The CBOT turns mixed overnight.

A mixed grain trade this morning, with row crops trading on either side of unchanged while wheat futures drifted. The US Spring Wheat Quality Tour reported high yield potential in NW and NC North Dakota, where yield averaged 53.7 BPA, compared to 45.7 BPA last year. The wheat crop looked uniform, but incidences of wheat foliar diseases, including fusarium blight, were present. Whether these diseases impact final yield and crop quality will depend on finishing weather. The tour finishes today, and production estimates are out later this afternoon.

This Friday, the French wheat harvest progress and condition ratings will be closely followed following widespread reports of light test weight and poorly yielding wheat. Meanwhile, US SRW Gulf wheat values are $21/MT discount French offers as the French market tries to assure itself of future milling wheat supplies.

On overnight news, China lowered its one-year benchmark lending rate by 20 basis points to 2.3%, estimating its economy. The central bank’s move followed other cuts last weekend. China’s economy continues to be slow in recovering due to lackluster consumer demand related to falling real estate values. Today’s lending rate cut appears to do little to stimulate consumer demand.

It’s anticipated that China purchased 2-3 cargoes of US soybeans for late October/November yesterday. Soybean quality from N Brazil is in sharp decline, which has some wondering if the USDA has overstated the 2024 harvest, maintaining an expectation of 153 MMTs. Keep in mind Brazil since its crop size is near 147 MMTs. History says there is a 7/10 chance that the USDA will lower its yields towards Brazil’s expectations. Brazilian crushers are becoming anxious about September forward caps soybean availability.

Weather models for the 2-week central US forecast maintain that it will be hot with limited rainfall for crop areas west of the Mississippi River. The early week rally is paused, and soybeans are correcting a $0.55 two-day gain. But a further bounce in price appears likely amid the unrelenting heat on the way. Weather models agree that the forecast has two weeks of warm to hot temperatures with below-normal rainfall for the Plains, the Canadian Prairies, and the Western Midwest. The coming heat will push crop maturity in areas where soil moisture is low, increasing row crop stress. The Canadian prairies, US Plains, and W Midwest will be the hottest/driest areas relative to normal.

Live and feeder cattle futures closed mixed Wednesday with spot August cattle, the firmest in trade. August cattle are extending recent gains due to their discount to the cash index with the outlook for steady cash trade this week. The back in the cattle market continues to soften. Feeder cattle futures were weaker as the deferred live cattle futures softened alongside a firming corn market. The cash feeder Index gained $0.65 to $258.39. Negotiated fed cattle markets saw initial bids in the South that were quoted at $187-188, but the asking prices are still $190 or better.

Midweek cattle slaughter is put at 360,000 head, unchanged from last week and 12,000 head fewer than a year ago. Box beef values continued their correction with choice down $0.53 and select off $2.70. The choice cutout is down almost $18 from the high two weeks ago, but seasonally, the market tends to forge a low this week and strengthen into the Labor Day holiday.