Grain futures are showing modest strength in overnight trade, though soybeans are under light pressure. With little in the way of fresh market-moving news, futures are lacking strong direction. Wheat is leading the way higher, supported by growing expectations that U.S. exporters will pick up demand previously directed toward the Black Sea region. U.S. wheat is currently competitive in terms of logistics, pricing, and availability, and with export sales already running 12% ahead of last year, this trend could continue to strengthen.

Soybeans, on the other hand, are seeing some weakness tied to softer outside markets and a lack of recent Chinese purchases. Still, soybean demand remains solid, and with questions beginning to emerge about late-season weather impacts, production estimates are becoming less certain.

Corn is trading near unchanged in quiet trade. There isn’t much new information to drive prices, but it’s widely accepted that yields have been impacted by both adverse weather and disease pressure. The key question now is the extent of those losses. The absence of daily export sales announcements is also weighing on all three markets, along with the continued lack of trade agreements that would offer support to the U.S. agricultural sector.

Pres. Trump and Pres. Xi of China are scheduled to have a phone call on Friday. The last time the two spoke was on June 6 regarding the Geneva saw but and rare earth metals along with magnets. Discussion on Fridays is anticipated to be focused on China’s divestiture of TikTok. What is unknown is whether Trump will be discussing other trade issues, like soybeans. The issue continues to be the 20% fentanyl tariff applied to China. China insists this needs to be removed to start securing soybeans. Pres. Trump has made this a significant issue, so much so that USDA Sec. Rollins indicated there are preparations to work with Congress to add another ad hoc assistant package to US grain farmers due to the record-large crop harvest and low prices that are accentuated by China’s avoidance of US grains.

Live and feeder cattle futures moved sharply lower yesterday, indicative of a technical bear market that continues to stay in place. Sharp rallies like the one that occurred on Monday continue to get sold. The cash feeder index yesterday was off $0.27 at $361.36 with September futures at a 6 ½ dollar discount. The feeder barns are starting to soften, indicating that cash may drift into expiration that matches the September contract next week. Yesterday, there were sales noted in Texas at $2 39, which was off a dollar on the week, while feedlots in Kansas passed on similar bids. With the box beef market dropping, especially yesterday, select losing $6.80 while choice was off $4.44 is a significant loss on the week that will have Packers lowering bids.

On Friday, we have another Cattle on Feed report. Average estimates have the placements at 91%, September 1 feedlot at 99%, and marketings at 87%. The marketing number would be the lowest marketing rate on record for August.

December cattle have important support at 230, with November feeder cattle also having support at 342. Both numbers are critical, and if on a closing basis are violated, it opens up further liquidation, which is not uncommon at this time of the year. Index funds are exiting, and it’s hard to keep the leaking bucket full of participants to support the board.