Improved crop condition ratings soften grains overnight.
Grains are lower across the board this morning, led by soybeans, as the NASS weekly ratings showed a 2% jump for corn and soybean G/E ratings when mixed results were expected. Also, no Ukrainian/Russian port threats or attacks occurred overnight, which would’ve created another morning rally to get sold (which has been the current result).
Corn G/E ratings are 57%, while soybeans are 54%. 47% of the US corn crop is in the dough stage, while 8% has now reached the dent stage. 66% of the US soybean crop is setting pods. 11% of the spring wheat crop has been harvested. Spring wheat conditions are of concern, falling another 1% to 41% G/E.
Egypt received offers for the LH September/FH October CIF wheat that was $12/MT above last week’s tender at $262/MT for Russian wheat. The rising price of freight and wheat costs hiked the offer, with traders awaiting actual tender acceptance. The number of offers is also down from last week’s tender, while ADM offered Romanian wheat at $269/MT with Ukrainian wheat at $278.40/MT for October. The Black Sea War is having a negative impact on trade. Trade sources indicated Syria is seeking a tender of up to 200K MT of soft mill grade wheat with offers due by Aug 23rd.
Indian wheat prices continued their rise on Tuesday, with values reaching a six-month high that has traders discussing the government dropping import tariffs to zero and importing wheat on government-to-government deals. European grain traders estimate that India will import 4-9 MMT of wheat in the 23/24 crop year. US wheat values are volatile as premiums to the world market are extracted, but the trend for wheat values looks to be higher into the fall.
Buyers still look to be absent ahead of Friday’s USDA crop report, with average expectations currently showing the corn yield at 175.5 BPA in an average soybean yield of 50 one .3 BPA. Both are below trend and what is interesting is that US corn yields for the past decade have not shown much of a trend due to the challenging regional production problems we’ve had over the last five years.
The overnight EU/GFS forecast went a touch drier than prior runs, with another storm system producing .4-1.50” of rain for the Central and Eastern Midwest on Wednesday/Thursday before an extended warm/dry weather pattern unfolds. A southern branch storm system pulls through the Central and Eastern Midwest late this week. Afterward, a few afternoon T storms can pop up, but now widespread and meaningful rain will be lacking. This pulls soil moisture lower across MN and the NE portions of Iowa, a region that continues to miss meaningful weekend rains. Wide variations in central US soil moisture will produce uneven corn/soybean yields for the 23 crops.
Live and feeder cattle closed lower on Monday, with a steady weak outlook offered for Tuesday morning. Feeder cattle futures stopped short of contract highs in the two nearby months and reached new highs in the deferred months before closing lower yesterday, creating a technical reversal again. Box beef values were slightly lower at the start of the week, with choice values still above $300/CWT and select at $275. The CME cash feeder Index was down $0.64 to start the week at $245.20 after reaching a new record high last week.