Grain prices give up overnight gains.
Grain futures are mostly lower this morning after a firm/higher start last night on the concerning US Central weather pattern that will bring a further decline in corn and soybean good/excellent ratings this afternoon. Profit-taking hit overnight as the weak Brazilian corn and soybean FOB offers pulled values lower with the extreme spread difference now between US and Brazilian-origin soybean/corn. The USDA Stocks/Seeding report is out on Friday, June 30, which leaves nine trading days after today for estimates to come in.
Over the three-day weekend, Algeria purchased an estimated 580/620,000 MTs of wheat for August shipment at prices that range from $261-264.50/MT CIF. It’s anticipated that the supplier is likely Russia and has allowed export prices to rise slightly for the first time in a year. It’s possible a bottom and Russian wheat values are developing, but their harvest is still 2-3 weeks off.
China has cut to key lending benchmarks to improve its sagging GDP levels and consumer demand. The Peoples Bank of China cut its one- and five-year loan rate by 10 basis points to 3.55% and 4.2%, respectively. China’s post-Covid economic recovery has languished with additional economic stimulus expected to help China’s economy recover. It’s anticipated that China could possibly import 101-103 MMTs of soybeans in the 2022/2023 export year which is above the USDA’s expectations.
Crop condition reports out this afternoon anticipate the good/excellent ratings to decline by 2-3% for both corn and soybeans amid the dryness in E IA, IL, MN, MI, and IN. Corn pollination starts in 20-25 days for some producers, and the rain in the models for June 27 forward needs to verify to keep yield models from collapsing after July 4, which is what happened in 2012.
Live cattle prices traded mixed last week, with feeder cattle futures lower on the exceptional rally in feed grains. Negotiated fed cattle prices were mostly lower last week, with live sales ranging from $186-190, which was steady to $4 lower, and dressed trades were steady to $4 lower at $296-300. Sales in IA/MN were down $2@$188, with sales in the southern plains $2-3 lower at $182.
This Thursday is the June Livestock Slaughter report, with Friday afternoon having the COF and Cold Storage report. These reports take on more significance now as supplies tighten. Seasonally this is the time of year when beef price values correct with August cattle having major support in the $166-169 range.