Soybeans lead overnight strength.

Grain futures turned higher overnight after a rough start, with soybeans leaving sharp gains as the market starts to look towards Wednesday’s WASDE crop report that will have the reduced 4 million acres calculated and what the USDA may use for yields. December corn is back to challenging five died 00 while the wheat market traded mixed.

Soybean oil has turned higher even though deliveries of 860 contracts have been drastically reduced. 543 contracts of soil were tendered against the July futures, with ADM putting out most of the supply, while Cargill was the stopper. Only 53 contracts of corn were tendered, with ADM stopping them, and 55 contracts of KC wheat, along with one contract of oats were tendered.

August Malaysian palm oil gained 86 ringgits to 3,900 RM/MT. June Malaysian palm oil stocks were reported much lower than expected at 1.72 MMTs, which rose just one .9%, while July export demand has been strong. With the Canadian drought, canola stocks look to be drawn down as the outlook for world veg oil prices keeps improving.
Russia is saying there is nothing new to discuss regarding extending the Black Sea grain corridor set to expire next week and no meeting is scheduled with Turkey’s President about continuation.

This afternoon’s crop condition ratings will be released, and expectations are in a large range of 1-4% improvements in the GD/EX category. Mixed growing conditions amid regional droughts where rain has still not arrived have stunted corn and soybean crops. Conditions are wildly variable, with 70% of the corn belt having received good moisture.

Forecast models are drier across the Northern Plains and the NW Midwest. Models are struggling with the timing of Ridge riding storm systems and the location/amounts of rain. Rain is forecasted across IA/northern IL late Tuesday/Wednesday. In general, near to slightly below normal rainfall is forecast for the Midwest, with cool temps for the next 7-8 days followed by a warming trend after July 18 at the end of the month. Worry is building regarding the return of heat/dryness in the last 10 days of July and into the first half of August.

Cattle futures put in a good recovery last week, finishing just below unchanged but near their weekly highs. The firm outlook is offered for an early start, with negotiated cash trade likely not to occur until Wednesday. Last week sales in the South were $1 lower at $1 78, and the Kansas trade was steady at $178. Cattle slaughter last week fell to 509,000 head for the Independence Day holiday week, which was the smallest kill since 2016. Despite the late production, choice cutout values fell by $11, with the rib primal down $53 for the week as domestic demand collapsed. Meanwhile, the cash market remains strong on tight supplies as August cattle continues to chip away at its discounts to the cash market.