Row crops soften on hopes of Brazilian rain next week.

The overnight trade reversed Friday’s action, with wheat firming as spreads reversed while the soybean market drifts on optimism for moisture next week in Brazil. The warm/dry US harvest weather helped encourage harvest as Hurricane Helene stayed out of some of the southern Midwest, where harvesting continued. Three new US Cushing plans began operations in the past two weeks, which adds to US domestic soy product supplies.

The soybean rally last week was not only just weather in South America, but on Friday revealed a strong move in soybean meal driven by reports that there is unlikely to be a delay in implementing the European Union’s new deforestation regulations from where products are sourced. Corn followed along, supported by expectations that Brazil will stay dry through the first half of October and a tighter world supply outlook, closing 5 cents higher and at its highest level since July 1st. Industry groups are said to be disappointed with the recent news that a delay in implementing EUDR regulations would take legislation and is unlikely. The news drove traders to cover their shorts, with many paying a premium for products to be shipped before the December 30th deadline. In addition to quick ship premiums, we see premiums be paid for deferred shipments that meet the regulatory requirements on deforestation tracking. Brazilian crushers and commercials are said to be working to comply as well but are less likely to scramble to do so, meaning the change in requirements is expected and will lead to more US beans making their way into the EU, at least in the short term.

Today, the NASS releases its Final Small Grains Report and September 1 Stocks in all positions report at 11:00 a.m. CT. The average analyst's guess for September US corn stocks is 1853 Mil Bu, soybeans 354 Mil Bu, and wheat 1984 Mil Bu. The 2024 US All Wheat crop is forecast to be 1983 Mil Bu.

India is back to being an exporter of non-basmati white rice exports, which will be a sizable boost in the supply of world food grain supplies. The government’s decision was announced on Saturday, with Indian rice supplies nearly 33% higher than last year with a favorable monsoon, allowing new crop production to swell.

No rain is forecasted to fall across the central and western US, with the exception of the NE Midwest. Dry weather allows for the 24 harvest to push strongly ahead. There will be several days that ND, MT, and N MN will have potential lows in the 30s, but there is no evidence of any frost/freeze into mid-October. This is a warm/dry harvest forecast for the first half of October, which has not been seen in years.

Rain chances develop next week on October 9 in the North West Mato Grosso. The 10-15 day forecast optimistically predicts widespread rains through N Brazil. These forecasts will be closely watched for any deviation. It will rain in October; the question is, will it rain enough to break the five-month extreme dry spell?

Live and feeder cattle futures had a strong week, with a steady outlook offered this morning in early trade. The higher cash trade helped support the late-week rally, allowing December cattle to score 8 2-month highs. The negotiated fed cattle trade was higher in all regions, with live trade in the north at $186-187 and dressed sales at $94. Live sales in the South are at $185, and sales in all regions were $2-4 higher than a year ago.

Box beef values were lower on the week, with Choice losing $3.50 to an 11-week low. Estimated slaughter margins fell $55/head for the week to just $17, the lowest for late September in 10 years. The COT report showed that for the week ending September 24, the funds bought 13,893 live cattle contracts against commercial selling of 8851. The price gain from Tuesday-Tuesday in nearby futures was a positive $4.40. Last week’s cash market strength was surprising as estimated Packer margins did fall sharply. The Packers will strongly resist higher prices this week; feedlots are fighting to support their own negative closeouts. Support for December cattle on a correction this week is now just under $182, where it broke out to the upside.