Grains are mixed this morning, while soybeans get another firm bounce as the Wall Street Journal put out a story that a senior Chinese Trade Negotiator will be traveling to meet with US officials later this week. Speculation is that the visit is related to a desire by the President. Trump and the Chinese President. Xi to hold a face-to-face meeting and advance trade talks later this year. Given the fact that China has purchased no new crop soybeans, the conversation of trade negotiations always creates sensitivity in the soybean market. Especially now, with the carryout reduced to below 300 Mil Bu on reduced acreage and a drier-than-desired finish occurring in the bean crop.

Uncertainty continues to surround U.S. yield projections, and debates remain intense as the growing season moves into its final stretch. Cooler temperatures are providing temporary relief across much of the Corn Belt this week, but weather models point to a return of above-normal heat by early September. While precipitation forecasts show near-average totals, many areas still indicate they will need more moisture to finish crops properly. In contrast, other regions remain overly saturated, which is leading to increased plant disease pressure.

These mixed conditions add further doubt to current yield projections for corn and soybeans. Soybeans are especially vulnerable, as balance sheet estimates leave little room for any production losses. As a result, traders are beginning to factor in potential downward adjustments, and this has sparked renewed buying interest in the market. Importantly, this is not just short covering but also represents fresh speculative buying, a positive sign for overall price strength.

Two areas of concern to be aware of are that Ukraine has struggled under a drought, reducing its corn supplies, there is a shortage of fertilizer in Ukraine ahead of the fall planting of the wheat crop. 95% of all wheat grown in Ukraine is winter wheat.

It’s been dry, but a cooler forecast now prevails into September 1. Highs are going to be in the 60s and 70s, likely creating frost concerns as we get into September. Only long-term models again produce Midwest rainfall in the forecast, and that’s not until early September. Crops need a good final rainfall now to get a finish, or otherwise, yields will certainly be marked down in the September crop report.

After a rough opening in cattle and feeder futures yesterday, the trade recovered to close near the higher end of the range after stumbling to near limit-down levels in feeder cattle. The story of an individual from Central America traveling to Maryland and having the New World Screwworm infection was treated with normal medical protocol and brings no threat to the US heard health. It’s just the mention of any screwworm in the United States, along with what was construed as a slightly price negative feeder cattle COF number, had the market under heavy liquidative pressure given the high end close on Friday.

Feeder cattle closing back above 360 in the front three contracts maintains positive momentum, keeping the upward trend bias alive. The cash feeder index jumped $7.74 to start the week and is at $3 57.92, with cash coming to the August feeder cattle contract rather than the other way around, with expiration on Thursday.

Box beef values were also higher on Monday, with choice gaining $0.58 to $408.49, and select was $1.72 higher at $385.38. Estimated slaughter margins have now rallied to $238/head, which is up from last week’s $167. An outlook for firm cash trade is anticipated later this week.