Grains remain in a sharp recovery.
Grain futures worked on both sides of unchanged in the evening (a few lite showers were popping up in the W Midwest, which created evening weakness) but firmed in the early morning hours as the Central US weather forecast, along with Europe’s weather, continue to offer hot and dry weather beyond on this weekend. Today the Federal Reserve announces its interest rate hike, and the US dollar is soft; again, a suspicion of a potential topping of the US dollar is in the making.
Turkey is prepared to lead one of the first stranded vessels out of Ukraine later this week with estimates that there are 23-24 grain vessels at the three nominated ports that would also like to make the trip. Russia is warning that unless the world drops all sanctions on Russian grain exports, the just signed corridor deal will quickly collapse. Russia has not mentioned what they are demanding on grain sanctions, but it’s understood that it is likely related to banking and freight insurance issues. With the recent missile strikes on two Ukrainian ports and Russia’s posturing, it’s difficult to understand if this deal can be maintained without a treaty on the war.
India, which was going to save the world with wheat back in March, has seen its values now soar to record highs since the completion of its harvest. Many analysts argue that the 2022 Indian wheat production crop as well below stated supplies of India and USDA’s estimates continue to maintain 100 MMTs. Many have the Indian wheat crop likely at 92-95 MMTs, which means India will be importing later this year some 4-6 MMTs of wheat.
Forecasts remain consistent overnight with extreme heat for the Plains/Midwest with an ongoing drying trend for the NW Midwest. A high-pressure Ridge builds north and east early next week, pushing the jet stream back into Canada. This provides a dry and extremely hot first 10 days of August for the Plains, Midsouth, and the W Midwest. There will be numerous days when temperatures will reach the lower 100s. For crop areas like IA, NE, MN, and the Dakotas, where soil moisture is short to very short, the stress on crops will start to become acute. Trendline yield potential is being lost in the coming weeks. Crop ratings have been on the decline for the past three weeks and will continue that trend.
Indications have live cattle steady-lower and lower for feeder cattle as the strong moving grain prices continue higher overnight while the cash cattle market has softened this week. Late cash trade was reported in parts of Texas Tuesday afternoon with deals at $135, which was $1 lower than last week’s weighted average. The rest of the cattle country remained quiet. More significant business will likely develop today and Thursday. Beef retail values finish mixed with choice gaining $1.00 while select lost $1.12. The load count was 115.