Turn-around Tuesday tries to get underway overnight.

The grain trade is mixed this morning as Turnaround-Tuesday began from the opening. Crop ratings remained unchanged rather than higher, as the market had expected. The yield potential for the Midwest did brighten because of Hurricane Beryl last week, but the duration of coming dryness across the Plains and W Midwest will likely return as a concern. Overnight, reports of hail in high winds were noted in the wake of an intense line of thunderstorms that went across IA, IL, and N IN.

The world ag markets are deeply oversold, and there are longer-term concerns that Brazilian acreage expansion, due to a weak currency and struggling Chinese economy, may limit those plans. The grain trade has absorbed optimistic domestic outcomes while ignoring world production shortfalls that will improve exports later this fall/winter. And excessive fund short in the grain trade that has likely grown to 634,000 contracts as of yesterday is a new all-time record. This means nothing today, but given any reason for an uplift in prices, it could prove a dramatic rally that is much more extensive than would typically be required.

Egypt has tendered large tonnages of wheat, and the lowest offer made to GASC, which is of Russian origin and based on FOB, is $226/MT. This is broadly aligned with Monday’s quotes. The key will be tender details after this morning, as Algeria and Jordan are also now seeking supplies for early autumn delivery.

Corn FOB premiums continue to rise in South America and Ukraine. Ukraine corn basis is now quoted in excess of $1.00/Bu over Chicago futures versus $0.40 over 30 days ago. Ukrainian stocks will be near zero before harvest, and extreme heat continues to linger in E Europe, Ukraine, and S Russia for another 48 hours before moderation occurs. A pattern of below-normal precipitation is most probable in the Black Sea into late month. Brazilian corn premiums have scored newer seasonal highs at $0.95-.98 over. South American FOB corn markets have bottomed, and the US corn market is highly competitive.

The grain trade is running with a no-export attitude, yet current values represent opportunities. Also, crop expectations now have no tolerance for anything less than record yields, given the prices being traded and massive speculative positioning.

The US forecast is broadly non-threatening, and, most importantly, a pattern of mild temperatures is forecasted for July 24-25. Heat in the near term will stay confined to the western US and Western Canadian Prairies. Meanwhile, soaking rainfall favors the Southeast/E coast. Helpful showers are offered in southern Illinois, Tennessee and Kentucky in the next 48 hours. Widespread heat is scheduled to return to the Central US after July 25, and the key is whether this gets pulled in the short-term forecast for the balance of this week. The lengthy spell of dryness across the Northern Plains and W Midwest isn’t an issue this week, but regular rains will be needed to develop in August. Current climate guidance suggests the Dakotas and Minnesota are at risk of longer-term lack of precipitation.

Yesterday, cattle futures ended up mixed after a wide-ranging morning trade. Serious trading interest in the negotiated fed cattle market will again wait until the week's last half. The early outlook at this time is for steady/lower. Last week’s 5-Area average dear price penciled out to $194, down from the record $197 set in the previous week. The futures market continues to price in a significant seasonal correction. At Monday’s close, August cattle were $12 under last week’s cash price, well below the averages at $2.50-3.50 and just a $6 difference from a year ago. CME spreads to the 5-Area average dear price narrow as the calendar advances, but in all months, CME is trading at historic discounts. The market is keenly aware of last year’s fourth-quarter collapse and is reluctant to follow higher cash prices.

August live cattle have major support at last week’s low of 180.82 that needs to hold on a closing basis if challenged or open up a cascading technical liquidation from index funds. August feeder cattle also need to hold 253.50 on the same premise.