Soybeans firm on world veg oil strength.

Grains are firmer this morning, with wheat adding to its gains as further strength develops on French milling wheat. Russia continues to have weather concerns, with an extreme drought in the Southwest region and farmers delaying plantings until the prospect of rain arrives. Strengthening vegetable oils is helping soybeans bounce from their one-day sharp correction.

Fresh export demand news is lacking for now, with end users willing to pay forward premiums to add to their coverage ahead of Thursday’s September WASDE crop production report. It’s for wheat out of Russia, and FOB wheat prices rise $10/MT out into May. In recent years, importers and millers have been trained to secure Black Sea wheat on a spot basis. Dryness issues in Russia are starting to be followed as farmers who plant wheat in November will have a yield drag. Rain is needed for germination, so many are opting to wait.

Concerns are building for an October government shutdown if the House does not pass a continuing resolution for new funding. The current House bill lacks a Farm Bill Extension, and legislative time is running out to pass a new bill this year. It looks like it will be difficult to pass legislation again on time. The old farm bill will be on auto renewal.

Hurricane Francine is expected to come ashore as a category two hurricane this afternoon with heavy rain/gusty winds and a dangerous storm surge of 6-10.00 feet. Rainfall totals are forecasted range anywhere from 2-8.00″ with locally heavier amounts. The rain will have a positive as it will refill the lower Mississippi River, but rains and strong winds will lodge corn and soybean crops. So far, Francine is stronger than what was forecast on Tuesday.

The Plains and Midwest dryness will persist for the next five days, with a cold front producing light rains on weekends and early next week. Rainfall totals will be late and under an inch. The models struggle with rainfall totals, in with the GFS being wetter than the EU model. Rains after September 23 will be of marginal benefit to row crop yield potential as the harvest will start to pick up speed. Due to impressive heat across Canada, no frost or freeze is indicated into early October as a high-pressure Ridge remains aloft.

Live cattle were softer on Monday, while feeder cattle advanced on a weakening corn trade, which has recaptured its losses as of this morning. Feeder cattle will be affected by Thursday’s USDA crop report. Meanwhile, negotiated fed cattle markets have a few primary sales that were quoted in Iowa at $182, which is steady with last week. Asking prices in the South are quoted at $182, $1 higher than last week, but the North is quiet. The Packer bids event is to be established this week.

The CME discounts to the cash trade expect a softening cash trade to develop by the end of September. Box beef values were lower on Tuesday, with choice off $0.29 and select off $148. This year, the choice cutout value has been 6-8 weeks behind every seasonal turn. The August seasonal rally was a bust, but the normal September decline has been slower than usual. Typically, the markets fall fast after Labor Day and bottoms out in October. Look for continued whipsaw action in cattle with cash high and futures bouncing after holding support from the August lows.