India's wheat crop reported smaller.

Grain futures moved sharply lower overnight on a significant decline in crude oil pricing along with Malaysian palm oil. This pressed bean oil sharply lower along with canola, pushing soybeans to double-digit losses while corn drifted in sympathy with the lower gasoline prices. Wheat futures bounced from extreme oversold conditions from yesterday and showed moderate gains this morning after a large morning short-covering rally.

Part of yesterday’s extreme wheat weakness was tied to the Russians and Turkey, which keep telling the world there working to solve the food crisis with a Ukrainian export corridor. This will be difficult to achieve as Russia still demands that the West must remove its economic sanctions for this to occur. At the same time, the Ukrainians do not trust Russia with their implementation, as they fear it just opens a front for Russia to attack from the south. It makes good media fodder and helps fuel the price downtrend for wheat into the harvest for end-users.

Another story this morning that helped pop the wheat market sharply is that the Hindustan Times reported that extreme heat pushed the 2022 Indian wheat yield to a 20-year low, with collective losses nearing or surpassing 20%. This would put the week crop harvest below 90 MMTs and mandate that India become a significant wheat importer later this year. Some private estimates have the Indian wheat crop as low as 86 MMTs. Yet story surface of potential Indian wheat exports.

Russia’s wheat crop continues to be reported to be bigger than last year, but its ability to export is still hampered. The USDA has Russia peg for 40 MMTs of exports, with logistics likely limiting them to either side of 30 MMTs for the crop year of 2022/23. It’s difficult for Russian exporters to get charters to come into the Black Sea with insurance. Also, the strong ruble limits some trade.

Central US weather had Tuesday hot and dry across the Midwest, Delta, and central plains. Storms pushed across Kansas and northern Missouri while stopping short of the Illinois border. Rain totals were just under 1 inch with locally heavier amounts. Extreme heat prevailed for the fourth day in a row, with readings in the 90s to low 100s. Midwest areas that have not seen moisture in the past two weeks are seeing crop stress and rolling corn leaves.

An amplified high-pressure Ridge holds across Midwest another two days before being compressed South to the Delta/S Plains, where extreme heat will be felt with highs ranging to near 100. The high-pressure Ridge retrogrades westward to the Intermountain West early next week, which allows for the cooler temperatures across the upper Midwest, which was the forecast that crushed grain markets yesterday but still has limited rainfall. Soil moisture will be on the decline for the next 14 days, which raises the yield risk heading into corn pollination. The high-pressure Ridge returns to the Midwest after July 4.

Live cattle market is called mixed to lower with sharply lower outside markets will feeder cattle may open firm with the weaker corn market. The cash market will be the likely dryer this week with the expectation that cash trade will likely be steady due to contracting Packer margins. Hot weather and a drop in carcass weights are being argued for the reason that packers may be forced to pay up and take tighter margins. Yesterday choice values were up 1.06 while select was .31 higher. The load count was moderate at 143 loads. The June COF report is this Friday; expectations have marketing’s at 104.1%, placements at 100%, and June 1 feedlot inventory at 101%.