Corn and soybeans continue to move higher from yesterday’s consolidation. Early Monday morning’s lows for December corn near 408 and November soybeans at 998.2 proved to be a vacuum that index funds could not get others to follow their selling. Since Monday, we’ve seen progressive buying as the sharks (algo index funds) eat amongst themselves, looking for sellers in a building short covering event. This created sizable gains this morning, with the soy complex leading the charge higher.

Soybeans are benefiting from short covering and the addition of a risk premium. The immediate weather is mostly favorable across the US, but more forecasts are adding heat going into August, which is when we see more of an impact on soybean development. The soy complex has no room for error in production, and any potential yield loss is receiving attention.

The market is finally starting to focus more on demand than production, which is also favoring values. Corn and soybean export sales are at yearly projections with 7 weeks left in the year. We may have good growing conditions, but if the current demand pace continues, they will need to maintain adequate reserves, especially soybeans. Ocean freight is firming, telling us the rumors about export demand are likely true. Corn and wheat are also firmer this morning, with short coverings providing support. We are hearing some issues with corn pollination this year, and while not widespread, it is the same as with soybeans, which is enough to chip away at yields and crop size.

The forecast has temperatures hot next week across the southern plains and the SW Midwest, with highs in the 90s to lower 100s. The Midwest will see highs in the upper 80s to mid-90s, with the heat index pushing over 100. The mean position of a high-pressure Ridge is across the SWS in the 11-15 day window, which is perceived as non-threatening for the Midwest.

Cattle futures consolidated recent sharp recovery gains, closing with just minor losses after early-day setbacks. The cash trade had the north quoted $380 on the dressed, which is $1.00 higher than last week, while live sales in Kansas were quoted $1 higher at $231. Box beef had choice gaining $0.43 while select tumbled $4.07.

August cattle look to continue climbing to narrow the spread difference with the South, as the cash decline that typically occurs over the summer is not manifesting. Brazilian beef import tariffs of 50% starting August 1 look like a real outcome. This is changing the dynamics of the summer cash market as we go into fall. August is known for waning consumer demand in the dog days of summer, as grilling typically turns to burgers/brats/chicken thighs. The cattle bull market of 2025 is going to test what the consumer will maintain.