Grain prices are mixed to softer as attention remains on the weather and the finish of the growing season. Heat is breaking down across the Corn Belt, and rains are following it. Severe storms hit parts of the Midwest overnight, causing localized crop damage. While this will cut into production, it is not a major, widespread event, and those are the ones that bring buyers to the market. The August WASDE report will start to include more “from the field” data, giving us better production numbers.

The lack of progress and details on the recent trade deals is weighing on trade again this morning, as the agreements we see are more framework than actual signed deals. Little progress was made between the US and China yesterday, but both parties have agreed to keep talks open.

Weekly ethanol data will be released today, and trade is expecting a build in production given recent margin improvement. The Fed Reserve will release its interest rate decision this afternoon, with almost nobody expecting a reduction to current rates.

The August crop report will start seeing yield guesses, as StoneX is expected to put out their yield/production assessment on Monday. Then, we’ll see more estimates as we lead up to the August 12 USDA Crop report. The prominent Pro Farmer Crop Tour takes place on August 18th-21, and that will rival the data the USDA puts out on the 12th. We are heading into the time of year when the trade will guess how much yield they can produce to capture headlines. In all this, we are still missing a big demand factor that will absorb a big crop. Will end users piecemeal buy, or will we see a surprise Chinese purchase on a goodwill venture? We know China has to buy something from us, will they buy it sooner or wait until later?

A cooler forecast will start to appear within a day and continue into August 6 as cooler Canadian air pulls southward, and storms become less frequent. Showers and storms should persist for another two days before this cooler, drier air materializes. The 11-15-day forecast tries to build a Ridge in the Southwest. If that can establish itself, it will again start to bring a drier, warmer forecast in the Midwest by midmonth.

Just another day in the cattle market where new contract highs are seen both on live and feeder cattle yesterday as markets continued inching higher, which again is starting to create an overbought feature in the futures markets while Packers continue to work margins that are going into the red. Box beef values again tumbled on Tuesday, with the choice giving up $3.54 and select off $4.37. There is a note that the Packers are having trouble moving beef, even with last week’s sharp drop in the kill. As we said yesterday, boxed beef prices did peak in late June and have fallen sharply. This will likely cause a pause in the cash kill market while the board continues to erase its significant discounts to the cash price.

Feeder cattle have become extremely overbought and have achieved a measured target price on our technicals of 337. This does not mean the number can’t be bumped around a bit, but the market's current overbought state, with the last trading day of the month on Thursday, could create an initial stall in the advance for spot feeders under 340. Watch our video on the seasonality of the feeder calf market stalling window at the link here.