Wheat and soybeans recover from sharp overnight losses.
The grain futures tumbled on Sunday night, opening out of the chute with sharp losses initially, with wheat and soybeans finding a bid that quickly recovered, setting them positive on the session by late evening. Soybeans found initial buying at last week's lows with the upcoming acreage data this Thursday, with many suspecting acreage will be lowered.
Compiled estimates so far have average trade estimates for the 2022 US corn crop at 89.8 Mil acres; this is up 300,000 from March, with soybean seeding placed at 90.6 Mil acres, down 400,000. Spring wheat seedings are forecasted to come in around 10.8 Mil acres, down 400,000 from the March estimate. Estimates only suggest a loss of 200,000 acres of the five primary crops from the March intentions, with surprises that could potentially be found that at least 2 million acres of lost plantings could be dispersed amongst the various commodities.
This afternoon's crop ratings data anticipates another decline in the corn and soybean ratings, with a 2-4% lower fall in the GD/EX category. Soil moisture levels have fallen across the Midwest, with July moisture recharging needed.
Over the weekend, Egypt purchased 180,000 MTs of wheat from India, while Saudi Arabia purchased four 95,000 MTs of wheat for November/January shipment. That wheat is expected to be provided by the EU due to freight costs. No forward markets for the Black Sea/Russian wheat have been reported with the ongoing Russian war.
Central US weather forecasts have the EU and GFS showing below-normal rainfall and variable temperature pattern offered for the next 10 days across the Central US. A high-pressure Ridge will be compressed south and west and rebuild across the Intermountain West producing extreme heat into the Plains. Little rain will be evident this week with just a few lite showers over the NW Midwest on Friday and Saturday. The E Midwest holds an arid weather trend with another 10 days of limited rains producing a concerning dry outlook. The GFS has been the wettest model with its 10-day rainfall totals much more generous, which is typical for this time of year, than the EU.
The cattle trade is called higher on Friday's friendly construed COF report. Total on feed was placed at 101%, which was 1% less than estimates, while placements were also 1.7% below estimates. On the flip side, marketing's were down 1% below estimates. Cash cattle trade last week was mostly at $137, lower than the prior week, while live cattle Nebraska sold for 145-148, steady to 3 higher. Cattle in Iowa/Minnesota sold 5 higher on a live basis at $150. The spread between the Northern Plains and Southern Plains markets pushed to a record $9.50 premium to the Northern Plains due to dairy and Mexican cattle mixed in the South. Box beef was seasonally lower last week, with choice declining by $1.28 and select lower by $1.51. Packer margins range between $200-300/head depending on the region where cattle are sourced.