Grain futures are higher this morning after corn's impressive reversal on Wednesday, breaking below 4.00 and closing at its high for the day. Export sales out this morning were impressive, with new crop corn over 3 MMTs and wheat at 737,800 MTs. Short covering is occuring ahead of next Tuesday’s August 12 WASDE and crop production guesses. With average guesses on new crop corn over 384 BPA, the market is a bit concerned that the USDA may not fall for the trap of putting in a large production number early in the year, just to have to scale it back as a move into the fall. The perma-bear’s believe the USDA will raise the yield above last year’s 183 BPA with crop ratings higher than last year, even though they got last years wrong following crop condition reports.

As of this morning, December corn has almost made it back to its price level before the large 188.1 BPA guess from StoneX that set the high watermark for production probably through year-end, and now demand is starting to become an equation that badly needs to be talked about. Without China buying anything at all, and likely nothing into the end of the year. We continue to see a strong weekly sales program for US grain that is constantly said to be the last good week of exports. Yet we continue to see countries seek our product, as China has essentially become a “bull in the China shop”, taking what Brazil and Argentina can send.

Pres. Trump has stated that he will likely meet with Pres. Putin and Ukrainian Pres. Zelenskiy in the coming days. It’s unknown whether a peace accord can be seen, especially with the ego of Zelenskiy wanting the land back that was lost in 2014 and during the conflict since 2022. A peace accord, which again has to overcome egos, would allow regular grain exports to return to normal, but would only be considered slightly bearish at this time, as grain has been mostly flowing freely out of the region. Premiums on freight insurance would be the savings and the new competition for pricing.

Warm temperatures are hitting the Midwest but a near-normal rain forecast looks to maintain the Midwest crop in August. No extreme heat is expected but we will see mid-80s to lower 90s while the far Western Plains could see some lower 100s over the next few days. Ridge riding storms will become a daily feature over the next week with showers and thunderstorms in central Illinois and Eastern Indiana over the weekend.

Another explosive day in cattle futures yesterday, after a soft start, buying reemerged, as a slingshot affect continued to take place after last Thursday and Monday’s negative reversal days that found support at moving average levels that brought buying back into the board to eradicate discounts. The Brazilian tariffs in place as of last Friday have pinched beef supplies, as Brazil had been 25% of US imports in the second quarter, and it is mostly hamburger. Australia is stepping up, but there’s only so much they can fill the gap on. This has brought a new development into the beef trade, which could be another “eggs in the grocery store incident” that the Trump administration will have to rectify if hamburger finds heavy competition on the consumer table in search of cheaper protein sources. Until this is reversed, the market is now on a run to see how high is high. “The cure for high prices is high prices”.

Midweek cattle slaughter is at 332,000 head, 1,000 head less than last week and 29,000 head less than a year ago. Big gains are again seen in the box beef market, with yesterday afternoon’s final numbers showing choice up $4.92 at $374.86 while select jumped $5.42 at $351.36. The choice/select spread has rallied sharply and extended gains this week to a $23.50 choice premium.

Some light cash cattle were traded in Texas at $237, a gain of $2 for the week. Meanwhile, asking prices are quoted in the South at $240, while the North is seeking $250. Fall and winter live cattle contracts are now clearing $230 and look to eliminate some of their discounts to cash, as frankly, winter cattle are typically always worth more than August cattle. But we have been dealing with “bull markets climbing a wall of worry”. September feeder now targets 350-354 with their venture into again new all-time highs.