Pro Farmer Tour results had corn higher overnight.
Corn futures opened higher overnight on the friendly results from the Pro Farmer Crop Tour producing a yield of 168.1 BPA, while soybeans started the session lower and stayed that way for the bulk of the night. The soybean crop yield from the tour produced a yield of 51.7 BPA, which will pave the way for a USDA yield likely at a record 52 BPA or more. The Pro Farmer crop tour yield based on prior year analogies could have the USDA down to 174 BPA in the September crop report.
The difficulty for the grain markets to sustain strength last night came from the continued risk-off selling from the equity futures declining further overnight after the US dollar hit 20 year high. Friday’s US Central Bank stance after the summit is that they will maintain its fight against inflation which will be lengthy, prompting heavy selling in the indexes on Friday that carried into the overnight. Crude oil overcame weakness and is firmer this morning by $1.28 a barrel to 94.32.
The Chinese drought is having an impact on their rice production, while wheat may also be of importing needs. For now, China does hold large supplies of wheat and rice in its reserve stocks, and the question is whether they choose to extend those. Corn and soybean production is to the north and out of the drought region of China.
Crop ratings are anticipated to see a steady to 1% decline from the GD/EX crop ratings this afternoon. The decline is based on seasonal considerations that occur this time of year as the crop matures.
There is no indication of any crop-threatening cold weather to cause a premature end of the 2022 growing season on any of the models. All the Atlantic tropical storm systems are looking to produce changeable weather for the US. A Ridge/trough pattern holds across North America for the next week before the flow becomes more zonal. A below-normal rain trend starts weather for the Central US, with temperatures averaging slightly above normal. The Atlantic has turned busy with tropical storms, but for now, none of the storms appear to produce a hurricane that would impact 2022 Gulf crops.
The cattle and feeder cattle trade was mostly lower last week, with a steady soft opening anticipated for this morning. Box beef values last week were mixed with choice down $152 while select gained $0.82. The choice/select spread fell $$2.342 24 choice premium. Estimated slaughter margins last week fell $10/head to $238. This is the lowest since early May and more than $700/head less than last year. For now, cattle and beef prices typically trend lower into early September, which may be a drag on the futures trade. Major support does arrive for October live cattle in the $140-142 range, while December cattle have like support in the $147-148 range.