Grain trade is under pressure this morning, with wheat leading the weakness. Soybeans are trying to find support as weather models continue to indicate a dry finish to the growing season. While no significant soybean production losses are expected, given current balance sheets, the complex cannot afford yield losses of any size. The soy complex is also taking support this morning from news that China will start rotating its government storage facilities. China buys US soybeans for storage, which may be a sign we will finally see Chinese sales take place (China likes storing US beans relative to Brazilian beans as they are drier in content).

Corn and wheat demand remains solid, but crop sizes are larger and can absorb this usage. Soybeans are already in a rationing position, and any added demand will significantly impact balance sheets. Fresh news is light this morning, and this is capping daily gains. The US just hiked tariffs against India to 50% as that country continues to buy Russian oil, which may have a spillover impact on commodities today.

Given the impact of the Chinese trade war, the Trump administration is considering providing emergency financial assistance to corn and soybean farmers as a bridge until they receive next year’s new program payments under PLC or ARC-CO. The USDA and the Trump administration are becoming more vocal about row crop financial assistance and following through on it, similar to the first Trump administration price resolution.

Tomorrow morning, Statistics Canada will release its 2025 Canadian crop estimates. The canola crop is estimated to be as large as 22-23 MMTs. With China imposing 77% tariffs on Canadian canola, this will increase the US imports of canola oil and meal until that can be rectified.

A cool drive forecast now takes over the Midwest for the weekend, with the extended range 11-15 day forecast keeping rainfall below normal as a low-pressure trough progresses eastward. Some finishing rain is needed, but at this time, they are not widespread across the Midwest. This will keep the debate high that the USDA will need to reflect a less-than-optimistic yield forecast in their September update. The October report is always the most impactful, based mainly on actual harvested yields.

Live and feeder cattle futures followed through on Monday’s strong recovery close from the COF and New World screwworm stories by posting new contract highs again by a substantial degree. The feeder cattle index gained another $1.25 and now stands at $359.17. Box beef prices were also substantially strong again, with choice picking up $4.68 at $413.17 while select also jumped $5.38 and traded at $390.76. It’s highly anticipated the negotiated cash trade will be higher this week.