The EU lowers its wheat crop size.

Grain futures are mixed this morning after yesterday’s massive selling in wheat and corn, while soybeans softened after being the week's biggest gainer. Wheat futures are mounting a small recovery as the EU cut its wheat crop estimate by 5.4 MMTs to 125 MMTs, which excludes Durum due to the hot/dry weather during June and lower initial harvesting results. A year ago, the EU harvested 130.1 MMTs of wheat and expanded their seedings on high prices. The EU non-durum wheat crop will be cut, likely another 2-4 MMTs and upcoming reports. The EU 2022/23 wheat ending stocks are historically tight at 9-12 MMTs. EU livestock feeders will have to consider other grains for feedstuffs.

There were 842 contracts of Chicago wheat and one contract of Kansas City wheat tendered for delivery against the July futures. No corn, soybeans, soy oil, or soymeal, are oats were tendered. US ethanol grind/soybean crush margins improved substantially this week on the CBOT decline, further firming corn basis bids.

It’s been a bad quarter for fund managers and investors as the second quarter was all about the fear of recession hitting from the tightening of credit by the US Central bank. This created a risk-off mentality in a host of assets regardless of market fundamentals. Selling was across a gauntlet of stocks, cryptocurrencies, and all commodity classes. To date, there is no sign of a US recession, and end-users are being granted an opportunity and reprieve in purchase prices. There is no proof of reduced grain trade in a recession in the 21st century.

The Central US weather forecast shows that warm, dry weather will hold across the Midwest into Monday, July 4. Models forecast several thunderstorm complexes to produce rain across the N Plains, the Midwest, and Eastern Delta. Rainfall totals have been cut from previous days, the coverage of rainfall greater than 1.00” falling over 33% of the area. The W Delta and S Plains will be missed, where a deepening drought is developing. An amplified high-pressure Ridge forms over the Intermountain West and progresses eastward into mid-July, creating extreme Central US heat.

The cattle trade is called steady higher, with heavy supplies of front-end cattle being a limiting factor. August is undervalued compared to the current cash market. More trade this week has been marked at $138 in the South, which is steady to lower than last week. Northern dressed trade was mostly around $234, again slightly lower overall than last week. The trade is likely wrapped up for the week, especially with the holiday weekend on the horizon.

Beef carcass values were lower at midday and finished with losses of $0.88 on the choice, and select was $0.24 lower. Load count was light at hundred two loads. Weakness in retail values is a limiting factor in prices. Export sales Thursday morning had shown net sales of 17,000 MTs for 2022 were up 52% from the previous week and 6% from the prior four-week average. South Korea, China, and Japan were top buyers of beef last week.