This morning, the marketplace has a universal risk off tone touching nearly every sector. The pressure is driven by a combination of factors, including the final day of the month and quarter, which often brings increased positioning and portfolio adjustments. However, the dominant concern across the market today is the looming US government shutdown. Without a last minute breakthrough in budget talks, a shutdown appears increasingly likely, adding another layer of caution to trading.

In the grain markets, attention is focused on today’s USDA Quarterly Stocks report, which will provide September 1 inventory data. These figures effectively finalize old crop ending stocks for corn and soybeans and will set the tone heading into the heart of harvest. Once the numbers are out, the trade will quickly shift back to yield reports and harvest progress. Sep 1st corn stocks est 1.34 bbu, -430 mbu from year ago.  Soybean stocks est 323 mbu,  -20 mbu from last year.

Harvest activity is expected to advance rapidly this week under mostly favorable weather conditions. However, in parts of the Corn Belt, there are reports that corn is not drying down well in the field, a common issue when crops fail to fully mature. Meanwhile, soybean fields are extremely dry, and some producers are actually hoping for light rain to slightly rehydrate fields before harvest to reduce shatter losses and dust.

Recent flash sales activity has also helped support the corn market. With the US dollar trending lower and futures under pressure, additional sales, especially to Mexico, are likely in the short term. With the Mexican feeder cattle being unavailable to US feedlots, residual use can be lowered, but exports increased to Mexico with them needing more corn than initially planned for in the balance sheets. The net effect is still neutral, but the USDA may try to do one and not the other, just to make up for it in the next.

After a firm start yesterday morning, both live and feeder cattle closed lower again yesterday. The cash feeder index rose $2.57 to $367.61, a new record. Yet spot October feeder cattle moved to a $12 discount by the close. There are continued fears that President Trump will work with Brazil to encourage investment in Argentina to help their economy, and may soften his stance on tariffs of 50% on Brazilian production. Whether this occurs or not, that is what the market has created the current volatility over.

Box beef prices have been lower for the fourth week in a row, with yesterday afternoon’s beef report showing choice off $0.75 and select lower by $3.55. Negotiated trade later this week will be somewhat tied to the board's performance. A close below 232 on December cattle and 349 for November feeder cattle (both are last week’s lows) will imply cattle trade is in a wave” C” lower, which can be precipitous.