The June WASDE report is out today.

This morning’s grain trade is mixed with wheat stumbling again on yesterday’s sharp gains getting corrected while row crops firm on coming extreme heat heading for the Midwest that produces above/much above temperatures and below normal rainfall into June 26.

USDA’s reports at 11:00 a.m. CT will feature updated old- and new-crop balance sheets and the second winter wheat production estimates. For 2023-24 ending stocks, analysts expect corn at 2.009 billion bu. (2.022 billion bu. in May), soybeans at 346 million bu. (340 million bu. in May) and wheat at 688 million bu. (unchanged from May). For 2024-25 ending stocks, analysts expect corn at 2.079 billion bu. (2.102 billion bu. in May), soybeans at 448 million bu. (445 million bu. in May) and wheat at 778 million bu. (766 million bu. in May). Analysts expect winter wheat production to be 1.298 billion bu. (1.248 billion bu. in May), including 716 million bu. for HRW (705 million bu. in May), 350 million bu. for SRW (344 million bu. in May), and 229 million bu. for white winter (unchanged from May).

Late Tuesday afternoon, the head of the Brazilian Senate signed a bill that included a portion of the PIS/COFINS compensation in last week’s Lula tax bill. This will help reduce a portion of last week’s tax burden on exporters. The annulling of this portion will ease but not eliminate the new taxes on Brazilian farmers. The bill provided Brazilian agricultural hopes that the entire bill could be struck down by September/October, slowing new cash corn/soybean sales. The Lower House and Senate will continue their debate on the tax to fix Brazil’s growing government deficit.

Today, China’s National Meteorological Society warned that extreme heat and dryness would impact crops, human health, and energy use. SE Asia is bracing for a hot and potentially dry summer. Record heat has been endured through SE Asia, with the Indian monsoon sputtering across its key northern oilseed areas. Tie this to the troubles in the Black Sea region along with South America’s spring troubles and diseases. Also in the mix is the worry that the EU wheat crop could fall sharply amid the prevailing lack of sunshine, cool temperatures, and persistent rainfall. You can start to see how world production is not increasing supplies, and the US will need to be a dominant provider of these dual hemisphere issues.

The Central US weather forecast is becoming threatening, causing overnight strength in row crops. Additional weather premiums could accumulate after today’s WASDE data numbers are out of the way. The emerging heat is under a high-pressure Ridge that is featured across the Central US into late June. The models remain varied in their rainfall forecasts, with the EU model's 10-day forecast being the driest. The coming high for pressure Ridge will offer a period of above too much above normal temperatures and below normal rainfall into June 26. The exclusion in the dry pattern is the N Plains and NW Midwest from the “ring of fire” storms. Yet the projected 3-5.00″ of 10-day rainfall will produce a new round of flooding. High temperatures will range in the upper 80s to upper 90s under blazing sunshine into June 24. The extended 11-15 forecast range maintains extreme Central US heat and the Midwest high-pressure Ridge.

Yesterday, the cattle trade pushed lower with the weaker outlook offered for early trade today. August live cattle stalled and turned lower at 180.00, with similar price action in August feeders. Feeders turned lower even with the corn trade softer yesterday. Negotiated fed cattle markets were at a standstill on Tuesday, and an active trade could hold until late last week. Packers continue to struggle with margins and are trying to move beef prices higher by limiting fee cattle purchase prices. Estimated slaughter margins last week were at $81/head, up from near breakeven in early May. Still $108 less than a year ago and the lowest in 11 years for early June.

Box beef was mixed on Tuesday. The choice picked up $0.78 to $318.21, while select slipped $0.42 to $300.62. Key support continues to remain on August live cattle at 175.50 (trendline) and 176.00 (last week’s low), which puts the line in the sand at 175.50-176.00 to maintain upward momentum.