Grains continue to climb.

Grain futures are higher across the board again this morning as the weather forecast for next week continues to remain threatening for not only the Midwest but the European weather as well. Forecasts call for a round of hot/dry weather for the Plains and W Midwest, which will continue to pressure US crop ratings over the next few weeks. Soybean crushers and ethanol grinders continue to offer premiums for old crop corn and soybeans, which is unheard of typically this time of year getting close to harvest.

Russian forces have been said to have taken over Ukraine’s second largest power generation plant and are redeploying massive numbers of troops through the Black Sea area, which appears to be a new push across southern Ukraine. Depending on coming Black Sea battles, the Russian military focus on Southern Ukraine could produce future execution issues for the current Grain Export Corridor Pact. Egypt has canceled 240,000 metric tons of Ukrainian wheat purchased before the invasion of Ukraine on Fairbury 27th. The cancellation was likely replaced with recent purchases as Egypt does not like off-quality wheat.

Yesterday the central bank raised the lending rate by .75% and withdrew forward guidance which caused a strong upside response from the financial markets. By removing forward guidance, it says the Fed will make any future interest rate decisions on a data-based decision, rather than stating this is what will happen at each meeting forward.

Forecasts remain consistent with extreme heat for the Plains/Midwest with a drying trend for NW Midwest. Both the GFS and EU models are equally hot/dry through August 11. A high-pressure Ridge builds north and east early next week, pushing the jet stream back into Canada. This provides a hot/dry first half of August for the Plains, Midsouth, and W Midwest. There will be a series of days with high temperatures in the lower 100s. For crop areas like IA, NE, MN, and the Dakotas, where soil moisture is starting to become short or very short, the stress on crops will be acute.

Cattle look to start steady to lower after a softer cash tone outweighed the strength in the retail markets for the week. Light cash trade took place in most areas, with Northern dressed deals marked at $2 25, two dollars lower than last week’s weighted-average basis. The southern live business was marked mostly at $135, which is $1 lower than last week’s weighted average. Retail box beef values softened with choice down 1.12, while select dropped 2.07. Cattle slaughter at mid-week totaled 374,000 head, unchanged from last week and 17,000 more than a year ago.