Wheat prices drifted overnight after last week's lift.

Prices are lower for wheat this morning and mixed/soft for corn and soybeans, as wheat prices correct last week’s recovery burst. Wheat prices softened on the lack of any threat to Russian export potential while Russia continued to bomb the Ukrainian port of Odessa on Sunday. Also, two vessels did arrive in the port of Chornomorsk in Ukraine, which follows rumors of elevated Ukrainian corn loadings last week.

Ukraine plans to sue Hungary, Poland, and Slovakia for bans on Ukrainian Ag products and will take their case to the WTO. Over the weekend, the three countries announced they would not honor lifting the EU ban to allow Ukrainian products to flow through their countries. This morning, Romania’s PM said that they may consider extending the Ukraine grain trade ban for another 30 days if import requests continue to rise, as they do not want to have a repeat of distorted domestic market prices. Seasonally on the calendar, today is the day to buy any of the three wheat exchanges, including French milling wheat, with seasonal trends suggesting a rise into November in 12 of the last 14 years.

Soybeans continue to weaken after last week’s NOPA showed a decline in the soybean crush due to maintenance downtime that crushing plants took. Soybean oil stocks though were put at the lowest since 2014 due to the reduced crush, while oil prices continue to trend higher over 90.00. In the coming months, there are new biodiesel plants coming online that will be looking for bean oil. The growing thought is that farmers will likely sell soybeans and store corn since they have a built-in corn put with the insurance essentially kicked in around $5.06 on 85% coverage levels, while soybean prices are near their spring highs. This is adding to the pervasive selling in soybeans as of late, despite bullish yield reductions in upcoming reports.

Hedge funds are holding their largest net short position in corn since August 2020. This leans bullish, giving funds more opportunity to buy going forward. Corn is the cheapest and most oversold Ag commodity.

Brazil continues to remain in a concerning dry weather pattern with minimal planting underway with temperatures in the 97-102° this week. The bulk of the soybean crop must be planted by mid to late October to prevent safrinha seeding delays. Otherwise, pollination will occur in May's dry, hot time window.

It was a strong price performing week for cattle and feeder cattle last week, with a firm outlook offered this morning. The negotiated fed cattle trade developed in all regions at higher values, with live trade in the north $1-2 higher at $184-185, with dressed sales at $288-290. Live sales in the South were $183, which was $1-3 higher on the week. Last week, the choice cutout fell $7 while select was off $3 as cattle slaughter jumped to a 10-week high of 632,000 head. In the last nine weeks, slaughter has been down 6% from a year ago and the lowest in seven years. This Friday is the monthly COF report, with inventories expected to be below year-ago levels again.

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