Grains start a new month with a new price attitude.
Grain trade was firmer overnight, as first notice day has passed, and strong stoppers stepped in to acquire the renewed wheat deliveries overnight. Dreyfus stopped 635 contracts of the 1091 contracts delivered, while Merex stopped 317 contracts. SG America’s stopped all 158 Kansas City September wheat receipts. Soybeans are re-instituting weather premium on a crop under heavy stress during finishing. World rice prices continue to rise to record or near record levels.
Yesterday, India confirmed that it received record-low rainfall during August, while Australia has had a record warm winter. The drought in Argentina has also left it with crop ratings at a historically low 19% G/E. Australian Argentina has an immediate need for rain that forecasts do not show through mid-September. Meanwhile, the Indian monsoon also starts its early withdrawal by mid-September. Planting delays will start to be noted in Brazil for the upcoming soybean crop as farmers await rainfall.
Media reports confirm that Pres. Putin and Erdogan of Turkey will meet on Monday. But again Russia shows no interest in extending the Black Sea grain pact and would rather sell wheat to Turkish millers at a discount to produce flour for impoverished African nations. Meanwhile, Ukraine’s Deputy PM said that two vessels have left the port of Pivdennyi (near Odesa) through a temporary shipping corridor for civilian vessels.
This morning, the Labor Department released the Non-farm Payroll report and showed 187,000 jobs added for August, up from 170,000 estimates, but not far enough from the estimates to curtail the recovery rally in the stock market, energies, and metals. The US dollar softened this morning by $0.30 after the report to 103.28.
This morning’s weather models show no evidence of a return of near-normal rainfall into the middle of September. Rainfall will increase across the N Plains and upper Lake states after September 7, but there is no evidence that a pattern change will produce near or above-normal rainfall through mid-September. The four-week window from mid-August to mid-September will be one of the record's driest and warmest ends of the US growing season. This adverse weather is forcing crop maturity, which is reducing yields. Midwest corn harvest looks to be under full swing by September 21. Record to near-record heat will be forecast through the Midwest over the next 6-7 days, with temperatures rising into the 90s with a few lower 100s.
Live and feeder cattle futures pushed higher on Thursday, with a firm outlook anticipated this morning as outside markets are risk on. Life cattle August expired just under $178 versus last year’s expiration of $142. August feeder cattle expired at $249 compared to $182 in 2022. Negotiated cattle traded at $179 on Thursday, which was $1 higher from last week in Texas, while sales in Kansas were steady to $1 lower at $1 78-179. Nebraska was $2-3 lower at $182 live and $290-292 dressed. Moving into September, domestic beef demand slows, and prices seasonally trend lower into October. Look for further sideways congestive trade with a lower bias as short numbers meet softening demand.