Egypt pays record value for wheat.

Grain prices are in strong recovery mode today, led by the wheat market, as Egypt’s purchase of wheat yesterday was at a record price of $480/MT CIF for 465,000 MTs of wheat. The wheat purchase was of Romanian, Bulgarian and Russian sourced wheat. The Russian wheat came with the freight cost of $50/MT on a hike and insurance premiums, but it was from Russian grain exporters with their own fleet. With GACS accepting the price for wheat at record values, they are obviously pessimistic that there will be no resolution for a Ukraine grain export corridor to be allowed.

Yesterday’s heavy massive liquidation with a throw the baby out with the bathwater type mentality could have likely scored a first of the month low after wheat prices had been liquidating from the beginning of May. As pessimism abates in the marketplace and the reality that Ukraine will not be exporting any grain other than truck and rail through the west, a price recovery will be in the works. The recent collapse in Chicago wheat values of $2.50/bu into yesterday’s lows have now allowed US prices with freight to play into the mix for wheat exports. If prices remain where they are at, further tightening domestic carryouts will be at play.

India’s harvest is not going as well as hoped for, with harvest procurement only at 18.65 MMTs of wheat which is down 54% from last year and a 13-year low. The low wheat government procurement implies that India will continue to block wheat exports and will likely become an importer later this crop year due to shortages that a wheat crop of 92-96 MMTs could produce. India still reports their yield at 105 MMTs and will be lowering that data.

US Central weather forecasts are favorable, but South Dakota and Missouri will see too much rain. No extreme heat is in the forecast, given the tropical storm in the Gulf of Mexico has an 80% chance of forming the season’s first tropical storm. Dryness looks to prevail across the Central US for another two days before a series of storm systems cross the Central US producing near to above normal rainfall. The Central Plains and Missouri River Valley will have the heaviest rains. High temps are in the 70s/80s. The extended range forms a strong Ridge of high pressure over the western US and allows the Ridge to progress eastward. The pattern shows no stagnation due to a strong jet stream aloft.

Cattle futures had strong recovery gains yesterday on short-covering and value buying, along with feeder cattle finding extreme support on the massive corn market weakness. Tuesday’s break was overdone on pricing and just more related to the weakness in the outside markets and not a change in cattle fundamentals. Box beef values had choice declining $0.12 while select was higher by $0.26. The load count was moderate at 146 loads. August feeder cattle yesterday carried a hefty recovery premium to the cash index with the feeder Index that hundred 53.36 as of Wednesday.