The grain trade paused after yesterday's strong gains.
The overnight grain trade was mixed, which carried through into the morning. Profit-taking from yesterday's strong rally across the board stalled wheat and corn, while soybeans tried to maintain further strength. The Wednesday's Pro Farmer Crop Tours results see reasonable potential in Illinois and fair for the Western Iowa crops. The concern in the upcoming weeks is that the Pro Farmer Tour does not calculate what is going to happen to seed size and weight. Potential shallow kernel sizes lead to more seeds per bushel and lower yields. Pod weights are to be a concern.
Brazilian corn and soybean exports have been record large as their logistical capacity to load out additional tonnage is being strained for September and October. There are long wait times developing, and importers shifting their supply back to the US because of this. China has been a large buyer of Brazilian corn, with commitment data now showing eight MMTs on the books. China looks to take a record 13-15 MMTs of Brazilian corn, accounting for 26% of Brazil’s exports.
The Indian monsoon has been disappointing, with large areas seeing very limited rainfall forecasted now over the next 10 days. This lack of rain will greatly impact their production of soybeans, rice, cotton, and groundnuts. Yesterday Brazil announced the ban on exports of sugar by October 1, and already has been the exports of rice and are looking to purchase large quantities of wheat. Their wheat crop gets planted now in the next 30 days, and their monsoon season has been a bust for their sub-moisture.
The current dry and hot weather is causing premature death to corn and soybean crops this year, corn and soybeans will not have an extended fill period to produce normal seed size and weights. The 2023 growing season is going to end like it started with heat and dryness. An amplified high-pressure Ridge will produce another two days of excessive heat across the Plains/W Midwest/Delta. Temps will be record or near record high, with readings ranging from the 90s to lower 100s. Overnight lows barely drop below 77-82. A week cold front does take the edge off the E and N Midwest temperatures on the weekend, but the trend of above normal temperatures possessed next week with highs holding the mid-80s to mid-90s into the opening days of September. Rainfall is almost nonexistent through September 6.
Live cattle closed higher Wednesday, well off session highs, while feeder cattle closed negative. The negotiated fed cattle market was mostly quiet while a few pens were sold in IA/MN at $185 which was $to lower for the week and $292 dressed which was $1 lower. Elsewhere feedlots are holding out for higher prices which may cause trade to back up until Friday.
Yesterday’s August Cold Storage report showed end of July beef stocks at 420 Mil pounds, up 2% from June and the first monthly increase in seven months. But when compared to a year ago, stocks were off 18% and marked the sixth consecutive month of year-over-year declines in the fifth straight month of double-digit declines. Seasonally the beef stocks tend to increase into the fourth quarter. What is anticipated is that over the next five months, the decline will climb to 11% below year-over-year supplies. Technically, live cattle are still in a corrective mode with the potential for October cattle to decline to the 172.00-174.00 range.