Grains started the week firm but settled for mixed by morning.
Grain futures ended their overnight session mixed after a mostly higher performance. Rising US export potential and further short covering in wheat with China purchasing more SRW out of the PNW. It’s becoming apparent now that Australian supply shortages due to drought will force China to pick up more wheat elsewhere, while Brazil will now require Argentine milling wheat imports due to their excessive rainfall, creating a crop in Brazil that will turn into mostly feed quality.
The NOPA Crush at 11 a.m. CT with analysts forecasting a US soybean crush in September of 161.68 mbu vs 161.453 mbu in August (last year at this time, the crush was 158.1 Mil Bu). Ending soyoil stocks are expected to be 1.208 billion lbs vs 1.25 in August and 1.459 in the same month last year. This afternoon’s harvest progress reports anticipate soybeans at 59-62%, with corn at 45-48% through Sunday.
Last Friday’s Commitment of Traders showed that managed funds bought 46,742 contracts of corn (net -112,691), sold 2,835 contracts of beans (net 2,166), and sold 5,547 contracts of wheat (net -104,335). Funds are still short corn but dropped almost 1/3 of their position while maintaining a massive wheat short.
South American weather forecasts suggest Argentina may pick up some much needed rain next week in the 7-10 day model. This lasting drought has pulled sub-moisture down to record lows into early October. This rain needs to pull forward inside of the seven-day models. Brazil's weather still maintains a below to much-below normal rain for the northern crop areas while too much rain falls in the South. In Mato Grosso, soybean seeding has halted its dryness as farmers await seed germinating rain. The drought worsens across all of Australia amid a lack of spring rainfall.
Last week, live and feeder cattle closed slightly higher on the week, with a firm outlook offered for early trade this morning. Last week’s early fund liquidation found demand with a steady higher cash trade that lifted the markets back to just above unchanged on the week. Cattle slaughter last week totaled 617,000 head, which was off 11,000 head from the previous week and 45,000 head lower than a year ago. Slaughter in the last four weeks has been 7% less than a year ago and the lowest in seven years. Fed supplies are being pushed back. Meanwhile, the beef market has choice cutout continuing to find support around the $300 mark as it awaits a seasonal rally. Fed supplies being backed up helps pick up the weight on cattle.