Will rain make some grain?

Grain futures are extending their sharp losses for the second day in a row, as the EU/Canadian weather models have gone wetter in their 10-day Midwest rain forecasts. The driest areas will still likely show ongoing deficits despite the rain. Rain this weekend has a Ridge riding system producing rain across IA and into WC IL with rain totals of .1-.7”. This is causing traders to be cautious ahead of the weekend after such a substantial leap in price, while the extended forecasts are less certain among the prospects of showers across Iowa on Sunday.

Grain futures are experiencing their first big correction since taking off at the beginning of June and rightfully backpedaling with the better chances of rain that we have seen in a long time inside the five-day forecast. The reality is, we’re still not seeing a major pattern change, and many are wondering if this is just an interlude in the drought that continues into July. Right now, the street is anticipating our potential national corn yield is running somewhere in the 170-175 BPA price range, with soybeans just under 50 BPA, with the ability to recover much greater in the next two weeks than corn if a pattern change is coming.

Three Chinese biofuel exporters have lost their certification from the Int’l Sustainability and Carbon Certification after the source of their waste products could not be identified to be from Malaysia or Indonesia.

France AgriMer estimates corn 85% G/E, down -1% from last week. Soft wheat was cut from 85% G/E to 83%. Spring and winter barley also were downgraded. Meanwhile, the Buenos Aires Grain Exchange lowered their 22/23 Argentine output estimate by another 2 MMT to 34.0 MMT.

Live and feeder cattle closed higher yesterday with another firm outlook anticipated day, especially for feeders with sharply lower feed grain pricing again this morning. Cash markets Thursday was thinly traded but the lower weekly price trend continued. Small numbers sold in the southern plains and in Kansas at $180, which was off $2 from last week and steady with early week sales. Dressed sales in Nebraska were quoted at $290, off $6 from a week ago, and also steady with early week business.

Yesterday’s June Livestock Slaughter report showed the May cattle slaughter was up 1% from last year and 12% larger than April, but with one-two additional working days included. On a per-day basis, the May kill was down 4% from a year ago and just 1% larger than April. The Fed cattle kill was 102% of last year which is right at expectations for today’s COF report. Today they are also expecting placements of 101.7% of a year ago, and the on-feed number is expected to come in at 96.6% of a year ago.