Wheat awaits Egyptian wheat tender while row crops soften.

A mixed grain trade this morning with wheat firm, awaiting results of the Egyptian wheat tender. Corn and soybeans are softer on the cooler Central US forecast. The stock market is on the amends again today, allowing for the second day of index funds that do not need to cover any more of its massive profitable short position.

The August WASDE crop report is out Monday, and traders are expected to continue reducing risk into what is typically a very unpredictable report. For the first time, NASS will not only issue their first farmer survey of summer row crops but also incorporate the Farm Service Agency data to adjust their June planted/harvested acreage estimates. This inclusion of FSA data makes this report even more treacherous from a market perspective.

The EPA has announced that it will conduct audits of at least 2 renewable fuel producers on the authenticity of its feedstock supplies and credits. Industry complaints have been heard loud and clear now that used cooking oil sourced from China and SE Asia is virgin palm oil with just a modest percentage of UCO included. The sheer supply of UCO that has been available to the world market is above the sourcing capacity of China or Southeast Asia. US senators from farm belt states have called on the Biden Administration to respond. Investigations into UCO purity are ongoing in Europe and the US, and the import supplies to both countries are now in decline.

For July, China has imported 9.95 MTs of soybeans, up 2.9% year-over-year. Vessel count data with the supply afloat to China suggests that WASDE should further raise China’s soybean imports by another 2-3 MMTs in the 2023/2024 international crop year to 110-111 MMTs. China’s trade data has been unreliable, and WASDE is now using vessel counts to measure imported grain/soybeans. Brazil exported a record 11.2 MMT of soybeans in July, up 16% from last year. Increased Chinese and world demand accounts for the soy trade search. Meanwhile Brazilian corn is $0.30/Bu more expensive than US Gulf corn for September shipments. Ukraine offers are hard to find for new crop corn, with the September offers at $1.32/Bu over, which is $0.50/Bu more expensive.

A cool/dry weather forecast is in place for the Central US into mid-August. Heat will persist across the Delta and the southern plains, but cooler Canadian air is pushing southward. High temps will hold the mid-70s to mid-80s. A high-pressure Ridge will push East, allowing Ridge riding rains to return to the Plains and the Midwest. The models have few clues about the exact location of rainfall amounts, but Kansas and Missouri will be targeted for the initial moisture. Temperatures start to warm again after August 14, with above too much- above readings returning with highs ranging in the mid-80s/mid-90s.

Yesterday's live and feeder cattle trade was mixed with a steady start offered for this morning. Initial asking prices for negotiated cattle markets have asking prices at $188-190 in the South which would be steady-$2 higher. There was a light trade of under 2000 head quoted in IA at $193, which was $3 lower for the week. Futures are down on the week, but the cash outlook is looking to be steady to lower.

Iowa State University’s estimate for cattle feeding returns in June showed another month of strong estimated margins. The estimated return on finishing a 560-steer Was $198/head, while the estimated return on yearly steers was $318/head. Compared to a year ago, feed costs were $50-60/head cheaper. However, interest costs were $48/head higher on yearlings and $82 higher on Cas. The average life sale price was $12/CWT, which is higher than a year ago at a record high of $197. Cattle markets are technically oversold and deeply discounted to recent cash prices, and with the second day of firm stock market action, they would be due for a recovery bounce.

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