Corn continued its short covering for the third day overnight, while soybeans bounced off $10.00 on some chatter that China is shopping for soybeans off the Pacific Northwest. Freight rates reveal that someone is looking for something in that area. China currently has no corn, soybeans, or wheat bookings from the US, and some traders are becoming nervous over demand, primarily as China builds trade relations with other commodity sources. Wheat futures drift as “the long been short wheat” spread unwinds. Gains are kept in moderation with any lack of a significant US weather threat.

Part of corn’s short covering rally since making its low early Monday morning is tied to concerns over pollination issues in some areas. It’s anticipated that any pollination issues are very isolated and will have a modest drag on US corn yields as a whole.

Indonesia has produced a trade deal with the US, reducing its proposed August 1 tariff rate from 32% down to 19%. Indonesian deal includes transshipment tariffs from China of 40%. The trade is awaiting something from Vietnam, which is not yet confirmed tariff deal, but that is still in the works. Indonesia has pledged to purchase $4.5 Bil dollars of US agricultural products. Last year’s purchase was estimated at $3.4 Bil.

Over the next two weeks, the forecast for the Midwest has daily showers with some heavy rain focused in the Eastern corn belt. Temperatures rise to the mid-80s-mid-90s, while any extreme heat will be focused on the S Plains where a high-pressure Ridge can produce temperatures in the lower 100s. Rainfall totals are estimated in the .5-3.00” range, with most of that in the Eastern Midwest, where it is needed.

December corn should encounter stiff resistance at the 431-435 range, the plateau of support it fell through. Prior support becomes new resistance. Meanwhile, November soybeans are pushing into resistance at 1013-1015, which was also prior support that gave way and is now resistance. Closing above 1017, the July 11 high would be a friendly development. Yesterday’s bean crush from the NOPA was friendly for price, but the market completely ignored it. Soybean oil received support during yesterday’s session from a stock reduction.

Yesterday’s cattle trade had the live trade recovering a substantial portion of its Monday setback, while feeder cattle managed a 50% recovery. The cash feeder Index gained $ .21 and settled at $321.10. A few loads of live cattle sold in Iowa yesterday on unaddressed bases at $380, steady with last week and on light volume.

On the charts, any further strength that sustains into today’s close in live cattle will be considered bullish and reflect a market that is still trending higher. The discount to cash for live cattle continues to promote the mentality that bull markets climb a wall of worry. Feeder cattle are also still trending higher with volatility, which has been heightened since last Thursday, and it is still poised to push higher, as no technical triggers have been revealed that a top is in place. Last Thursday’s outside-day lower close on live cattle, which used to be a very reliable indicator of a reversal, is being thwarted.