Moderate gains were seen for much of the overnight session as short covering developed. Corn, soybeans, and wheat were becoming undervalued in the global market, and support is starting to be provided. Support also came as news surfaced that Argentina will be reinstating its export taxes on the sales of grains, beef, and poultry because a $7 billion cap that was instituted had been reached. This paves the way for the US to bring the needed $20 billion in currency swaps to stabilize its currency.

Lower-than-expected yields and ongoing strong demand are starting to have more of an impact on price discovery as well. The interior cash market is getting choppy as buyers are not seeing the movement they expected prior to and at the start of harvest, primarily on corn. Lower yields are one reason for this, but so is the addition of storage capacity across the US. The ability to hold an entire year’s production is becoming more common, and cash buyers are going to have to adjust their buying habits accordingly.

Reports of corn selling into Southwest feedlots at +90 Dec futures tell us just how tight corn stocks are right now. Corn exports are not slowing either. Soybean and wheat demand remain strong. Demand is not the problem with today’s trade; supply is, and until we can get trade to shift its attention, market appreciation may be limited. This morning’s export sales for corn were a strong 1.92 Mil Bu, with soybeans at 724,500 MTs.

Next Tuesday, September 30, the USDA will have its stocks report, with corn anticipated to be at 1.34 Bil Bu, soybeans at 330 mil Bu, and wheat at 2.05 Bil Bu. Live cattle futures moved lower yesterday for the second day in a row, while feeder cattle retreated sharply from early-week gains. The cash index yesterday was off $0.21 to $3 61.31. The cattle trade is performing technically as we had projected with a (X) wave recovery rally peaking on Monday for live cattle and Tuesday for feeder cattle.

Negotiated trade yesterday had a few loads in Nebraska at $365, off $6 from last week, and a few loads sold in Iowa at $365, which would be $7 lower. Box beef continues to erode with afternoon numbers showing choice was off $3.41, and select gave up the equal amount of $3.48 lower as well.

Reuters is carrying stories about Pres. Trump and Pres. Lulu of Brazil are orchestrating a phone call next week to discuss tariffs. This is a negative development for live cattle, which enjoyed a sharp lift when Brazilian beef imports were shut off at the beginning of July with 50% tariffs. Technically, live cattle could break to the low 220-224 price range. The developments of the story going to next week need watching.