The most significant crop report of the year is today at 11:00 a.m.

A mixed start greets the last day of the month and the last day of the quarter as the market awaits today’s USDA Stocks and Acreage data at 11:00 a.m. CT. 95.35 Mil acres is the supposed average guess for corn acreage (all of April through early June, the conversation was consistently 96 million acres), while soybeans are 83.66 million acres. Today is also the first notice day for July contracts on deliveries, and deliveries were mostly on the light side, with none for corn. Soybeans are finding support because Brazilian port space is filling up, and there is limited availability until September. Meanwhile, the Brazilian safrinha corn harvest remains slow.

Trade news is mixed this morning. The US and Canada are now seeing tensions cool after a blow-up that ended last week, which caused the US to end trade talks. Canada backed down on its digital tax to restart trade negotiations. The US and Canada have agreed to reach a trade pact by July 21. The White House continues to tell trade that several deals are close at hand and will be announced in the next few weeks. The trade has heard this several times and now wants to see actual progress, including with China, which has no new crop US purchases on the books. This is the time of year when China starts its US import bookings. It will be more of a concern if we do not see business within the next two to three weeks.

The tax and spending bill, which is going through the Senate, included 45Z legislation. Like the House version, the Senate agreed that subsidized feedstocks must be produced in North America. However, the program was cut by two years to 2029 to save a budgetary explosion. Given the shift to subsidize North American-only feedstocks, it is bullish for soy oil, as Chinese UCO and Brazilian tallow will no longer qualify. The prior Senate bill had offered a 20% reduction on the 45Z carbon credit.

Weather forecasts are mixed this morning. Several outlooks call for warmer temperatures across the Corn Belt, including elevated rain chances. This will be necessary as more regions are reporting drying soils. In the EU model, most of the Midwest is forecasted to receive anywhere from .5-2.00” of rainfall, but some areas will still maintain a slight decline in soil moisture. Midwest high temperatures range from 85-92° between July 3rd and 9th.

It was a higher week for live and feeder cattle futures at Friday’s close. The labor strike announcement, which would typically be bearish on the Amarillo packing plant, did the opposite. Friday’s rally was driven by June’s discount on the cash market ahead of today’s expiration. The Teamsters union strike at Tyson's beef plant in Amarillo, Texas, would typically be bearish, but because the capacity of 6,000 head per day, which makes up 20% of Tyson's total capacity, will cause a jump in box beef values if not settled quickly.

Last week’s fed cattle trade was lower in all regions again for the second week in a row, with the dressed trade at $368-372 on Friday, which was off $5-9 while live sales declined to $4-6 and traded at $230-232. Sales in the South are at $224-225, off $4-5, putting them on par with the June live cattle settlement Friday. Last week’s kill was steady at 560,000 head, but it is still 50,000 less than a year ago. Cumulative slaughter is nearly 1 million head behind last year, which puts it down 6% and at a 90-year low. Box beef prices climbed last week, with choice beef up $6. The June board is even with the southern cash trade today, while August cattle futures maintain a $10 discount. With only four working days this week, we will have a holiday reduced kill.