Corn, soybeans, and wheat are all trading firmer this morning as harvest progresses and more signs of crop stress surface. Corn yields in many areas are falling short of expectations and, in some cases, are coming in below last year’s levels. Soybeans are also facing their own challenges, with the crop drying down more quickly than expected. Reports from across the country show soybean moisture levels below 10 percent, with some readings significantly lower. This leads to increased pod shatter, which not only reduces yields but also creates storage issues, including higher volumes of foreign material and fines.

Weather remains favorable across much of the Midwest, allowing harvest activity to ramp up significantly this week. As combines roll through more acres, traders will get a clearer view of both yield and quality on a broader scale. Demand, meanwhile, remains a bright spot. Even though China has yet to resume purchases of U.S. commodities, other global buyers have stepped in to fill the gap. U.S. corn exports are currently running at double last year’s pace, soybean exports are up 43 percent year over year, and wheat exports are tracking 12 percent higher. Soybean crush activity is also strong, running 20 percent ahead of last year. In short, demand is not the issue in today’s trade.

Outside market influences are also contributing to early strength. The Federal Reserve begins a two-day policy meeting today, with markets anticipating a 25-basis point cut in interest rates. The move is widely expected amid signs of a weakening labor market, which is raising concerns about potential economic stagnation if job losses accelerate. On a more supportive note, renewed signs of progress in trade discussions with both China and India are also helping to lift sentiment in the commodity markets this morning.

Yesterday’s soybean crush shows the growing demand, as more processing plants come online, including a new one in Nebraska. This is continuing to support soybean oil and the bean market this morning. The August crush was a record high, well above expectations, with the oil yield below last year, putting our soy oil stocks at an eight-month low. The crush is up 20.1% year to date when compared to last year.

Yesterday, live cattle and feeder cattle went into recovery mode, as last week’s late declines were tied to rumors that Sec. Rollins's comments on the US-Mexican border late Friday could be price negative, were unfounded. Yesterday, September feeders picked up $8.40 to narrow their difference to the cash index by $3.35 ahead of next week’s expiration. Yesterday’s cash feeder index softened by $0.93 to $362.15

Last week’s average dressed price for slaughter was $376, off $7, and at a 10-week low. The average live steer price was $240 and was off $3.00 to a 3-week low. The slaughter report indicated that 40,913 had repurchased on a 1-14 day delivery and 20,350 for a 15-30 day delivery. This combined volume last week was off 17%. Cumulative volume has declined by 6% less than last year and is at a record low since the USDA started reporting the data in 2002. The cattle trade is slowly taking the trend of the hog market to a captive one. As shown in yesterday’s charts for live cattle, recovery resistance is 238-240, with feeder cattle having resistance at 363-365.