Overnight futures trading was mixed, with prices fluctuating on both sides of unchanged. Much of the movement stemmed from headlines that the US and Japan have reached a new trade agreement, though specific details remain limited. The deal raises hopes for expanded trade between the two nations, which is the key takeaway for now. The US also announced trade agreements with the Philippines and Thailand; however, these are not major trading partners. While ethanol and soybean meal exports to the Philippines could see some increase, they are already consistent buyers, so that overall volume changes may be minimal.

Market participants remain focused on potential progress with China, India, and the European Union. Unfortunately, movement on those fronts appears stalled. This morning, the EU revealed it is considering filing an anti-coercion complaint with the WTO over US tariffs, and it’s reportedly weighing the imposition of 30% tariffs on $117 billion worth of US goods, including aircraft and vehicles.

Aside from trade developments, fresh market-moving news is limited. The short-term US weather forecast calls for above-normal temperatures and a shift to cooler conditions. Rainfall is expected to accompany the transition, which may help reduce crop stress. Still, the variability in this year’s corn crop continues to grow, prompting more analysts to revise their yield estimates lower. The crop is far from being finalized, and the market keeps that in mind.

The Spring Wheat Quality Tour is underway, and on its first day, 167 fields are reporting better-than-expected yields, with 50 BPA reported in each field. This is up from 51.1 BPA, the five-year average. Last year, though, produced a record of 52.5 BPA. Spring wheat seedings are the lowest since 1970.

The trade is watching for China to secure any soybeans during August, which is the traditional time they start importing beans from the US. The US and China are meeting in Stockholm and are expected to produce a 90-day extension of the current tariff rates. Meanwhile Pres. Trump and the Chinese President. Xi will be meeting at the October APAC meeting to start honing the trade deals. It’s anticipated that Pres. Trump will demand that China comply with the trade deal they signed in 2020, called Phase 1. This procures $85 Bil dollars of US goods.

Per the words from the Glenn Frey song “The Heat Is On”, with heat in the Plains and the Midwest continuing into the closing days of July. Midwest temperatures in the mid-80s to mid-90s, with the southern Plains and Missouri having to endure mid-90s to lower 100s. These high temps are 1-2° lower than yesterday’s forecast, but the modeling continues to keep the heat to the end of the month while the Midwest looks to avoid such temps. Moisture is forecast to return in the first half of August.

Another round of contract highs yesterday in live and feeder cattle trade, with the live cattle retreating into the close while feeder cattle maintained strength at the bell. The cash feeder index gained another $1.03 and is now at a record $326.83. Box beef values on Tuesday again were mixed, with choice gaining $0.43 while select picked up $2.11 at $347.94.

We are getting estimates for Friday’s July Cattle on Feed report and the Semi-Annual Inventory Report. Currently, trade estimates for June marketings look to be at 96%, and placements are 98% in the July one feedlot inventory of 99% of the year ago. Estimates for the inventory data have yet to be posted, with not enough average guesses yet.