The overnight action went into corrective mode after last Friday’s strong recovery, with wheat choosing to trade firm following strength on French milling wheat and spot November soybeans heading for unchanged in the closing hour of morning trade. The monthly WASDE report from last Friday was slightly bearish, as even though the USDA lowered the yield, we found more acres to harvest. Balance sheets added 1.3 million corn and 200,000 soybean acres in August, putting them well above the June revisions data. More analysts are now calling into question the USDA and NASS methodology and casting more doubt on government data.

The trade will focus more on harvest reports this week as activity will become more widespread. As it does, more reports of disease pressure are also coming in, with heavy losses in corn fields. Even in treated fields, farmers are seeing heavy losses to corn yield, with several topping 20 bpa. This week’s weather looks quite favorable for harvest activity, and basis will react accordingly. It is interesting to see that most buyers expect big fall deliveries despite a lot of new, shiny bins going up across the entire Corn Belt. A lot more bunkers and ground piles are also ready to be filled. Given these signs and uncertain yields, fall receipts of corn and soybeans might be well below expectations this year.

Export inspections will be released this morning, along with the monthly NOPA crush report (estimates are for a record 181.5 Mil Bu, but it will be down 14 Mil from July). Crop conditions will be updated after the close. The Federal Reserve meets tomorrow and Wednesday, and nearly all economists expect a cut to interest rates. Initially, a 50-basis-point cut was expected, but now most economists see a 25-basis-point cut as inflation is again on the rise.

The US trade delegation today continues with China in Madrid, as this is now the fourth meeting to try to make progress on Chinese trade. The Chinese are insisting that the fentanyl tariff of 20% be eliminated before they continue buying US beans. Pres. Trump remains resolute on fighting Fentanyl and said China is the main supplier of the horrible drug that makes its way into the US. One hopeful development is that it’s agreed that President Trump and the Chinese President. Xi has a meeting scheduled for late October at the World Economic Summit.

Last week's lower close for live and feeder cattle set up technical damage on the charts. Cattle futures are at risk of entering a further liquidation phase as index funds have been exiting the cattle market for two and a half weeks while rebalancing their money into corn and soybeans. December cattle closed $5.50 low on the week, while spot October feeder cattle lost almost $12.00, with deferred feeders having even more discounts added to their setback. September feeders have two more weeks left of trading and have fallen $13 under the cash index.

Boxed beef prices eroded under heavy pressure last week, with the choice cutout down $11 and select giving up $7. This is seasonal, and estimated slaughter margins are now at $160/head. For the second week in a row, cash trade was lower, with the South off $4 at $238 and cash trade in the North at $238-240, which was off $3-5 last week. Part of last week’s weakness on Friday was tied to rumors that the USDA would soon open up the US/Mexican border to feed cattle. This did not occur and may offer a recovery effort today.