Overnight soybeans sharply lower while wheat maintains gains.

Grain futures had seen a sharply divided night session trade as wheat rallied on the return of Black Sea tensions, while soybeans dropped sharply as weekend rainfall was widespread across the belt with 1.5-3.00” of rain. Black Sea weekend action continued with a Ukrainian drone strike on a Russian tanker following attacks on the Kerch bridge.

Exporters are now reporting their having struggles securing freight insurance as the war spreads through large areas of the Black Sea region with Marine drone strikes. Ocean drones have the capability to strike ships as far as 500 miles away from Ukraine, with military strikes now finding their way toward Russian grain ports over the weekend. Wheat looks to gain over corn and soybean futures amid elevated tensions.

Ukraine attacked a Russian oil tanker near the Kerch Bridge on Friday and sent missiles at the important Kirsch land bridge early Sunday. The use of rain drones against Russian commercial shipping shows the willingness of Ukraine to extend the war into the Black Sea with seven key Russian ports targeted for future attacks. This new seaborne war has the ocean freight insurance in fast retreat, slowing Russian grain exports. Already grain tonnage moving through the Azov Sea are down 40%, with the lineup in decline.

Egypt is stepping up wheat purchases after having been absent for some time and taking advantage of the sharp decline in values. Egypt is tendering wheat for the last half of September and the first half of October. Wheat importers will likely ask for optional origin supplies, with Russia being the cheapest option. The use of rain drones is changing shipping risks. Also, world cash rice prices have rallied 14% since India decided to ban non-basmati rice exports to calm their domestic market. India’s monsoon is forecasted to produce limited rain for their soy, groundnut, cotton, and rice areas for the next two weeks. Seasonally, the monsoon withdraws in September, but it appears to be exiting 4-6 weeks earlier this year.

This afternoon’s crop ratings are anticipated to show a loss or gain of 1% in the G/E categories, this makes it difficult for WASDE data this Friday not to show some form of declining yield potential versus their July estimates.

Over the weekend, .3-2.50” of rainfall fell across a broad area of the Central US, aiding row crops. Key dry areas like Minnesota, Iowa, and central Illinois received rain, but additional totals will be needed due to the depleted soil moisture following weeks of drought. The 10-day forecast offers two additional episodes of Ridge riding storms across the Midwest/Delta, which will produce near normal rains for the period of .4-2.00”. No extreme Midwest heat will be noted in the next 10 days, with highs ranging from the upper 70s to the lower 90s. Midwest crop conditions should stabilize with most improvement next week due to the weekend rainfall. Canadian Prairies will also witness rains of .4-1.50” this week as harvest gets underway.

Live and feeder cattle ended up higher at the end of last week, following Friday’s strong lift. A steady outlook is offered for this morning. Cash trade again last week was light until late week with higher trends in all regions. Live sales in KS and the southern plains were quoted at $188-190, which was $2-4 higher, and matched the gains in the IA/MN regions for the same pricing. It was reported by IA, KS, and NE livestock producers that hundreds of cattle perished from the late July heat wave, with live weights as low as 700 lbs. being affected.

Cattle slaughter last week was lower, with the kill at 613,000 head, down 6000 for the week and 35,000 less than a year ago. Box beef prices were slightly lower for the week, with the choice cutout value down $0.21, and select was lower by $1.06. However, tight supplies hold both record price values for early August. Feeder cattle went out last week near contract highs for the spot and making new contract highs in deferred. Live cattle look to be aiming for record prices this week, with the seasonal trends higher for the next 2-3 weeks. Fed marketings are bunching up due to the slower slaughter rates over the past month.