Old crop soybeans continued their strength, Spring Wheat tour finds disappointing yields on day two.
Grain futures saw the old crop soybean market burst higher again overnight, followed by the hard wheat contracts as the second day of the spring wheat tour found some disappointing results. Wheat futures had a volatile session, with losses developing after the 3 AM French Milling wheat. Strength temporarily returned as Russia showed some new aggression against Ukraine’s port in Odessa by sending 2 submarine-based missiles doing further damage to that port. The damage was limited to a story terminal and killed the security guard. Since it was not new infrastructure destruction, wheat retreated.
The second day of the Wheat Quality Council’s Spring Wheat and Durum tour concluded the disappointing yields compared to Tuesday. This lowers the average with the weighted average yield for those fields was estimated at 45.7 bushels per acre (bpa), 2 bushels less than Day 2 of last year's tour and about 2.5 bushels less than the previous day. Combining Day 1 and Day 2 of this year's tour, the average yield was 46.9 bpa, a decrease of 1.4 bpa from 2022. This year's two-day average for durum was 43.8 bpa, an increase from 40.2 bpa in 2022.
Ukraine’s Central Bank indicated they believe the Black Sea shipping corridor will be closed for the rest of the year. At the Russian African Summit, Putin is trying to gain more influence with African nations, claiming that Russia will replace Ukrainian grains for free.
This morning’s weekly Drought Monitor Report should show an increase in a drought area for the corn and soybean regions by 2-4% over last week.
The Central weather forecast for the US Thursday and Friday will be hot while temperatures retreat over the weekend a bit. In the next few weeks, high temps will still range 3-8° above normal during the hottest period of summer. This keeps temperatures in the upper 80s to lower 100s, with again the most extreme heat occurring now into Saturday with 90s and lower 100s. Yesterday Pierre, South Dakota, had 107°, with the Des Moines reaching 97. The 10-day rainfall GFS model reflects limited rain for the Canadian Prairies southward into the Plains, Delta, and Midwest into August 7. Storm clusters will happen over the next seven days, but where they will develop is the question. The heaviest rainfall threats will be in parts of the Upper Midwest.
A mixed day, in the end, yesterday for live cattle, with feeder cattle showing small gains after corn’s big break. A steady outlook is offered for early trade, with cattle futures waiting on this week’s cash business. Fed cattle remain untreated through Wednesday, with packers bidding in the South $175 and asking prices at $180-182. Cattle slaughtered midweek totaled 373,000 head, up 4000 from last week and 1000 head more than a year ago. Box beef was mixed on Wednesday but holding onto light gains for the week.
The choice cutout is down $40 from the mid-June high but stabilized last week. Seasonally, the beef market seasonally forges the low this week, then rallies into the end of August ahead of the Labor Day holiday. If rising beef values can occur, it will limit the downside in the cash cattle market. October cattle have trend and moving average support in the $178.00 range.