Grains are mixed ahead of today's one-day close.

Grain futures are mixed ahead of the July 4 Independence Day holiday. Markets will close at their regular time today and reopen Friday, July 5 at 830 for a full one-day session. Soy oil futures continue pushing higher again overnight as premiums grow over Indonesia, getting closer to implementing a net 200% import duty on Chinese consumer goods to protect their industry. The short soybean oil position by managed funds may have been trimmed already by 89-90,000 contracts which is historically large and could still continue to spark additional short covering.

Outside news this morning is limited for price direction other than the extreme drought continuing to engulf the Black Sea crops, meaning future grain export potential is on sharp decline. High temperatures will range in the 90s to lower 100s well into mid-July, adversely affecting the spring wheat crop and, more importantly, Ukraine's corn crop year-over-year pushed against US exports. Even though some better yields are reported on some areas of the winter wheat crop in Southwest Russia, the July weather pattern is significantly harming the spring wheat potential. The Russian Spring wheat crop typically accounts for 45-55% of the Russian wheat production and so weather will be closely monitored.

Outside of the US weather, it is world weather creating the production shortfalls that will create a more opportunistic fall/winter export program. French wheat yields are also a disappointment, while Argentine corn yields also have many people thinking the harvest there will be below 45 MMTs. It’ll be difficult to sustain December corn under 4.00 unless corn yields rise above trend at 181 BPA. US corn is going to be needed for export much higher than what the USDA is projecting.

The USDA has a record of missing export demand throughout the winter, with their biggest miss being in 2020, when China became a big buyer. Corn pushed up to $7.00 within six months from lows made in the first week of August.

The Brazilian real has fallen against the US dollar recently, boosting farmers' profitability. Rumors of a new tax package from President Lula and/or cuts in government spending are needed to plug a massive government budget hold. The plunging real has helped pressure soybean futures recently.

Midwest weather has additional rainfall forecast into the weekend before a drier/warmer weather pattern starts to build after July 12. A high-pressure Ridge will push eastward into the Plains in mid-July. Until then, it’s a varied Midwest pattern of temperatures, with warming in the 10-15 day window suggesting above-normal potential. The forecast still leans favorable for crops into July 12.

Live and feeder cattle futures had an explosive day yesterday to the upside, eradicating multiple days of technical corrective action. The best gains in the live cattle market were in the deferred for December and February contracts, which picked up more than $2.00 at the close. Strength in deferred live cattle helped support feeder futures, jumping more than $3.00. The cash feeder Index gained $1.98 and is at $257.58. Negotiated fed cattle markets have asking prices thought to be $1-3 higher, and the Packers have shown little interest so far this week. On Tuesday, box beef had choice gaining $1.21, while select was 7 cents higher at $306.48. Beef prices seek support from last minute holiday demand and Packer anticipation of higher cattle trade.