The grain trade tumbles in the Sunday night session.

The grain trade is lower to sharply lower this morning after wheat opened higher last night on rising Russian wheat prices but was drug lower with the heavy selling that overwhelmed the start of the session for corn and soybeans. News that the US will establish a new military command base in Japan to bolster its SE Asian Pacific presence propelled the selling. The US's economic and political battle with China continues under the Biden administration, and traders are worried about future demand. What cannot be ignored is that China and the US both remain important sizable customers for each other’s products.

Wheat prices initially tried to firm overnight amid excessive rain that’s occurring in the Volga Valley while drought continues in the SW Russian area, which has lowered yields. Spring wheat is now suffering from disease pressure, and there is wheat in standing water. 45-40% of the Russian wheat production comes from spring week, and quality and quantity risks are rising there as well. With Chicago wheat tumbling, Gulf SRW wheat is now at $415/MT a full $5-6/MT below Russian wheat offers which is maintaining that Chicago wheat is the cheapest wheat in the world.

Opened interest on Friday’s collapse had fallen sharply in the grain complex. Soybean interest was down 22,277 contracts, soymeal off 10,945 contracts, while soyoil gained 2,763 contracts. Corn lost 11,668 contracts, but wheat picked up 5354 contracts. There are 44 contracts of soybeans registered for delivery of August contract this Wednesday, with 1166 contracts of soy oil.

The heat is now continuing across the US, with much above normal temperatures forecasted till August 8. The heat will push crop maturities, with Canadian/US Plains crops suffering from the deepening dryness. Kansas will be the center of the heat for numerous days, with readings in the upper 90s to lower 100s. Ridge-riding storms produced Midwest rain from Iowa into Ohio every 2-4 days. Corn and soybean ratings this afternoon are anticipated to be steady/2% lower. The Central US will have highs ranging from the 90s to lower 100s across the Plains, with Midwest highs ranging in the mid-80s to upper 90s. Confidence in the forecast beyond the next 10 days diminished amid the uncertainty of potential Atlantic tropical storm systems. The GFS offers cooling for the Lake States in the 11-15 day period, but with the heat pushed southward.

Live and feeder cattle futures were higher last week, with a firm outlook for early trade. The cattle market got its boost from the support of the July Cattle on Feed report and the discount of futures to cash, which allowed technical buying to support a higher close on the week. The feeder cattle index moved in a wide range during the week before ending mid-range to mark the second highest ever weekly close. August feeders finished just above the index, and autumn futures were within a few dollars. Negotiated fed cattle last week was higher in all regions the top prices again in the north, where live cattle sold $2 higher at $198 and dressed sales rep $2 and $312. Live trade in the South also picked up $2 at $190.

The Commitment of Trader’s report showed both funds and commercials as net buyers. For the week ending July 23, funds picked up over 3600 contracts, and commercials bought just under 1300. Meanwhile, the Tuesday-Tuesday price change for the COT report had future gains of $3.625. This was the largest weekly increase since late May. Cash premiums remain strong, and it’s underpinned by the August cattle, supporting October in challenging a gap left last November, which is at $191.