Grains are higher with wheat the leader this morning.
Grain futures had wheat moving sharply higher overnight leading the charge, with corn making new monthly highs as the US dollar weakens below 100.00, prompting spec and export interest. Also, weather models are turning drier for the Canadian prairies, Northern Plains, and the NW Midwest from July 21 into early August prompting concerns.
Spot soybean oil pushed to a new monthly high since the rebound began on June 1. The Malaysian Palm Oil Board said the government kept its August crude palm oil export tax at 8% while the August reference price rose modestly.
NOPA Crush Report on Monday has analysts predicting a June soy crush of 170.57 mbu vs 177.915 mbu in May and compared to 164.677 mbu last year in the same month. This would be a record for the month of June. Soyoil stocks are expected to be 1.816 billion lbs vs 1.872 billion lbs at the end of May.
Wheat futures are being supported by the corn rally and are also lifting alongside French milling wheat, which this morning gained $3.00/MT at 232.25. Continued disappointment in the EU wheat harvest results from heat and dryness that also looks to threaten EU corn production. Also, more talk is rising about India banning rice exports, which will ultimately be friendly for wheat longer-term.
The Central US long-term extended 10-20 day forecast for the northern US stays dry/warm which is no change from Thursday. Ridge riding storms the next 7-8 days go across the Central and Southern Midwest any extreme heat confined to the S Plains and SW Midwest. Forecasts are indicating a strong high-pressure Ridge to form over Canada/North Central US in late July/August. The Plains and W Midwest/Canadian Prairie dryness will look to deepen with the biggest impact on Canadian crops which are locked in a drought.
Live and feeder cattle futures were sharply lower at one time on Thursday, a follow-through from Thursday’s extreme technically bearish close, but live cattle recovered substantially to close near unchanged while feeder cattle also mounted a bit of a recovery but still closed lower. Sharply higher corn prices overnight will put feeders on the follow-through defensive again this morning. Cash markets were quiet in all regions through Thursday with packer bids quoted at $176 in the South while show lists or offered at $180-182. Very small numbers trade in the north at $290-295, which is steady to $5 higher.
Beef cow slaughter rates are now starting to move higher, and the actual Slaughter Report showed that the beef cow kill was at a 22-week high at 71,600 head. However, it’s the dairy kill this kept total cow slaughter elevated in recent months. The dairy cow kill at 59,332 head was a 10-week high and slaughter in the last six weeks has been hundred 11% of last year. This puts it at the largest since 1986. Total cow slaughter was the most since late March and the largest late June kill going back to 1983.