Grains turn higher overnight on threatening weather forecasts.
After a lower start last night, grain prices recovered sharply as weather models bring threatening US weather to the Central US along with overnight strength from Russia against Ukraine’s Odessa grain export port. This signals Moscow’s aversion to Ukraine to export Ag products from Marine ports. It’s suspected that this strike was retaliation from Monday’s See Drone attacks on the bridge connecting Crimea to the mainland.
Crop condition reports yesterday afternoon showed corn up +2% (1-3% expected) to 57% G/E. Soybeans were up 4% (1-3% expected) to 55% G/E. Spring Wheat improved by 4% G/E vs. 47% last week. Winter Wheat showed 56% harvested vs. 46% last week. 47% of the corn crop is in pollination, with 20% of the soybeans setting pods, while 86% of spring wheat is heading. Winter wheat harvest is now beyond 50% is officially 56% completed, with harvest in Kansas at 71%.
The N Plains, Canadian Prairies, and the northern two-thirds of the Midwest hold in a below to well below normal rainfall pattern for the next two weeks, with temperatures set to rise after July 23. Extreme heat is potentially being forecasted for late July as a high-pressure Ridge progresses eastward. This high-pressure Ridge across the W Midwest will shut down rainfall chances and raise temperatures to extreme levels, with highs forecasted to reach in the 90s to lower 100s. This current Ridge is already produced record heat across Texas and Arkansas and the remainder of the Intermountain West. With sub-moisture levels low, rain is demanded every week over the next several weeks and that looks to be coming up short. Next week’s crop ratings may show slight improvements, but the following weeks will then show potential declines.
Live cattle traded mixed yesterday as feeder cattle moved sharply higher for the second day in a row on corn’s weaker values. Negotiated fed cattle markets are their typical quiet nature to start the week with a steady outlook anticipated. Box beef values were mixed with choice gaining $0.84 and select losing $0.87. Even after last week’s sharp box beef losses, both cutout values for choice and select are holding at record levels for mid-July. Estimated slaughter margins remain strong and $230 per head.
The July Cattle on Feed and Cattle Inventory Report will be released on Friday and both reports are expected to reflect small inventories.