The grain trade finds the first correction of the week.

After a two-day surge following the Labor Day holiday, grains went into a corrective mode. For now, the setback is shallow, but yield guesses are coming out for next week, Thursday’s USDA September Crop Report, which maintains a strong yield bias. Brokerage firm StoneX produced a soybean yield guess of 53 BPA and corn at 182.9 BPA versus their personal guess of 52.6 on beans and 182.3 on corn in August.

It’s anticipated that the NASS will find record-large pod counts for their yield guesses and could possibly produce a number as high as 54 BPA. In next Thursday’s crop report, the USDA will also measure and pull corn ears to mechanically dry them down to assess yield potential. Due to immaturity, the USDA will take until October to measure soy pod weight and seed size. The September dryness will be reflected in the soybean seed size in the upcoming October and November reports.

In next Thursday’s report, it’s also anticipated that NASS could adjust its corn and soybean planted and harvested acres totals, as additional FSA Farm Program Participation data has been gathered. A modest 200,000-acre cut could occur on corn, while soybeans could remain stable with the acreage adjustment that was completed last month. Wheat yield and harvested acres adjustments will be in the September 30 Final Small Grains report.

Today, the USDA should release the latest 2024 farm income forecast. Based on declining row crop prices, the forecast is expected to come in 3-5 points below the February estimate of 116.1 Bil. This will place US debt farm income below the 10-year average and pressure Congress to pass the new US Farm Bill. Already, the Biden Administration and Congress are under pressure due to the $42.5 Billion US farm trade deficit as China secures additional farm goods from Brazil. The challenge for legislators is to find the funds to pay for elevated row crop revenue insurance coverage.

Argentine crushers and oilseed unions said they would prevent a future strike which has put selling pressure on soybean meal overnight after a spectacular multi-day rise. Argentine soy meal production has been rocked by striking workers looking backward to April, which has caused stout cash FOB premiums. October Argentine meal basis is offered at $22/MT premium with the US Gulf at $50/MT over, while Brazilian meal is the cheapest at $20/MT over with 48% protein.

The August numbers are in, and Russia has exported a record 5.5 MMT of wheat. Based on vessel lineups, September looks to record a similar event, if not near record, at 4.9-5.2 MMTs. Even amid the recent rally in French milling wheat and US wheat futures, Russian FOB wheat for October is unmoved at $216-217/MT bid/offer. These are the same prices they have been since the end of August. The cash market is not leading world wheat futures higher. This puts the present rally suspect to a sharp correction.

Dry weather will dominate the Plains, Midwest, and Delta over the next 10 days. A few showers are possible across the northern Lake States, but otherwise, this is a record-dry first half of September. Crops that missed the rains in late August will push to maturity to the detriment of yield. After September 21, rainfall will be limited to benefits as harvest begins to gain traction. Soybean seed size will be the most impacted by the coming dryness.

Yesterday, live cattle futures were steady primarily while the feeder cattle market was under pressure due to the higher corn prices. This morning, a steady outlook is offered for the start of trading. Negotiated cash markets are still at a standstill, with neither bids nor offers quoted. Packers are back to buying for a full week, and feedlots are looking to sell higher prices to slow losses. The outlook heading into the end of the week is steady. Box beef was mixed on Wednesday, with choice gaining $0.93, while select gave back Tuesday’s gains and was off $0.72.

Cattle futures are pricing in a significant cash correction into the last quarter of the year with October cattle $5 under cash in December $600. Typically, December trades at a $4-5 premium in early September, with December futures price even higher. But this year, the February and April premiums are well below average. Significant resistance right now in October cattle is $180.50-182.50, while support remains at $174-175. Look for a wide-ranging trading cattle market in the coming month.