Grains slightly rebound after USDA report selling.

With 9 days remaining to finalize a deal on the Ukrainian grain corridor, there is a meeting in Geneva, Switzerland next week to discuss details of the deal. Russia demands grain to flow to countries in need and that restrictions on their own grain be lifted.

Yesterdays USDA crop report came in as expected with cuts in Argentine production. Brazil’s crop remained mostly unchanged and is reported to be record large with the local elevators claiming they are full to the brim with grain. The Brazilian harvest being record large and Argentine harvest being record low is something the market is having trouble with juggling around as to what direction it should push. Argentina government will only allow a 20MMT export cap this year compared to the 38MMT export cap last year. Ukraine export shortfall potential with the corridor deal will also put their corn exports at risk. This will all make other countries turn to the Us and Brazil for their corn and soy needs.

Argentina weather forecast still remains dry until mid-next week with temps ranging from 85-100 degrees. The talk of more production cuts is lingering by means of field abandonment. Talks are that they could see production losses of 50%. Brazil’s forecast continues to show normal rainfall in the northern region while the southern is going to need some rain soon or else the newly planted corn crop could disappoint.

Feeder cattle futures scored new highs across the board yesterday after the release of the crop report. Trade is expected to be steady today with fed cattle trade estimated to be $1-2 higher. The USDA raised price projections to align with the CME’s projections as well as the USDA raising US beef production for the first 3 quarters of 2023.