The grain trade consolidates after yesterday's losses.
This morning’s trade is seeing a small Turn-around Tuesday develop in wheat and corn, but overnight strength is drifting. Soybeans have seen a considerable price advance over the past five sessions due to the forecast of hot/dry Central US weather this week, where yield reduction risk stays real. A retreat of the extreme heat this week occurs over the weekend and early next week, which has produced heavy profit taking from the advance. For now, there is no indication of any return to cool/wet weather, and its likely corrections will not be lasting in soybeans on price.
Yesterday completed the first day of the Pro Farmer Crop tour, and as expected, they would uncover yields above last year, and this expectation was confirmed. While corn yields are estimated at 183.9 BPA versus 174.2 last year, with a five-year average of 175.6. Soybean pod counts were 1254 per square, with last year being 1131 pods in the five-year average at 1161 pods.
South Dakota corn yields 157 BPA versus 118.4 last year in the five-year average of 149.7. Soybean pod counts were 1013 pods in a square against 871 pods last year in the five-year average of 1039 pods. Today’s leg of the Pro Farmer Tour pushes into Indiana and W Iowa/Minnesota. Here is where corn yields and soybean pod counts can fall below last year as a move into the heart of the Midwest in production states.
Egypt’s GASC is in for another tender again for October/November with Russian and Eastern European wheat expected to compete for the demand. US SRW Gulf basis jumped $0.50/Bu late yesterday as the US cannot afford to see its export profile jump on tightening domestic supplies of protein wheat.
Yesterday’s crop condition reports showed corn conditions -1% to 58% G/E and soybeans steady at 59% G/E. Spring wheat conditions -4% to 38% G/E and the crop 39% harvested. Winter wheat harvest is 96% complete. Next week’s ratings are anticipating a sharp decline for corn and soybeans.
This week remains with an extended period of hot/dry weather that will impact Central US in this continues into September. The GFS/EU and the candy models offer limited rain into September 5. The EU model has backed away from forecasting rain from the Central Plains/Missouri, with tropical storm activity now noted across the southern periphery of the high-pressure Ridge. It appears the growing season will and like it started, with extended periods of hot and dry weather. After cooling early next week, the 11-15 day model returns temperatures in the 80s to mid-90s with limited rainfall during that same window. This is not good end to the growing season for filling.
Live and feeder cattle trade was higher on Monday with a steady outlook offered for this morning. Contracts gapped higher on last Friday’s COF report's July placement report, with feed grain prices stumbling throughout the session. Feed yards are looking to add a few dollars to their sales this week while Packers will want to hold onto the recovered margins. Those margins are estimated last week to have jumped $60/head to a five-week high of $166 as the beef market rally in the negotiated cattle trade was down $1. Yesterday’s box beef had choice down $0.55 while select was lower by $1.03. Box beef market seasonally peaks now as Labor Day procurement is satisfied and drifts into September.