August crop production and WASDE report out at 11:00 a.m.

This morning’s grain trade is lower across the board as the trade awaits what should be record US corn and soybean yields in today’s NASS crop report. The yield guess for corn is 182.1 BPA, and for soybeans, 52.5 BPA. These are based on producer surveys with actual field surveys in the September crop report. Adding to the mix and the volatility is that today, NASS will also update the planting/harvested acres with the incorporation of FSA participation data. This is historically done in the September and October reports, but they are bringing the data forward to today’s trade due to improved reporting methods.

Soybean meal was the only firm grain commodity overnight, as Argentine oilseed crush workers remained on strike from over the weekend seeking higher wages. The strike halted crush operations and impacted more than 500,000 MT of Argentine meal exports. The strike continues today, with the Argentine government likely to intervene sometime this week.

The large Egyptian GASC wheat tender for the entire year’s worth of wheat imports should be known today. This includes the period from October into April, with the tender size at 2.8 MMTs. This tender will gauge Russia's willingness to offer wheat well into 2025 and at what premium they will extract. Also, will logistical companies be willing to commit to ocean freight contracts into 2025 amid the escalating mid-east war, which is likely why Egypt is tendering for so much wheat?

The grain trade is almost universally bearish on non-threatening Midwest weather and the expectations of rising yields and new crop stocks from WASDE. Reaction to the report is very important as there is a decline in non-US grain production, which will produce a strong and growing US export demand that will offer support as the grain trade forges price lows. What needs to be answered today is how big is big on the US crop size for the massive short trade from managed index funds to look for an exit strategy.

The Midwest forecast has Ridge riding thunderstorms producing showers and storms, with one system noted across Iowa and Missouri this morning. There are rain chances across the Central Plains and the Western Midwest nearly every day this week before dry weather returns on the weekend. Seven-day rainfall totals show heavy rains of 2-4.50″ look to fall across most of E Iowa, Missouri and all of Illinois. Showers spread eastward and the remainder of the E Midwest later this week. Warmer and drier weather is forecasted for week 2, but there is still low confidence.

Last week, it was a lower close for live and feeder cattle futures despite Friday’s sharp rally trying to claw back some losses in the discount to cash. Last week’s negotiated cattle trade was lower for the week in all regions. Texas had seen trade at $186 off $2, and sales in Kansas were $one lower at $1 87. Live sales in the north were off $3 at $193, while the dressed trade lost $5 at $305. This week the early outlook remains steady to lower.

Cattle slaughter last week was 591,000 head, off 2000 head from the previous week and 12,000 head lower than a year ago. The average carcass weights were 142 pounds, which was 21 pounds heavier than a year ago, and production was .6% more than last year. The Commitment of Traders report showed that the week ending August 6 had funds selling 21,911 contracts while commercials bought 11,262 contracts. The loss from Tuesday through Tuesday in the August futures was $5.725. This was the largest week of fund selling in over a year and the largest week of commercial buying since early April. October live cattle have resistance at 182.50-183.50, while September feeder cattle have resistance at 244.00-246.00.