The grain trade is mixed in preparing for Monday's crop data.
Grain futures are mixed in the morning session, with the corn and bean spread pricing adjusting slightly after yesterday’s soybean price drop. Wheat prices are firm on the ongoing concern that Putin will not renew the export grain corridor in its current format in November.
Overnight the Turkish Pres. indicated he agreed with Putin that the grain is not going to the needed countries that were intended during summer negotiations for the safe grain corridor. Instead of the impoverished and needy countries in Africa/SE Asia, the wealthier Western nations were acquiring the corn. This further risks that Ukrainian farmers will be dissuaded from seeding winter grain crops until more is known in the spring.
Average estimates are now in for Monday’s USDA September crop report, and the average yield guess for corn is 172.5 BPA, with wheat at 51.5 BPA. Both yield guesses are down from the August report, with soybeans reflecting trendline potential. Also, in the September data, NASS will likely adjust corn and soybean acres based on FSA preventive plant and farm certification data. Corn acres could be downward adjusted by 300-500,000 acres, while soybeans could rise by 200-400,000 acres. Between reductions in yield and corn acres, the prospect of the corn carryout declining 300-350 Mil Bu is in the cards, and despite this morning’s price action, the trade is positioning long corn and short soybeans overall.
US weather has the Ridge/Trough pattern to end in the next 48 hours across the Central US when a more progressive pattern evolves and more seasonal temperatures. Below normal rainfall, chances continue with no frost/freeze risk into September 21. Gulf hurricanes remain nonexistent with the start of the hurricane season on September 1, but Atlantic activity has shown an increase.
The cattle trade spilled lower on Wednesday, with a steady/weaker outlook anticipated this morning. Early strength in the corn market spooked feeder cattle futures and kept them under pressure throughout the session, which was a drag to live cattle prices with late cash trade taking place. There was a trade reported in the five-area at $138-141, but there was not enough volume in any region to call a trend for the week. The cash trade is in the seasonal time window for a bottom, and futures are eagerly anticipating the tightening cattle trade but will need the cash market to start a firmer trend before breaking out to new contract highs.