Grains price bounce overnight.
Grain futures firmed overnight after the excessive selling they took on Turn-around Tuesday, as the market prepares for Thursday's volatile Stocks data and wheat production report. Stock index futures are also on the rebound as the yield on the US 10-year note fell back to 1.5% overnight after hitting a yield yesterday 1.6%. The US debt limit will take time to resolve, but political infighting the Democratic Party looks to prevent the passing of the debt, infrastructure, and reconciliation bills this week. The Democrats look to pass the resolution today to keep the US government open until December, with Republicans able to block legislation currently that has the US debt limit increase in it. Today's vote will not include the debt, which should bring in Republican support.
Thursday, the NASS will release the 2021 US Small Grains and September Stocks report. The average trade estimate has the 2021 US all wheat at 1.68 Mil Bu due to a 17 million bushel anticipated decline in spring wheat from the August estimate, mainly due to the rise in abandoned spring wheat acres. US final corn stocks are at 1,155 Mil Bu with soybeans at 175 Mil Bu. Both are considerably down from last year. The US corn stocks will be closely watched and how the USDA utilizes feed usage.
Algeria was in overnight after yesterday's wheat setback and secured 500-550,000 MTs of primarily French wheat with the possibility of a cargo of Russian wheat included. Pakistan received offers on 640,000 MTs of world wheat, and it's anticipated Egypt is in the hunt for more supplies as well. Overnight December French milling wheat was higher by $3 a metric ton (9 cent equivalent) after closing $0.50 higher yesterday at 11:40 a.m. our time. French milling wheat did not suffer the decline that US values had seen on Tuesday, and so now premiums in US values are eroding, giving us a firmer tone under the market.
US weather forecasts for the GFS are drier this morning for the Plains and wetter across the Western Midwest. Both the GFS and European models are seasonally warm for the next two weeks. A Ridge of high pressure maintains its position across the Central US, while Gulf moisture pushes northward into a passing short wave and allows showers across the Plains/Western and Central Midwest into early October. This is a favorable setup for needed rains in the Plains, but the models have the heavier totals being farther east than prior runs. Plain's rainfall totals are estimated in a range of .15-1.25 inches, which is less than previous indications. Summerlike warmth and dry weather will maintain a fast harvest pace into the opening weeks of October for the Midwest, with models going back to below normal rain in week 2 of the 14-day forecast.
Cattle trade yesterday was mostly lower for live cattle, while feeder cattle gained on the corn price setback. Beef prices were weaker for Tuesday with the choice value down a dollar 14, while select beef was just $0.03 lower. Cash cattle markets are mostly quiet, which show a list looking for a dollar higher at $125, but there has been limited packer interest. Fed cattle carcass premiums have been pushed to extreme levels in recent weeks. Last week, prime graded carcasses sold for nearly $22 over choice, the largest premium since October 2019. At the same time, select graded cattle sold $30 under choice, nearly matching the record discount that was set in late June. The widening spreads are the direct result of the falling number of prime graded and elevated select carcasses.