Grains are mixed after a soft overnight trade.

Grain futures are mixed to start the week, as the focus will start to turn to the NASS September 1 Stocks, and the 2023 Final Small Grains report out this Friday. It is not uncommon to get some statistical surprises, as the March and June stock data may have been off with the premium basis that was paid over the summer. It’s possible that last year’s soybean crop was overstated.

Ukraine officials reported that Russian airstrikes significantly damaged port structures and destroyed grain facilities. Power grids were also targeted, affecting thousands. In Odessa, a hypersonic missile destroyed the port grain storage. The current Russian barrage is in retaliation for Ukraine’s attack on Russia’s Black Sea headquarters in Crimea. Ukraine’s Ag Ministry showed Sept 1-24 exports were down sharply from last year at 1.57 MMT compared to 3.2 MMT in the same period. This is due to costly inland routes across Europe that are being mostly utilized.

Wheat tenders this week have Tunisia tendering to buy 100,000 MTs of wheat and 50,000 MTs of barley for nearby shipment from October 5-November 15. Tunisia typically tenders for hundred thousand MTs of wheat and buys much more than the initial tender requests. Egypt now still working out details of finance to secure Kazak wheat. Meanwhile, Bangladesh is seeking 50,000 MTs of wheat for November.

The drought is deepening in Australia, most of Argentina, and North Central Brazil, and now the Russian winter wheat areas are starting to note concern. But for now, the biggest weather concern is Australia, as their wheat crop reproduces under hot/dry weather. High temperatures and North Central Brazil reached the lower 100s as past weekend, causing farmers to continue to delay plantings at the risk of getting the safrinha corn in late next February/March.

Friday’s COF report was considered neutral to expectations. On Feed 97.8% of last year (97.7% estimated), August Placements 94.9% (93.6% expected), and August Marketings 94.0% (94.7% expected). Strong cash trade firmed live cattle futures after an early week slump as the cash trade was a dollar higher in the South at $183, with live sales quoted steady to $2 higher at $184-186. Dressed sales were steady at $292. Last week’s choice cutout value fell $2 for the week and select was $3 lower.

Estimated slaughter margins fell $34/head to a new low for the year. This is the lowest margin for late September since 2016. The market fears beef demand trends will be hampered, especially with rumors now that restaurant traffic is slowing. High-end cuts this time of year move through the restaurants.