Wheat prices decline sharply on Ukraine wheat movement.
Corn and soybean pricing gave up a firm start Wednesday night and were drug lower by wheat prices which pressed new 2022 lows for Chicago wheat with active vessel movement into and out of Ukraine to load new supplies of wheat. Russian export tax remains a problem for Russian farmers that have rising domestic wheat surpluses. Russia’s reluctant to reduce the tax as it needs the revenues for the war. Port/data puts Russian wheat exports for the first half of August at 1.9 MMTs, which implies up to 3.5 MMTs for August. Russia needs to see an aggressive export pace at record levels to validate the annual forecast of 40 MMTs from September into December.
Outside markets today are mixed with equity and energy markets firming while Malaysian palm oil futures are down 122 ringgits and Paris milling wheat along with their corn is lower by 20-$0.30 a bushel equivalent. Again, the US dollar is firm today and getting ready to crowd 107.00 to the upside. Grain prices have retreated aggressively from last week’s Midsummer bounce, with seasonal tendencies to decline into early September.
European weather forecasts continue to trim projected rainfall for France and Germany, with the latest guidance offering only regional stabilization for moisture in the next 10 days. France and Germany produce 50% of European rapeseed output, and rain is required immediately to reduce further production losses.
US weather models maintain a return of soil moisture across the Central Plains W Midwest and the near term while the 6-10 day forecast trends slightly warmer. No rain is expected for Kansas in the next 10 days. The GFS has eliminated Gulf tropical storm activity in late August, which pushes any big moisture fronts out of the picture.
Live cattle pressed higher yesterday, with October and December challenging recent highs while the 2023 live cattle contract moved on the new contract highs. The cash cattle trade Wednesday was quoted at $1 higher in the southern plains at $141, while sales in IA/MN were steady at $147. Similar trends are expected to continue into late week. The August cattle on feed report is out this Friday the average estimates show marketing’s at 97% of last year, placements at 98.5%, and feedlot inventories at 101%. If realized, this would be the fourth consecutive month placements were below last year.