Wheat is mixed this morning with corn and soybeans, softer. The weakness in soybean oil has the bean market back testing yesterday’s lows despite a surprise drop in crop ratings of 4% in the good to excellent category. Soybeans expected a seasonal decline in the good/excellent category by 1% down to 68% but were met with a break to 65%. Also, there are rumors that some early harvested beans and Southwest Illinois are said to run 7-9 BPA lower than last year.

Feel scouts are becoming more vocal about stating that disease is causing corn plants to shut down. More than likely, the decline in crop conditions is a combination of both. Regardless, it is becoming difficult for market bears, including the USDA, to continue supporting some of their current yield estimates.

The July corn grind for ethanol totaled 456 million bu. This was a 2% increase from June but 6% less than what the industry produced in July 2024. This produced 1.86 million tons of dried distiller grains, 1% less than in June and 7% less than last July.

Census soybean crush for July was just under trade estimates with 205 mbu. While the estimates below expectations they were well above the 197 mbu ground in June and 193 mbu in July 2024. From this, 2.43 billion pounds of soy oil were produced, 4% more than last month and 6% more than a year ago. End of July soy oil stocks totaled 1.87 billion pounds, a 7-month low. Meal inventory at the end of July was 353,131 short tons, a 9-month low. This quiets trade concerns that US soy meal stocks would become burdensome at today’s crush volume.

Dryness is becoming an issue in trying to finish the bean crop throughout the Midwest, and further condition rating scores will likely fall off quickly. With the exceptionally dry weather last year, the corn and soybean seed moisture levels were historically low, resulting in lower reported yields in the January report. NASS, in their September, October, and November reports, will pull and weigh ears/pods and adjust them back to average moisture levels. This cool/dry weather across the E Midwest is certainly stealing yield potential. Meanwhile, it’s hoped that the W Midwest will get just enough rainfall to help support yields.

It was a mixed trading day yesterday in cattle futures. Last Friday’s strong close was not met with buying that could do more than challenge the prior week’s highs on a 78% Fibonacci recovery before drifting late in the day. Yesterday’s feeder index drifted $0.91 and is now at $364.47. This supports the feeder index as it no longer runs at a premium. Last week’s 55 area average live steer price was steady at $244, while the dressed dear price was steady at $386. Last week’s negotiated volume was less than 60,000 head. The Packers bought 45,379 head for 1-14 day delivery, with the remaining 14,271 head for 15-30 day delivery.\Box beef started the week softer, with choice off $1.99, and select dropped $3.83. The weaker beef trends that seasonally can occur into September can weigh on the Fed cattle price outlook.

Live cattle October has defined resistance at 242, with October feeders' resistance at 369-370. Retracement support for October cattle in this volatility trade would come in at trendline support on the continuation charts at 234-235, with October feeder cattle finding support at 355-356.