Grains are higher, with wheat the leader this morning.
Grain futures are higher crosses board this morning, as drier northern Midwest weather becomes a concern with warming temperatures into early August raising crop yield risks. The COT report on Friday showed a surprising amount of corn sold at 44k contracts, but some analysts view this as potentially friendly with the funds having buying power. The overall macro mood seemed friendly last week and seemed to provide a short squeeze later in the week, even with the bearish WASDE report.
The Kremlin said they are suspending participation in the Black Sea grain export deal. This corridor deal has been extended several times and was due to expire tomorrow, and Russia has been saying for months that their conditions have not been met. They have indicated that they will return to implementing the deal as soon as their conditions are met. Also, overnight, there was an attack on the bridge between Crimea and Russia, which Russia is blaming on Ukraine. The Kremlin said this is not why they are not renewing the deal, but this would seem to add more tension.
The June NOPA crush report is out today, and analysts are looking for soy crush to be at 170.57 million bushels and for soyoil stocks to be at 1.816 billion lbs. This afternoon, Crop progress reports anticipate a one-2% gain in the G/E category as last week’s rain and near to below-normal temperatures should have benefited crops.
The EPA denied nearly all the biofuel blending exemption petitions versus mandates as the Biden Administration fights against carbon emissions.
Running guesses by the trade since the release of the WASDE yield has the corn yield at 173 BPA with soybeans at 51 BPA. Weakness in the US dollar has been helpful to commodity prices.
US weather has the N Plains and Canadian prairies, along with the northern half of the Midwest, holding in a low to well below normal rainfall pattern for the next two weeks, with temperatures set to rise after July 22. Some extreme heat forecast for late July is starting to appear as a high-pressure Ridge worked east. The Intermountain West high-pressure Ridge is forecast to amplify in progress eastward in 6-7 days which has shut down Midwest Ridge riding storm systems, as a jet stream lives northward and the humidity from the Gulf of Mexico is curtailed.
Live and feeder cattle futures had a strong rally on Friday, with live cattle posting the best recovery from last Wednesday’s technical reversal while feeder cattle struggled. Feeder cattle are anticipated to open softer this morning, with higher feed grain values overnight.
Cattle slaughter recovered to 632,000 head last week, but it was the smallest post-Independence Day holiday week slaughter since 2017. Cash markets last week in Nebraska and the IA/MN region were likely traded last week, with live sales quoted $183-186, which was steady to $3 higher. Dressed trades in and E were $3-5 higher at $293-295, with IA/MN sales steady at $290. Limited sales were quoted in the South in a wide range at $178-184.