Russian drones strike Ukrainian port near a NATO nation.

Grain futures opened initially higher overnight on the dry and hot Midwest forecast, but the overnight trade moved sharply higher as Russian drones destroyed warehouses on the Danube River terminals in new attacks across the river from neighbor member Romania. The port of Reni is directly across the river from EU and NATO member Romania.

The Danube River offered Ukraine a chance to export 1.5-2.0 MMTs of grain monthly. This overnight strike and ongoing attacks on Odessa and other coastal export facilities makes it clear that Russia desires to end Ukraine’s ag exports, except for the grain flows into Eastern Europe. The latter is already causing problems of depressed grain farm prices for Poland/Romania/Bulgaria/Hungary and causing countrywide bands of Ukrainian grain.

Ukraine’s President said a previously announced NATO-Ukraine Council meeting will take place on Wednesday. Russia’s FSB claims “traces of explosives” was found on a ship traveling to Russia to pick up grain, but no evidence was supplied.

This afternoon’s NASS corn and soybean ratings for the G/E category are anticipating another increase of one-2%, with spring wheat ratings holding near steady. We are now at the 50% mark in corn pollination, while soybeans will be deeply involved in pod filling going into August. Falls in condition ratings are now anticipated next week and possibly the following week.

In weather forecasts, the Canadian Prairies will endure another week of hot/dry weather before better rain returns in August. Unfortunately, it will have a diminished impact when the rains arrive, as their harvest starts in earnest by mid-August. Meanwhile, the Central US has a threatening forecast with extreme heat expected through the week peaking on Thursday/Friday with highs in the 90s to lower 100s. The combination of a dry week with the highest temperature of the growing season will dramatically increase crop stress and lower ratings into next week. Temperatures are anticipated to moderate next week to seasonal highs in the 80s to lower 90s in week two of the forecast, there is no indication of major storm fronts.

On Friday, the Bi-Annual Cattle Report showed July 1, All Cattle/Calves were down -2.7% from last year, US Beef Cows were down -2.6%, and the Calf Crop was down -1.9%. We also received the Monthly Cattle on Feed Report results, On Feed as of July 1 98.2% of last year (est. 97.7%), June Placements 102.7% (est. 98.4%), and June Marketings 95.0% (est. 95.1%).

Cattle slaughter last week was down 5000 head at 628,000 and was 35,000 head less than a year ago, which is 5%. Box beef values were mixed last week, with the choice cutout losing $3 on the week at $303, and select was just above unchanged at $277.