmoil was cut to just 2.5% from 10%, while the tax on soyoil/sunoil was cut from 7.5% to 2.5%. India is the world's largest vegoil importer. India saw no need to cut the rape/canola oil import tax, with prices doubling over the past year. The Indian vegoil tax cut is expected to raise consumption and imports ahead of key coming festivals.
Saudi Arabia secured 382,000 MTs of world wheat for November at a $355.68/MT premium price. The price was above trade expectations. Russian fob export values continue to rise with the price set at $305-307/MT amid the increase in the export tax to $52.50/MT. It is expected that the Russian export tax will rise to $70/MT plus in October as world wheat prices continue to rise and score higher highs. US values are in retreat, removing premiums to be competitive in the world market.
There is no indication that the rainy season is prepared to start across North and Central Brazil over the next two weeks. The hot/dry weather will prevent early soybean seeding, which will become a market worry in October.
Tropical Storm Nicholas is strengthening in the Gulf of Mexico and could reach weak hurricane status before making landfall across SE Texas late today. Wind gusts could reach 60 MPH with heavy rains of 4-8.00″ forecast for the Texas Coastline and 2-4.00″ for Louisiana. The remains of Nicholas will pass NE into Mississippi, Alabama and Georgia through Wednesday with rains of 1-3.50″. The remainder of the Central US will hold in a warm/dry trend with summerlike high temperatures in the upper 70's to the mid-90's. The heat/dryness will push crop maturity. The attached 10-day rain graphic is from the GFS model. A Ridge of high pressure elongates and progresses east across the Central US, producing much above normal temperatures with highs in the 80's to the mid 90's. A few lite showers of .1-.6″ will fall across the Lake States late Tuesday, with generally dry/hot weather holding across the Plains and the W Midwest. The heat/dryness is accelerating crop dry down with the Midwest harvest to start in earnest later this week.
The current cattle decline has continued for 12 days. Last week's cash cattle trade was near steady in the South, with Texas trade reported at $123-124 and Kansas at $123. Cattle in Nebraska moved at $124-125 live (steady to $2 lower) and $198 on a dressed basis (-$2). Live trade in the Western Midwest was from $124-127 versus the previous week's average of $126. The outlook is steady to $1 lower this week. Boxed beef values continued to fall through the week. The choice cutout value was down $9.20 on the week to $327.22. The choice rib value reached a new record high of $612, but a collapse in the loin value pulled the whole carcass value lower. The CoT report showed that funds liquidated 16,000 contracts last week (25,000 in 2 weeks). The market is oversold, with key support at the 200-day moving average near $127.