Wheat leads the overnight recovery rally.

Grain futures had another volatile night session that experienced heavy weakness in the early morning hours, as the US dollar pushed to another new multi-decade hide of 114.75. The UK announced it will need to do some quantitative easing projects due to its seizing bond markets. This weakness found renewed buying interest show up in the wheat market, which eventually firmed up corn and soybeans recovering back to over $14.00.

With the NASS September’s Stocks and Final Small Grains Report on Friday, short covering should develop with end-user procurement picking up ahead of what is historically a crop report that offers many surprises. A bearish surprise will be difficult to surmise, with such premiums being paid at the end of the old crop season even with new crop rolling in, can only be answered by the fact the pipeline was nearly empty in the USDA is too high on old crop stocks. The USDA can lower old crop stocks, which will transfer into the new crop balance sheets but keep new crop balance sheets comfortable by cutting forward exports by a like amount to keep everything looking okay.

Russia announced the results of its E Ukraine referendum, and it is reported that 99% of respondents claim they want to annex Russia. This is not a surprise, and the UN and the rest of the world condemn the referendum as being illegal. Comments from Putin imply that by October 4, they will have the legal documentation with the Russian parliament to accept the annexation and make it part of Russia. What is unknown now is if Ukraine will mount offensives and push ahead to fire upon what is now Mother Russia and bring on the wrath of defensive posture rather than what was a Special Military Operation.

The Central US weather forecasts maintain limited rainfall for the next two weeks, which is suitable for the rapidly advancing harvest. Still, it’s become worrisome now for exporters as the Mississippi River levels are declining further. Barges are already cutting their loads and drafts to allow navigation. The worsening Mississippi River condition is a concern amid the US soybean export program that is ahead. There is no sign of harvest-delaying rains through October 9 despite hurricane Ian moving through the East Coast. Warm weather returns in the 5-15 day period as the US harvest speeds ahead. Meanwhile, the Plains and western US drought worsens amid below-normal rainfall trends.

Yesterday the live and feeder cattle markets continued lower with the outside market influence but found stability late in the session to close mixed on the live cattle. Cash markets were thinly traded in the southern plains on moderate demand, with some early sales quoted at $143. Markets in Nebraska and the Western Midwest were quiet on limited demand. Fed carcass premiums have pushed to extreme levels, with prime grading carcasses selling for nearly $32 over choice last week, the most since December and $9 higher than a year ago. Box beef seasonally finds a low now through October 10, with the December and February live cattle contracts are not carrying much premium to the current cash market, and should find renewed buying interest. Numbers will tighten up substantially even with the recession.