Wheat prices lead overnight gains.
Grain futures are higher while soybeans are mixed, heading into the last day of the week. A strong recovery from Wednesday’s wipe out has corn lower by a couple of pennies on the week, soybeans softer by over a dime, while wheat pricing is still $0.20 lower on the week despite its massive recovery since Wednesday’s low. This morning’s job is a number shown employment job build much stronger than anticipated at 372,000 versus the estimate of 265,000. The Federal Reserve will likely be prompted to raise rates at the end of July at the next meeting by as much as .75%. The US dollar firmed this morning after the data to 107.15.
Despite the outside market influence on grains, the weather is dominating not only in the United States but in Europe. The European weather forecast remains hot and dry for the next two weeks threatening the summer row crop yields. It’s anticipated that the EU corn crop is already in sharp decline, with private sources suggesting the crop could decline to 60-60 one MMTs versus the USDA’s current assessment of 68.25 MMTs.
The US weather forecast is concerning going into next week. The EU and GFS models show the final push of rain will occur over the next 24 hours across the Eastern and South-Central Midwest before an NW upper air flow produces generally dry weather conditions into July 20. The GFS ensemble maintains a drier trend in late July with rising temperatures. The EU model is less warm, with a few showers on July 18. The extended range models have ridging in the Central US according to the GFS/Canadian models. Concerns remain elevated going into pollination.
Yesterday’s cattle trade closed mixed with the market finally seeing some cash interest starting. The southern plains mainly had $1 lower cattle than last week at $137. Northern cattle though were anywhere from $147-151, which was steady to $1 higher than last week. The cattle market continues to consolidate, looking for a reason to exit the current trading range. Economic and demand concerns continue to limit upside movement despite the longer-term overall late production prospects on cattle numbers tailing off and 60 days.
The recent cumulative beef cow slaughter report at 1.9 Mil ahead has been the largest on record since the USDA began reporting the data in 1986. Relative to the January 1 beef cow inventory, cow/calf produces have liquidated 6.3% of the beef cow inventory, while the heifer retention rate has been the lowest since 2004. The US beef cow herd is shrinking at a historic rate.