Russian bombing in Ukraine intensifies.

Grain futures are sharply higher this morning as Russia has mounted a counteroffensive in retaliation for Ukraine’s attack and destruction of the Kerch bridge that connects Russia/Crimea. This has speculation growing that the Safe Grain Corridor will not be extended, while the UN is voicing confidence that they can broker the deal for the corridor to be extended or even expanded. Soybean prices firmed initially out of the opening of the night session as China has returned from their Harvest Festival week off and was aggressively buying the recent break in beans.

The barge back up on the lower Mississippi, which had grown to 2000 barges with tugs, started to clear on Sunday as two river sections were reopened. The ability to move traffic quickly helped calm concerns that the US export loading would be adversely impacted. However, historically high barge rates continue to pressure spot corn/soybean basis, which is indicating to farmers to move their sales into the January/February timeframe.

This Wednesday at 11:00 a.m. is the USDA/WASDE October crop report, with current estimates showing a 1-bushel decline for corn and near steady on beans. The poor finish in September on the yield forecasts may offer a bigger surprise if the USDA puts corn yield near 170 BPA and soybeans at 50 BPA. Then it will be a matter of how much they lower exports to keep carryouts tolerable.

It’s anticipated that the soybean harvest will get close to 50% in this afternoon’s crop progress data. With most estimates of 48%, while corn could be in the 31-34% range for progress. Below-normal rainfall and drier weather over the past week are helping speed along the 2022 harvest.

Warm and dry weather is maintained through Tuesday, while showers will be sporadic for the NC Midwest Tuesday/Wednesday with rainfall totals of .1-.6”, with the best rain across Missouri. The showers will then be pushing into the E Midwest on Thursday with likely rainfall totals. Otherwise, a mostly dry weather pattern dominates the Central US to keep the harvest active.

Live cattle traded mostly higher throughout last week, supported by the firming cash market and the oversold technical nature of the futures. Feeder cattle had been holding support last week at $174-175, with the large premiums to the cash index now disappearing. Future recovery needs to be led by the strength in deferred live cattle pricing or a break in corn prices, with the latter not so likely currently. Longer-term declining fed cattle supplies will be bullish, but feedlot inventories are near record great, and beef demand appears to be struggling. This keeps the cattle trade in a choppy formation while still reflecting overall uptrends on the charts.