The overnight grain trade opened and remained firm.

This morning’s grain trade is mostly higher, with soybeans leading the advance with Pres. Biden is backing out of the presidential race, and the prospects of a different Pres/VP pick in the Chicago convention in August open up a new element.

Traders are wondering if China may pick up its soybean purchase program ahead of likely new tariffs under a Trump presidency. Buying large quantities now could help Democrats in the rural states.

There is a prospect that Trump could use the threat of rising tariffs to push China back into the Phase 1 agreement in which China promised to secure $1 35 Bil of US goods annually through 2021. The Biden administration never pushed China to adhere to the Phase 1 trade agreement and allowed the president's TPA (Trade Promotion Authority) to expire in June 2020 for the first time since 1994.

The upcoming August crop report anticipates that the FSA data will show that NASS should cut its 2024 corn and soybean acreage by at least 1 Million acres each. This will score an intermittent price low for grains, which likely has been in the making over the past week.
This morning, Paris wheat futures are higher, holding last Friday's sharp gains on crop quality worries. EU wheat quality of the French and German wheat continues to be questioned, with a large portion missing milling quality status.

The EU is set to place provisional duties on Chinese biodiesel following an analysis and ruling that showed it sold the fuel at subsidized low-price levels. Chinese companies exported 1.8 Mil tons of biodiesel to the European Union in 2023. The Chinese dumping of biodiesel caused the EU to ship a record amount of its own biodiesel into the US to garner a return under the US Blender Credit Program. It is estimated the US is importing 50,000 barrels of biodiesel daily. The EU's ruling on Chinese biodiesel should provide the US Congress with evidence regarding China’s effort to profit from the green fuel program and the subsidies for using virgin vegetable oils.

Cool and dry weather will occur across the Midwest, warming and dry weather across the northern plains, and hot/dry weather will be maintained on the Canadian Prairies this week. A Midwest warming trend begins on the weekend, with the upper 80s to upper 90s returning as the Western US high-pressure Ridge shifts eastward. Meanwhile, soaking rainfall in the Gulf states and SE US will have rainfall of 2-6.00″. The westward extension of the Bermuda high-pressure Ridge across the SE US pushes Gulf moisture northward, producing abundant rain for the SE US and Gulf states. Rains for the northern plains are not forecasted until August 1. There could be a few localized showers, but coverage of meaningful rain will be less than 10% of the area. The Senate range forecast calls for above-normal temperatures to stay a feature of the forecast due to the mean position of the Ridge across the Plains and the Intermountain West.

This morning, a firm outlook is anticipated for cattle futures from Friday’s July Cattle on Feed report, which leaned friendly on June placements coming in at 93%. However, the cash market outlook is steady, as the report confirmed that it is larger than last year’s available supplies in the feedlot. Last week’s negotiated fed cattle trade was mostly steady to lower, with live trade in the north at $196, which was off $2, and the dressed sales also off $2 and $310. In the South, the trade was mostly at $188, steady with the previous week.

Cattle slaughter last week came in at 584,000 head, the smallest non-holiday kill since March, and was 42,000 head less than a year ago. The average carcass weight at 844 pounds was 31 pounds heavier than a year ago but could not offset lighter numbers. Beef production was 2.8% lighter than last year. Despite the lighter slaughter, the choice cutout fell $8 last week, and select was off $4. The cash market has turned lower but the CME trades are carrying big discounts to current cash price levels. Friday’s Commitment of Traders report showed that as of July 16, funds had sold 3,686 contracts against commercial buying of 37,36 contracts. The Tuesday-Tuesday price change difference was a positive $0.32.