The grain trade softens as harvest pressure develops.

The overnight grain trade saw a steady-higher start but then immediately was overwhelmed with hedge-related selling offering pressure in the overnight trade. This week is big, with the US, Brazil, and Japanese Central Banks all making rate decisions that will impact the financial markets. The Federal Reserve has not cut its lending rate in over four years but is now expected to drop its lending rate by 25-.50% on Wednesday. The US dollar has been weakening, and if the rate cut is .50%, look for the dollar to fall under 100.00. Remember, dollar weakness improves commodity prices, as it is inflationary.

We are unlikely to see any Chinese grain businesses this week. They are on holiday for the next few days with their Mid-Autumn Festival underway. They return to work on Wednesday, and potential sales numbers will be announced late in the week.

The August Crush and Soy oil Stocks estimate from NOPA will be out at 11:00 a.m. CT today. The crush rate is anticipated to be near 169 Mil Bu, with soyoil stocks falling to near 1,300 Mil pounds. US crush margins have held firm and above $1.70/Bu, with last year’s August crush being 161.4 Mil Bu.

Overnight world wheat futures softened amid uncertainty on whether NATO members will allow Ukraine to use Western produced missiles/drones to strike deep within Russia following threats from the Kremlin and include the use of nuclear weapons. The escalation of Russian war against Ukraine is being closely followed by the world grain markets regarding Black Sea grain export ability. Russian FOB wheat offers this morning remain steady at $217/MT, with the September vessel lineup pointing to another record monthly export total at over 5 MMTs.

The Northern Brazil weather forecast offers hot and dry weather conditions again for the two weeks, which carries into late September. Seasonally, Northern Brazil receives 1-2.50″ of rain during September, with better totals arriving in October. The outright lack of N Brazilian rain garners attention due to soil moisture being at a 30-year low and tropical waterways drying up amid the lack of rain since May. The US soybean market will increasingly focus on Brazilian weather with a flip of the counter to October. Brazilian farmers will need 2-4.00″ of rain for the soybean seed germination to commence spring seeding. Far Southern Brazil in Paraná and Río Grande do Sul are receiving regular rains.

The grain trade is seeing advancing harvest pressure while speculators buy back their net short grain positions. Brazilian weather will take on increasing importance in the days ahead. Sharp breaks can be hard to come by, but sharp rallies will also find willing sellers until 50% of the corn and soybean harvest is completed.

Live and feeder cattle trade did close higher last week, so a firm start is anticipated for this morning’s early trade. Last week’s early selling was rejected at the August lows with October cattle finding support near $174 and then rallying. October feeders gained even stronger and closed more than $8 higher for the week. This is report week with the Livestock Slaughter report on Thursday and the Cattle on Feed report on Friday which may temper rallies later this week.

Last week’s cash trade developed over several days, with former price trends in all regions. Live trade in the north was steady-$1 higher at $180-181, with dressed sales steady $5 higher at $288-296. Live sales in the South were steady at around $181. This week’s early outlook is steady. October cattle have resistance at $180.50-182.00. It will take strong performance in the cash trade into the end of September to cause the trade to rethink its discounts, as the cash trade declines into late October seasonally.