The overnight trade features more short covering ahead of Friday's WASDE crop report.

The grain trade was firmer overnight, with soybeans leading the strength ahead of Friday’s WASDE August crop report out at 11:00 a.m. CT. There is statistical uncertainty surrounding the data and FSA Farm Participation reports that find open interest continuing to decline as traders moved to the sideline ahead of the report. Analysts estimate a reduction in corn yield estimate to 175.5 bpa from 177.5 bpa and beans to 51.2 bpa from 52.0 bpa.

The Ukraine Navy announces offering temporary trade corridors in and out of their three ports of Chornomorsk, Odessa and Pivdennyi for any commercial vessel which is willing to navigate waters in a war zone. It is doubtful that any vessel owners will take such a risk with insurance unavailable for transit. Russia is claiming that commercial vessels heading into a Ukraine port are considered war targets on the fear that they have military hardware in transit. The last commercial ship to navigate out of Ukrainian ports was back on July 16 as Russia ended the Black Sea corridor deal. For the past four days, the Russian war against Ukraine has been confined to the land as Ukraine has not used Marine drones to attack Russian ports or vessels.

Part of the overnight friendly news for the grain trade was that a private EU analytical firm, Strategy Grains, released an estimate that the 2023 EU all-grain crop will be less than last year. Strategy Grain estimated the 23 total EU grain production at 264.4 MMTs, which is down from the July estimate of 268 MMTs and last year’s production of 265.2 MMTs. The smaller 23 harvest forecast is a surprise since the EU suffered through one of the worst droughts on record last summer amid sweltering heat. The 23 EU soft wheat crop forecast is 124.7 MMTs against 125.3 MMT drought-reduced crop last year. Smaller EU grain harvest will need another year of your large imports of Ukraine corn.

The Indian monsoon shows no sign of recovering, with limited rain for the key soybean, groundnut, rice, and cotton areas for another two weeks if the monsoon is unable to recover in late August/early September, the loss of summer row crop supplies will be highly important. India captures and uses summer monsoon rain to irrigate winter wheat seedlings in the autumn. The release of 2.5 MMTs of government reserve rice and five MMTs of government reserve wheat has had a limited bearish impact for now on Indian grain values.

Midwest weather forecast for the weekend has 2 Ridge riding storms forecasted to produce .3-1.25” of rain. The heaviest rain will fall across the Central Plains and the southern Midwest, with more modest amounts farther north. A dry period arrives next week with increasing temperatures as a South-Central US high-pressure Ridge amplifies east and north. With the heat lasting into the 10-14 day period. Any storms that develop will be centered across the Lake states.

Live and feeder cattle recovered on Wednesday, ending with strong gains. Cash markets remain untreated, with better interest expected later today. Box beef prices also reflect strong gains of $1.00 or better. June trade data is out and reflects that the average retail beef price was 3% higher than a year ago, and domestic per capita disappearance was down 2%, which was near the expected change. After falling sharply, for most of 2022 and early 2023, demand stabilized in May and June despite the record prices. Stable demand and tight supplies have resulted in record cattle prices this summer. The live cattle market has stalled out, and recent strength continues to get sold on the cattle charts as they recover but do not exceed recent price highs.