Overnight markets were mainly mixed, with corn and soybeans trending lower while wheat posted modest gains. Corn and soybean futures are under pressure to start the week following weekend rainfall across some of the Corn Belt’s driest areas, particularly in northern Illinois and parts of Indiana. However, much of that rainfall came in the form of severe storms that led to localized flooding, meaning a significant portion of the moisture likely ran off. This has tempered the market's negative response to corn.

Large fund short positions in corn are also helping to limit additional downside, as are ongoing mixed crop condition reports from across the country. Many analysts are now suggesting the corn crop is too inconsistent to meet some of the more optimistic yield forecasts, and there is growing sentiment that the USDA’s 181 bpa projection could be more accurate.

Soybeans face added pressure from rising US-China trade tensions and reports that China is strengthening its agricultural ties with Brazil. Meanwhile, global weather concerns are providing early-week support for wheat, with drought conditions developing in several key production regions worldwide.

Wheat prices are finding mild support, producing penny gains on the news that Bangladesh signed a US wheat import deal late Sunday that includes annual import tonnages of 700,000 MTs for the next five years in an MOU with US Wheat Associates. The deal targets the Trump administration's 35% tariff hike starting August 1. Bangladesh imports 7 MMTs of wheat yearly, typically sourced from the Black Sea. This is thought to be a new inroad for sales, where in the past, on average, 200,000 MTs of wheat annually were imported. Also in wheat news, a Russian analyst lowered their wheat crop size to 83.5 MMTs, a decline of .5 MMTs from previous estimates, due to the lower-than-expected wheat yields and as W Russia. This area experienced drought, where emergencies have been declared. WASDE has the Russian crop at 83.50 MMTs.

In weather, a high-pressure Ridge is positioned across the SW US in the lower Plains over the weekend. Ridge-riding storms will occur across the northern Plains and Midwest, while the southern half of the Plains and Western belt will be in a very arid pattern, with limited rainfall over the next 10 days. The NOAA has suggested we could see above-normal temperatures through October, even though the current heat spell is anticipated to regress later this week, with the WCB seeing below-normal precipitation. Also, there are concerns that drought is starting to rebuild in Canada.

After a rough start last week, cattle futures closed higher on the week, despite Friday’s volatility and profit-taking weakness. This morning anticipates a mixed start, as August live cattle will be tied for continual strength as its discount to cash is dealt with. Negotiated fed trade was steady-higher in all regions last week, with sales in the north at $240-241, while dressed sales were at $380. Both showed a gain of $1 on the week. In the South, cash trade was in a range of $230-232, which was also steady- $2 higher. This week, the concern is that the cash trade will not advance but likely drift to the weakness in box beef.

Last week’s reported cattle slaughter was at 560,000 head, off 5000 head week over week and was off 26,000 head from a year ago. Despite that lower production, the choice box beef market was off $5, and select tumbled $1. The delivery process is still two weeks out, which will produce resistance for August live cattle in the $225-230 range, given the southern cash trade is in the 230-232 range and anticipated to drift.