Grain prices burdened with seasonal apathy.
Grain futures worked lower overnight except for wheat prices that crossed unchanged several times, as Egypt did announce they would accept protein as low as 10.5% in order to receive alternate sources of wheat from the US via SRW wheat being the cheapest in the world presently (Egypt announces results today). Grain prices moved lower on the apathy of negative seasonals that are keeping exports soft and a forecast that implies potential rain in the 7-10 day period for portions of the W Midwest.
The market awaits the signing of the Grain Pact between Russia and Ukraine later this week that would allow a Ukraine Grain Corridor to move large supplies of grains that are stuck at ports. The key to seeing that this may have a chance is Thursday Russia is expected to turn on the natural gas pipeline Nord Stream after being close for 10 days for maintenance. There is talk that if the grain corridor does not open, that farmers will only plant 1/3rd-2/3 of winter wheat acreage this fall due to lack of revenue, and concerns that the war may rage through the winter. Ukrainian farmers would rather take a chance with spring crops next year with less production to store with rapeseed or soybeans.
The Central US weather forecast is slightly wetter in the far Eastern Midwest in the 8-10 day period as high-pressure ridging is allowed to slide westward briefly. This will pull additional needed moisture into MI, IN, and OH. If realized, this will allow temps to moderate to more normal levels beginning July 30. Extreme heat will be in place across the Plains for the next 5-6 days with high readings of 100-106 this weekend throughout the central portion of the country. The EU model shows 10-day potential rainfall will be confined to the north and Eastern Midwest. The bulk of this rain does not occur until July 27-28.
Live cattle are called mixed with feeder cattle higher. July has become a hot month as contributing to production problems for many cattle operations. Stressful conditions include parched pastures, feeding and shipping livestock, as well as marketing livestock. The illiquid feeder cattle contract stays prone to volatile moves, whether higher or lower. Consumers have been noted as moving to cheaper meat products, continuing to plaque the live cattle futures market in trying to produce a picture of improving prices later this fall. The early outlook for Fed cattle marketing's this week is near steady while recent cash trends have been down and seasonally it is the wrong time of the year for cash cattle prices to rally. Box beef demand however started the week with choice values up a $1.64 while select gained $0.87. Pasture ratings reported worsening yesterday and are second only to the worst ratings of 2012. The seasonality of beef cattle trends is for a low to be forged by early August.