Grain prices opened softer last night, but that was about as bad as it could get after the news that the Argentine government reduced their ag export taxes on Saturday, along with what is considered favorable weather. What could have been more substantial price declines found grains quickly finding support near last week’s lows. Argentina lowered its agricultural taxes to a permanent reduction, not one of those 90-day window opportunities with a flush of sales. Still, reducing their export taxes will help make Argentina more competitive in the global market.

A few big stories that came out over the weekend are driving this morning’s trade. For one, a trade deal has been reached between the US and the EU that establishes the framework for a long-term deal. This will set EU tariffs at 15% with no retaliation from the EU. Trade officials also stated that we are closer to a deal with China, and talks will resume this week. Only three days are left until August 1, and many hope the US and India can also reach a trade deal that avoids higher US tariffs. The Trump Administration will be sending out letters outlining the August 1 tariff rates early this week to the nations that have not yet negotiated a trade deal.

Thursday is first notice day on the August contracts, and this will be more of a factor as the week progresses, as will weather and harvest reports from the southern US. The overnight grain trade weakness was not unexpected, but we are in one of the most negative price seasonal windows for grains (July 20-August 4), and, interestingly, grains held better than what would’ve been expected. The day session has more volume and will possibly produce more willing sellers who put pressure on current overnight losses.

In the Midwest, moderate heat will persist across the Plains and Midwest for another two days when a cooler temperature pattern follows. This will be good for the corn filling process, along with soybeans that will be podding. High temps in the mid-80s to mid-90s through Tuesday along with the Plains and Missouri having mid-90s to lower 100s will retrograde. Mild temperatures are expected later this week of 70s and 80s for highs to return for the closing days of July and the opening of August. Slightly above normal temperatures are forecasted in the 11-15 day window, but there is no indication that a high-pressure Ridge will return to the central US into mid-August. There should be nearly daily rain chances in the Plains and Midwest, and the upcoming 10-day forecast.

After closing near contract highs last week, just before the July COF report and Semi-annual Inventory Reports were released, producing friendly expectations for this morning’s price outlook. Last week’s cash feeder Index gained $6.55 and is at a record high of $328.83. Placements at 92% for feeder cattle versus the estimate of 98%, along with on feed number 98% against an estimate of 99%, create an expectation of a higher start this morning. How much of the friendly data was pre-traded late last week will be revealed in this morning’s market action. Remember that the cattle market has earned a reputation for the “Cattle on Fade Report”, meaning the end of the session may not necessarily reflect expectations at the beginning of the day. Watch for potential violent trade that offers a sharply higher start that does not and with gains reflective of the opening. Today’s closing prices will reflect how much of the cattle report was already anticipated.

Last week’s negotiated fed cattle trade was produced at the end of the week, and higher trends are still maintained for the time of year, where seasonality would reflect lower prices. Live trade in the north was steady at $240-242 while live sales in Kansas were quoted in a wide range of $230-238, anywhere from steady to an $ $8 gain. Live trade in Texas showed an increase of $ $1 to $2 at $231-232. Last week’s slaughter fell to 549,000 head, the lowest for the year, and was 56,000 less than a year ago. There have been just two weeks this year when slaughter was above last year.