USDA July crop report out at 11:00 a.m.

Grain prices are softer ahead of today’s USDA July Crop Report as the market is planning forward and fully expecting larger stocks data on the enlarged corn area in higher corn and wheat stocks already applied in the June 28 report. If the data is neutral, this sets up a short-covering reaction. 2020/25 corn ending stocks are put at 2,279 Mil Bu, soybeans at 440 Mil Bu and wheat at 787 Mil Bu.

China's June crop estimates for 2024 were left unchanged. They pegged their corn crop at a record 297 MMTs with imports of 13 MMTs and a soybean crop at 20.54 MMT with imports of 94.6 MMTs. China is notorious for understating imports until late in the crop year when they make statistical adjustments. Many anticipate that the Chinese corn crop is under 290 MMTs, increasing their corn needs.

France continues to see lower wheat production prospects. They have already harvested 4% of their wheat crop, well below 26% last year and the five-year average of 19%. They continue to struggle under cloudy, cool weather and saturated soils, which have slowed harvest and adversely impacted their crop quality. Private sources estimate that the French wheat crop will falter to the 25-26 MMT range, down from the current estimates of 29 MMTs.

Also, world troubles continue for the Black Sea and Eastern Europe region as extreme heat is considered record, and limited rainfall continues ravaging their row crops for the next two weeks. Highs will be in the 90s to lower 100s with limited rainfall over Ukraine and Eastern Europe corn crops which are now pollinating and in their fill. Sunflowers and spring wheat were also impacted. The weather pattern appears stuck and shows the promise of change into August, with acute stress to be felt by the regional summer row crops. US export potential for this winter continues to brighten better than current estimates from the USDA.

Next week, on Monday, the NOPA June Crush report will be released. It’s anticipated to be a record 178 Mil Bu, up from last year’s 165. Soyoil stocks are pegged at 1, 670 Mil pounds, down slightly from last year’s 1,690 Mil pounds. Soybean crush board estimates are estimated at $1.54/Bu, with soyoil share of that crush at 41%. Soy crushers continue to push basis to aggressively maintain their daily crush margin profitability.

In Brazil, their corn FOB basis rallied Thursday to $0.95 over for September, up seven cents/Bu to $195/MT. This compares to US Gulf offers at $0.75/Bu or $187/MT. Brazilian September FOB soybean offers are higher at $1 died 05 over than the US Gulf at $1 died 00. A year ago, Brazilian FOB corn was offered at $0.30 below the US Gulf, which garnered considerable world feed demand. US corn is now favored for exports.

The forecast for the Central US is drier and warmer, with limited Plains and W Midwest rainfall for the next 10 days. The SE US is favored for any meaningful rainfall. The best chance of rain is next Thursday/Friday as a short way pulls through the E Midwest. But until then, any Central US rainfall will be less than point 35″ with coverage no better than 20% of the crop area. Forecast models struggle with rainfall patterns beyond the next 7-8 days; the EU model goes with a warmer, drier pattern to persist with a high-pressure Ridge positioning across the Intermountain West, which maintains the warm weather and below-normal precipitation pattern.

Live and feeder cattle futures were again higher yesterday for the second day in a row after heavy selling that started late last Friday. The cash cattle markets were quiet on Thursday following Wednesday's trade. Live cattle have traded in the north at $1 lower at $ 198, and the dressed trade was $were to lower. Live sales in the South were $2-4 lower at $188. The seasonal outlook is neutral for the next few weeks, with beef and cattle prices typically declining until mid-August when prices slightly improve into Labor Day.