Soybeans lead overnight price stability.

This morning’s grain trade is firmer, with spot soybeans leading the strength. July soybean and soymeal futures are the strongest, with one known NW Midwest crush plant having suspended operations due to flooding. There may be others yet to follow. Board soy crush and corn grind margins have rallied strongly due to the roadway/rail and production disruptions due to the flooding. Short sellers in the July soybean and meal contracts worried about spot supply availability amid rising cash basis bids. The July/November soybeans spread pushed out over $0.60 overnight as the market tries to draw remaining old crop soybean supplies from producers.

Cash basis bids for corn are also firm, with Central Illinois bidding $0.16 over and Cedar Rapids paying $0.24 over. The corn basis has many wondering if the US corn stocks will be less than the 4,875 Mil Bu forecasted. With strong Midwest cash basis bids and oversold technical indications, along with the erratic world weather ahead of upcoming reports, the Bears are wondering if it’s time to bank profits with the end of the month and quarter coming. The acreage and stocks data is out 11:00 a.m. this Friday.

The Black Sea drought is anticipated to worsen over the next 10 days amid warm/dry weather trends. A few showers did help crops in June, but the heat and dryness have returned, as shown in yesterday’s video. Like the Central US, corn pollination for Ukraine and Russian corn crops will start in several weeks and extend into late July. It will be essential that rain falls across Ukraine/Russian corn production areas in July. Faltering black Sea corn production and Argentina’s loss due to corn stunt disease, with Brazilian corn production also down 20 MMTs from last year, have balance sheets tightening. Foreign corn losses make the US corn harvest more important, and there will be difficulty in coming up with the 181 BPA, which is difficult to attain with regional issues.

The trade has wheat futures back to the March lows while the E Midwest cash bids have firmed, and farm selling has all but been shut down by low prices. Wheat prices have been the bearish lead in the entire grain trade over the past month, but seasonal lows should be in place right after the first of July. When harvest gets north of Hutchinson, Kansas, the wheat trade tends to stabilize and improve. Chicago wheat balance sheets have ending stocks forecasted to be 85-90 Mil Bu, the lowest in years. World tables do not offer importers the luxury of sitting on their hands. Bidding will eventually arrive after the feasting ends on incoming grain from harvest, and the remainder gets locked away.

Ridge riding storms will produce rain across the E Midwest, with the Delta and the Eastern US holding in a drier flow. Heat will be a big factor across the south-central US with numerous highs being 5-15° above normal days. Heat is forecast to push into the Central US after July 4. The intensity and duration of the heat could impact Midwestern corn pollination. The extended-range models are less intense with the heat today than yesterday, but they have been changeable for most of the week. The flooded end of the Midwest will not be dry, but any big rain will be farther south across the northern half of the Midwest. The long-term and less reliable 16-20 day forecast from the European model shows hot, dry weather heading for the Midwest.

Live and feeder cattle futures were softer on Tuesday but produced a mixed closed. Wholesale beef prices firmed 75 cents for Choice and 19 cents for Select on Tuesday, while movement improved to 121 loads. Strength in wholesale beef prices hasn’t kept pace with the surge in cash cattle prices, but it has been enough to keep packers cutting margins in the black. Cash sources expect cash cattle prices to be steady at best this week, though positive margins could keep prices from falling much. The June Cold Storage report showed the May beef stocks were down 3% from April and 0.5% less than a year ago. This marked the sixth consecutive month of year-over-your declines, but the difference last year was the narrowest of the year. Stocks will likely fall further into the summer and recover in the fourth quarter. The cash cattle trade has reached record prices during what is the most bearish time of the year. Fed supplies are tight, but the near-term market outlook remains neutral for rallies.