Soybeans breach $14.00 overnight on poor finishing weather.
The grain trade opened higher overnight on concerning heat that returns Labor Day weekend and extends through September 12. Wheat futures stumbled as they typically do, being the weak leg of the grain trade that gets shorted while buying soybeans. Soybeans breached $14.00 for the first time since falling back under that value on July 27.
The Pro Farmer Crop tour put the 2023 corn yield at 172 BPA, with soybeans at 49.7 BPA. With the impending heat, the talk is a corn yield that could fall under 170 BPA while soybeans will produce no better than last year’s 49.5 BPA crop and could potentially drift to 48 BPA. This potentially puts corn ending stocks under 2 Bil Bu, with soybeans sliding under 200 Mil Bu.
According to media reports, a vessel carrying steel bound for Africa left Ukraine’s Odesa port and sailed via a “humanitarian corridor” yesterday. The ship had been blocked in the port since Feb. 20, 2022. A Russian official said that the vessel's passage had nothing to do with extending the UN’s Black Sea grain deal. It’s rumored that Putin and Turkey’s President Erdogan will meet on September 4 with the agenda to open the Black Sea corridor, which is unlikely without sanctions being lifted by NATO members that were put in place over last year.
Indian grain and rice prices continued their rise despite government efforts to slow or halt food inflation. India just had the lowest monsoon rain season in eight years, keeping Indian food grain prices and bullish trends. India has announced a 20% export tax on parboiled rice and set a floor price for basmati rice at $1,200/MT on Sunday.
The heat is returning for the holiday weekend and will last for most of next week. There have been reports of premature drooping corn ears and sudden death of corn and soy plants from scorching temps. This will have corn and soybean yields on the retreat, placing greater importance on the South American 2023/24 growing season. An extended period of hot/dry weather will impact Central US with limited rainfall into September 12. An amplified high-pressure Ridge will progress eastward and produce a new round of heat across the Plains/Midwest and Delta from Friday onward. High temps will develop in the 90s again to lower 100s. The heat looks to last into the 10-15 day period, producing one of the warmest and driest finishes for the Midwest growing year on record.
Live and feeder cattle did close higher last week after a midweek correction, with a steady outlook for today’s opening. Last week’s fed cattle markets were firm, with live trade in the South steady at $178-179, while live trade in the North was steady at $185-186. Dressed trade was $292-295. Cattle slaughter rose to a six-week high last week at 626,000 head but was still 7.7% less than a year ago. Despite the uptick in production, box beef values were higher last week. The choice value gained $1.79/CWT and select rose $4.31. Slaughter margins are estimated at $42/head to $207, with the bi-product value adding another $133 to the gross revenue. Live cattle continue to consolidate, with September being a weak month, as beef demand softens as school gets underway.