Grains continue to be price explosive.

For the fifth morning this week, grains are sharply higher as a 360° attitude occurred over the weekend after six months of selling. 1. The Ukrainian Safe Grain Corridor will not perform to the extreme expectations that the world desired, 2. The weather has gone from hoped optimal rains to threatening dry and hot temperatures, along with 3. the recession fears are giving away to the US dollar that is set to close lower for the second week in a row, confirming a top.

Today the panic continues to be all about the Central US weather forecast and the ongoing European drought that casts heat and dryness into mid-August. Weather premium is exploding back in the marketplace as end users panic to buy as they’ve missed what was likely harvest low pricing late last week on the culmination of bearish news. Also, the Black Sea Grain Deal is put into doubt as to whether it will produce the 5 MMTs of grain a month that was hoped for as Russia continues to complain that NATO has not done enough to help its own exports with the financial restrictions that are causing issues for finance/insurance.

The UN continues to indicate that details for the safe passage of Ukraine grain out of the three nominated ports are still being worked out. You would have expected that most of these details would’ve been completed before last Friday’s pact was signed. Both sides are trying to work out safe shipping channels that do not include mine sweeping, which would take months. This is creating nearby demand for remaining old crop supplies, as the new crop is still six weeks away, and it takes time to get to export channels. Today was first notice day for August grain contracts, and there were no deliveries for soybeans, soy oil, or soymeal.

The next two weeks are critical for the filling stage of French/EU corn, and ratings continue to decline. The USDA had the E the European corn crop at 68 MMTs on July 12, with many analysts now suggesting the corn crop at best maybe 52 MMTs. This is down 20% from the USDA’s July 12 expectations.

Today is all about the weather, and extreme heat is anticipated for the Plains/Midwest with a drying trend for NW Midwest into mid-August. Forecast models agree and are consistent with prior day solutions. The GFS/EU models both are equally hot/dry for the Plains and W Midwest into August 13, with limited rainfall for Iowa, Nebraska, South Dakota, and most of Missouri. The dryness includes the Central Plains starting after this weekend.

Live cattle futures are called steady lower this morning, with obviously feeder cattle being lower to sharply lower again on the exploding feed values.

Yesterday’s cash cattle trade reflected a weaker cash tone and concerns about consumer demand. Cash trade stayed lower on the week at $135 in the South, while the northern trade was $2 lower from last week at $225. Midday carcass values were soft, with choice box beef lower by $0.22 as select declined to $1.00. Yesterday’s actual slaughter report had data for the week ending July 16 confirming that fed cattle carcass weights have likely bottomed in the first half of June. Steer weights at 889 pounds were 1 pound heavier than a year ago and 11 pounds over the five-year average. The average heifer carcass scaled at 815 pounds, up 2 pounds from last year and 9 pounds over the five-year average. Typically carcass weights steadily increase in December or January.