World financial markets have created a universal risk-off day.

This morning’s grain trade is lower after a firmer start overnight. The weakness in the Asian markets has caused Dow futures to go down over 1100 points this morning, causing large risk aversion due to financial market volatility. The Japanese carry trade is in complete unwind, with Japan’s Nikkei stock market dropping 12.4% overnight, which is the worst daily loss since Black Monday back in 1987.

The US dollar is under selling pressure as speculators dump Bitcoin over 11%, and the US dollar is down $0.78, trading at 102.21 at 7:30 AM. Due to the volatility and risk aversion, commodities are being liquidated alongside the weak US dollar as traders seek liquidity in the money markets. The yield on the 10-year treasury note has tumbled to 3.74%, which is the lowest in more than a year. Open interest in the short grain trade is 580,000 contracts, which will likely continue to see short covering/profit-taking to reduce position size emerging sometime this week.

Overnight strength surfaced in soybeans in the evening as China again seeks soybean purchases for October/November. China appears to be engaging in a larger US purchase program, which seasonally starts in August forward for US shipments. The overnight weakness in crude oil helped reverse the strength in corn and soybeans that initially got underway.

Russian spring wheat areas will remain exceptionally wet for the next 10 days, raising crop quality and quantity concerns within the Black Sea grain market. Ukraine FOB corn offers are sharply higher this morning on falling crop ideas. Dryness, meanwhile, persists across Ukraine and SW Russia, with seasonal temperatures now after extreme heat over the last three weeks.

The weak US dollar will eventually underpin commodity values after margin call selling ends. Financial market liquidation is creating sympathy selling across all complexes. Chinese demand for US soybeans will start to grow and there is the concern of the Black Sea weather that has sharply reduced corn and wheat output. The current market liquidation selling is offering up opportunities for end-user buying. The markets are creating a flush sale for index funds to cover their massive short position in to.

Dry weather continues to dominate most of the Central US this week as the remains of hurricane Debbie meander across the SE US, producing record amounts of rainfall that range from 4-20″. Catastrophic SE flooding will result, which threatens livestock and crops. The Carolinas and Georgia will be the hardest hit. The storm pushes northward on Saturday, producing heavy rains across and E US. Hot dry weather dominates the Plains, SW Midwest, and the Delta this week, with rain chances across the N Plains and the Great Lake states increasing. Rainfall of .25-1.25″ is anticipated in the N Plains.

Live and feeder cattle futures tumbled last week, and another sharply lower outlook was offered this morning. Fund liquidation weakness in the financial markets sets the early week tone and puts cattle under pressure. Last week’s negotiated fed cattle trade was lower in all regions, with live trade north off $2 at $196 and dressed sales off $2 at $310. Live sales in the South were also lowered by $2 at $188.

Cattle slaughter last week was off 7000 head and down 22,000 head from a year ago. The average carcass weight was 28 pounds heavier than a year ago, and production was off point 4% from last year. Box beef values were firm, with the choice cutout last week unchanged and select off $0.29. The choice cutout is $11 higher than last year, and select is $20 higher. October live cattle found support Friday just under $180, and that area looks to be attacked on the opening. Closing below that targets continuation moving average support at 176.00.