Grains continue to firm into Friday's NASS data.
Grain futures again overnight were mixed to weaker but firmed in the morning hours as the US dollar weakened below 105.00, and weather models started to diminish some of the rain expected for early next week in the W Midwest. Also, positioning heading into Friday’s NASS crop production has some leaning a little weaker on yields that may be reported, as last year in August, with a crop rating better than this week’s current ratings produced a yield of 174.9 BPA for corn and bean yields of 50.0 BPA. If the USDA put out an equivalent number, this would be very friendly in the current carryout dynamics.
The European corn production is now finding more reporting stats of the decline due to their ongoing drought. Strategy Grains (a private EU consultancy) put out an EU corn crop estimate of 55 MMTs, a big drop of 10 MMTs. Remember that last month’s USDA shows their crop at 68 MMTs. The world balance sheet is about to get adjusted heavily for corn. There are still numerous estimates that suggest the corn crop is as low as 51-53 MMTs. This will ultimately create imports of corn for the EU out of the US with the recent relaxing of GMO standards. This will create a further reduction of the US corn carryout, as there is no reflection of exports to Europe in the current balance sheet workup.
The Plains and W Midwest remain hot/dry into August 16, as a high-pressure Ridge holds across CO/KS/NB for another 5-6 days before retrograding Weston producing a trough pattern change. The western US Ridge returns rain chances for the Plains/upper Midwest next Tuesday/Thursday on Ridge riding storms. Cooler temps will occur across Eastern and far Northern US producing areas while there is a chance for improved rain forecasts for the Plains and W Midwest. Many of these rains are coming too late to have much impact on corn but will aid the soybean crop.
Cattle futures enjoyed a strong session on Wednesday while the cash trade had seen some action, with cattle in Nebraska trading at $146 on a live basis which was four dollars higher for the week. The dressed trade was $1-2 higher at $229. Live sales in IA/MN were $2 higher for the week at $146, while the cattle market in the South remained quiet. A steady/higher trend is expected for the rest of this week’s trend. Box beef values were lower, with choice down $1.50 and select slipping $0.62. Box beef compared to a year ago is lower by $59, but the choice value is still the second highest on record.