Grains continue to press lower overnight from Monday's high.
Grain futures are sharply lower across the board this morning after having a mixed volatile night session. Grain futures turned broadly lower overnight as the EU’s inflation numbers reached a record 9.1% for August. This will prompt another substantial interest rate hike in September, slowing their economy. Also, the Chinese PMI for August came in at 49.4, indicating a potential contracting economy and weakening future demand. This put energy values and a host of commodities into a downward spiral.
The US dollar is higher again to near 109.00 while the Chinese Yuan has fallen to 6.90:1 US Dollar, the weakest level since late 2020 one the pandemic caused Yuan depreciation on lockdowns. Additional Covid lockdowns are again occurring in China, harming their economy. The US inflation data is highly anticipated on September 13 and will dramatically affect the Fed’s expectations for their interest rate hike near the end of September.
The September contracts went deliverable overnight, and only Chicago wheat experienced deliveries of 558 contracts. There were no deliveries for corn, soybeans, KC wheat, oats, or soy products.
The July census crush rate is out later today and is forecasted to be 180.5 Mil Bu. The active crush rate reflects strong margins they continue for US soy crushers over the summer.
The forecast now carries an extended period of dry weather across the Central US, with the Ridge/trough pattern progressing East in the 7-8 days, allowing summer warmth to return. US temps will average slightly above normal. There is some Central US rain potential in the 10-15 day time frame. The Atlantic has turned busy with three potential tropical storms, but for now, no storms appear to produce a hurricane that would impact the Gulf. The odds of a frost ending the 2022 growing season are well off into October, as near to above normal warmth is forecasted to persist well into mid-September.
Live and feeder cattle moved higher yesterday, with feeder cattle getting an extra boost from the weaker corn market. A firm start is anticipated for today’s trade. Cash trade remains light, with Nebraska reporting a trade of $1 lower than last week at $145. The southern plains are at a standstill and limited demand but should pick up at steady to weaker money by Thursday. Box beef values had choice down $3.25 while select was down $2.07. The choice/select spread has narrowed to $20.11. Box beef and cattle prices seasonally bottom after Labor Day.