Pro Farmer Crop Tour enters its second day.

This morning’s grain trade is mixed while the Pro Farmer tour continues. Yesterday afternoon’s corn and soybean crop ratings held mostly steady, with soybeans off 2% in the good/excellent category as expected. The forecast still calls for Central US dryness through the end of the month.

Yesterday, the Pro Farmer crop tour offered yield ratings for corn and soybeans, with the Ohio corn yield estimate at 183.3 BPA and the South Dakota corn yield estimate at 156.5 BPA. Both were down slightly from last year. The South Dakota soybean pod count was 1,025.9 pods per square versus 1013 pods in 2023, and the Ohio pod count was 1230 versus 1253 last year. The soybean seed size and filling process will determine the final yield into September.

The NOAA issued an unusual flash drought warning for the Delta and SE Midwest with hot/dry weather ahead. It’s been extremely dry for the past month, and the coming heat looks to push the area into drought. This flash drought area produces approximately 10% of the soybean crop (470 Mil Bu). It’s also worth noting that US double-crop soybeans this year are estimated at four million acres, at risk of late summer heat/dryness.

The Russian government announced that its forecast for the 2024 all-grain crop is 132 MMTs, with 86 MMTs of wheat. The Russian government has not yet found a target for the 2024/25 Russian wheat exports. USDA sees the Russian wheat crop at 83 MMTs, while private estimates are in the 82 MMT range.

The Canadian rail strike could likely occur later this week as labor unions and rail operators are apart on worker compensation. US and Canadian producer groups are appealing to the Canadian president to head off a strike. The Canadian National and Canadian Pacific Kansas City railroads have been unable to agree with their rail workers as the Canadian grain harvest is just starting in earnest.
A choppy week is anticipated as the market trades from focusing on the hot/dry US weather forecast and the crop tour which now enters into the largest producing states.

The forecast for the Central US has high temperatures ranging from the 80s to 100s, with extreme heat based in a line from Texas into Tennessee. This dry and warm last half of August will affect the finish on row crops and require the return of rain in the first half of September. The extended range forecast beyond the next 10 days is highly changeable with little run-to-run consistency. This drier, warmer forecast is anticipated to persist into the first part of September.

Cattle futures posted modest gains on Monday in quiet trading, while feeder cattle futures struggled in the face of higher corn prices. Cash markets look to hold off on active trading until late this week. Packer demand is expected to slow as the 3-day Labor Day holiday weekend approaches.

Last week, Packers bought 73,238 head-on negotiated basis, with 51,194 for 1-14 day delivery and 22,044 for 15-30 day delivery. Cumulative negotiated beef purchases for the year stand at YTD. 17.8% of all cattle transactions have been negotiated, while 65.2% of all cattle have been priced on formula. The remaining 17% has been split between forward contracts and negotiated grid sales. A steady to lower cash trade is anticipated for this week, with the COF report to be released this Friday.