Wheat firms again on Egyptian export hopes.

This morning’s grain trade is mostly firm, with wheat experiencing the best buying interest. Wheat is awaiting the Egyptian wheat tender on Monday for 3.8 MMT of wheat, which provides for October-April delivery. Soybeans and corn are more subdued as they await Monday’s WASDE crop report, anticipating record yields.

A private European grain analytical firm, Strategy Grains, has sharply reduced its estimate for the EU soft wheat crop to 116.3 MMTs, which is down six MMTs from the July forecast on poor yield results in France and Germany. With the EU durum wheat crop expected to be 6.5-7 MMTs, the total EU wheat crop would be 122.8-one to 3.3 MMTs. If these forecasts prove correct, the origination of world wheat will change. This will drop EU exports by 7-MMTs to 27.5-28 MMTs versus WASDE’s expectation of 34.5 MMTs.

Black Sea and European wheat export losses are mounting. Russian wheat exports are forecast to be down 7.5 MMTs at 48 MMTs, Ukraine wheat exports are off five MMTs at 13 MMTs, and E US exports are down nine MMTs. The world will have to shift and reallocate anywhere from 20-21.5 MMTs of world wheat from the Black Sea/EU to others. Argentina/Australian wheat production will be closely watched in the coming months.

J.P. Morgan is out suggesting that 75% of the world's carry trade has been on while in. This argues that margin calls will diminish in the selling and equity markets and will not be as prevalent heading into the weekend. The expectation is that as US interest rates decline, Japan or global carry trade will not offer favorable returns, with investment capital likely being repatriated back to individual investors' home currency.

Below normal rainfall weather dominates the Central US as remains of hurricane Debbie push northeasterly into the Maritimes of Canada. SE US flooding has threatened livestock and crops, with the current line being the hardest hit. Debbie has made a second landfall across South Carolina with an additional 3-8.00″ rain up the Eastern US coast. A high-pressure Ridge returns to the Plains and the W Midwest early next week, allowing Ridge riding rains to return. The forecast models are struggling with the exact location of rainfall, but Kansas and Missouri will be targeted. The Central and Eastern Midwest are the driest, with limited rain.

Cattle futures held firm on Wednesday while the feeder cattle market was lower again. A steady outlook is offered this morning, with firm equity markets prevailing. Cash trade for Wednesday was light and lower for the week. Small numbers were reportedly sold in Texas at $185, which was $3 lower for the week. Live trade in Iowa was also off $3 at $193, while dressed sales in Nebraska were down $5 at $305. Small numbers reportedly traded in Kansas at $191.50 on a deliverable basis. A lower outlook holds for the rest of the week for the cash market.

Midweek cattle slaughter is reported at 363,000 head, up 3000 from last week and 7000 head fewer than a year ago. Box beef sales were sharply higher on Monday but have given back gains in the last two days. On Wednesday, the choice cutout slipped by $1.96, while the select was off by $0.79. Box beef prices seasonally improve between now and early September and then tail off into the winter.