Fast-advancing Midwest harvest softens grain rally.

This morning’s grain trade is softer, a follow-through from yesterday’s weak close. The Midwest harvest is active now, as it will be for the next two weeks, and the NASS Final Small Grains Report and September Stocks in all positions report is due Monday at 11:00 a.m. The Midwest forecast offers limited rainfall for the Plains and the W Midwest for at least the next two weeks. This will allow harvesting to race ahead for corn and soybeans. The fast-advancing harvest and poor price performance on Tuesday have prices drifting this morning.

Support for row crops will come from the dry weather forecast that will continue for Northern Brazil and the entire Russian winter wheat area for the next two weeks. Extreme heat is still forecasted for Northern Brazil, with high temperatures ranging from the mid-90s to lower 100s. Until rain returns in abundance in both key crop areas, traders will have a sense of buying breaks. Brazil and Russian farmers need to be seeing soybeans and winter wheat at this time if values want to sustain a decline for grains.

The International Longshoremen’s Union, representing 45,000 port workers, is at an impasse on labor contracts, which could produce a strike as early as October 1 at Eastern US and Gulf ports. Although the union does not represent Gulf grain elevators, it does represent stevedores, which could cause logistical slowdowns. Negotiations are ongoing, with strike fears rising.

A group of lawmakers have crafted legislation that mandates that only biofuels made from US beef stocks would be eligible for the 40 5Z tax credits, which range from $1.29-1.74/gallon starting on January 1. The bipartisan bill, called the “Farmers First Fuel Incentives Act”, would increase the 40 5Z tax credits from two years to 10 years. Sen. Roger Marshall, a Kansas Republican, is sponsoring it. With only three legislative days remaining before the November 5 US election, the chance of being enacted nearby is now becoming zero. Whether the bill is taken up in the lame-duck congressional session in late November/December is doubtful. The best chance will be in the first quarter of 2025, and a budget offset may be required to pay for the additional seven years of cost. This is important for the soy oil trade in 2025.

Live cattle and feeder cattle were mostly higher on Tuesday. October live cattle finished just below unchanged, while December marked the second day above all major moving averages. The cash trade is anticipated likely hold off until Thursday. Feeder cattle futures were also similarly weak nearby, while October marked the best close since early August. The cash feeder Index was a $0.52 at $244 died 02.

USDA’s quarterly feeder cattle price forecast was lowered in all quarters in the September estimates. However, the USDA maintains price forecasts are still above current futures prices. The Q4 forecast of $255 is still $9-12 above the CME, while the Q1 forecast of $248 is $10-12 higher than futures. It’s estimated that September 1 feeder cattle inventories are down 4% from a year ago and record low, which keeps price risk subject to scrutiny. It’s about demand and the fears of recession that the Federal Reserve panicked over a week ago and cut rates by .50% versus the guess of .25%.