Ukrainian port war escalation and threatening weather boosted grains sharply higher overnight.

Grain futures raced sharply higher overnight on the escalating of Black Sea risks occurring with more bombing in southern Ukraine with reports of more damage done to the ports in Odessa and Chonomorsk. Adding to the fact that vessel insurers will now pause all-new coverage challenges Black Sea grain flows. Also, weather models are agreeing on extreme US heat next week as grain yield potential is on the sharp decline.

To add difficulties to Ukraine in maintaining exports of what is a smaller crop than last year, Hungary’s Ag Minister is leading a group of five central EU nations asking the EU Commission to extend its ban on Ukraine grain imports beyond Sept 15th to avoid major market displacements.

The EU operational models overnight trended much warmer across the Central Plains and Western Midwest, putting the EU in better alignment with the alarmingly hot GFS in the 6-10 day period. The GFS is still by far the warmest of the major forecasting models, with max temps in KS, NE, MO, IA, and IL pegged at 110-116° next Wednesday-Sunday. This is very probably overdone, but the EU this a.m. features highs between 96-102 across the principal Midwest, with spikes of 104-105 advertised in KS and pockets of northern IL next Thursday-Friday.

Also alarming is that this period of extreme heat has been extended into the July 31-August 1 window, with crops across large sections of the Central Plains and Upper Midwest unable to tolerate multiple days of 100° given the abnormal absence of subsoil moisture. The US forecast is threatening corn and soybean production, with major downgrades on the way over the next few weeks if these forecasts verify.

Live and feeder cattle futures recovered late on Tuesday, recovering their losses to start the week, while feeder cattle futures moved lower. Feeder cattle futures are likely set to open considerably lower again today, given the sharp gains in feed grains overnight. Negotiated fed cattle markets are still not trading as of Tuesday, with the outlook midweek being firm on limited volume of business done last week. Box beef values were mixed on Tuesday, with choice off $2.10 and select gaining $0.87.

The Monthly Cattle on Feed Report on Friday with analysts estimating On Feed as of July 1 98% of last year, June Placements 98%, and June Marketings 95%. If these numbers are realized to be the lowest June placement rate in seven years and the largest year-over-your decline in the July amatory since 2015. Cash and futures markets have converged with the rally on Tuesday on the futures market, which is helping price higher cash trade for the week.