Wheat again leads overnight strength with sharply higher gains.

The overnight grain trade saw wheat trade sharply higher, pulling corn and soybeans in its wake. The dry windy conditions across the HRW wheat belt over the weekend along with India and its neighbors also seeing dry conditions exasperated by heat as they enter grain fill, is causing index funds to start lightning up their short position. This dryness also extends to east China and the Black Sea. With a large index fund short position, without rain in the next few weeks, wheat could start a dynamic rally.

Developments over the weekend between Ukraine and Russia were relatively limited, with both countries trading attacks like a ceasefire isn’t on the table. Ukraine has given up most of the territory captured in Kursk, working to pull their troops out of the area according to reports. President Trump and Russia’s President Putin are expected to speak over the phone tomorrow, with an in-person meeting still possible, according to sources. Some world leaders have pointed to Putin’s demands in response to the proposed ceasefire as a sign he is not ready for peace, something Putin contends. Many continue to say an end to the war is bearish in one breath while mentioning its end will likely have no noticeable impact on grain trade in another.

China’s State Council and CPC Central Committee released their “Action Plan to Revitalize Consumption” over the weekend following the conclusion of their two-session leadership gathering. The plan has several key components, with goals of increasing incomes, improving consumption capacity, upgrading service quality, and “optimizing” consumption environments. The first initiative outlined promotes income growth through a stabilization of the stock market, property values, and an increase in the minimum wage and other supports. From childcare subsidies, worker’s compensation insurance, and better elderly care to increased trade-in programs and launching new kinds of tourism, it appears Chinese officials are doing what they can to address some of the deep-seated issues so many analysts have said are weighing heavily upon the country’s economic outlook.

We will get updated export inspections later this morning. Some traders have pointed to the large amount of corn that needs to be shipped each week as potential reasoning for the USDA’s lack of adjustment to the export outlook seen in last week’s report. With the potential we see a sharp increase in port fees after next Monday’s USTR public hearing, we will likely see another big week of movement. Also, today there are updated crush figures from NOPA at 11:00 a.m. CT which should show a large soybean crush of 184-186 Mil Bu. Crush margins have been poor when compared to the last few years, pointing to a possible slowdown in demand but so far nothing of the sort has been seen.

Temperatures are holding above normal levels for the Plains with another round of extreme wind on Tuesday/Wednesday. Limited precipitation for the Plains and the forecast over the next two weeks. Meanwhile below normal precipitation remains for the Black Sea with above-normal temperatures there to persist as well.

Live and feeder cattle futures pushed higher last week again with a firm outlook expected this morning. Last week’s early decline was met with solid support for the idea of a higher weekly cash trade. Strength in deferred live cattle supported feeder cattle along with the prices drifted corn had experienced. The cash index for feeder cattle was up $9 ending at a record $282.72. The cash trade witnessed strong gains with the north $4-5 higher at $ 205-206. Live sales in the South were up $5 for the week at $202.

Box beef values last week had choice gaining $3.37/CWT and select picked up $0.52. Gains in the beef market did not keep up with cattle prices and estimated slaughter margins are negative $7. The COT report showed funds bought 2,348 cattle contracts against 4,697 contracts commercially sold. Fund length of 112,016 contracts was down 20% from the record set in late January. In feeder cattle funds bought 1304 contracts with 421 contracts bought commercially. Fund length of 30,184 contracts was a record. Renewed strength in grain early this week may cause feeder cattle to soften against live cattle.