Grain prices prepare for Tuesday's USDA crop report.
This morning’s grain trade is mixed to lower as the trade prepares for next Tuesday’s USDA crop production report. Managed money trade is short Chicago wheat and corn while they are long soybeans and soy products. This means risk adjustments into the report have been a softening in price to soybeans while corn and wheat are finding stability in minor strength.
Yield guesses are coming in, with yesterday StoneX putting out their yield guesses of 175 BPA on corn and 50.1 BPA for beans. Both are down from their August forecast. Keep in mind that StoneX uses satellite imagery and the green vegetative index. This does not capture seed size. It is the seed size that has been damaged since August 15 on the fill beans and the same thing is going on for the corn finish on seed size (kernel depth). Allendale put their guess at 171.5 on the corn with soybeans at 49.5. Next week’s crop ratings are anticipated to decline another 2-3% due to the lack of moisture this week after the temperatures cooled Tuesday.
As of this morning, the average guess for next week's Tuesday report is a corn yield of 173.5 BPA with soybeans at 50.2 BPA. Last month the USDA had corn at 175.1 while soybeans were 50.9. When August and September reports trend lower than July, October statistically is almost assured lower again. The finish for the 2023 crop is occurring under the Midwest's worst recorded weather conditions for August 15-September 15. It will come down to seed size which will show up dramatically in the October report.
Turkey has come out indicating they want to work with Russia to offer 1 MMTs of Russian wheat to Mil for flour to be sold to impoverished African nations. This implies they are backing off from their claim that they could push through the Black Sea Corridor deal. Russia has maintained nothing will occur in the corridor until European sanctions are removed. Meanwhile, Russia continues to attack the Danube River in Odessa port infrastructures, leaving grain to be hauled by truck or train to the border to be reloaded.
Central US has below-normal rainfall, while seasonal temperatures will be maintained for the next two weeks. There is no evidence of any return of normal rainfall into September 22. It’s too late for rain to have a positive difference in yield for the rest of the 2023 growing season. High temperatures range in the 70s to lower 90s this week and east of the 70s to mid-80s next week. Hurricane Lee will track Northeast and make landfall across the NE US. The storm is dangerous and will be monitored closely.
Live and feeder cattle produced strong gains on Wednesday, with a steady outlook expected today. Live cattle led the strong rally as cash sales were better-than-expected. Sales in IA/MM were quoted at $ 83, which was a dollar lower, but the sales in KS were $1 higher at $179, which kicked the trade upward. Total sales volume was light, but the rally will have feed yards looking to sell steady to $1 higher this week. Box beef values yesterday were mostly steady with choice gaining $0.14 at $315.62 while select drifted $0.16 to $289.38.