Mixed trade to start Turnaround-Tuesday.

The grain trade is mixed with row crops slightly firmer on slipping crop ratings, while wheat remains soft with the ongoing harvest. The grain trade closes on Wednesday for the new federal holiday, while the non-US grain futures markets will stay open and trade electronically. Trade can become choppy with two 2-day trends this week and weather forecasts returning to focus outside the Western corn belt.

USDA rated 72% of the corn crop as “good” to “excellent” and 5% “poor” to “very poor.” The soybean crop was rated 70% “good” to “excellent” and 5% “poor” to “very poor.” The biggest declines for both crops were in Illinois. Both corn and soybeans remained rated well above year-ago at this time. USDA rated 76% of the spring wheat crop as “good” to “excellent” and 4% “poor” to “very poor.”

Long-range weather models are at odds with a high-pressure Ridge being maintained across the South-Central US, which will spur hot and dry weather during the closing days of June and into the early portion of July. Long-range forecasts have been less reliable as of late, but the trade notes that heat/dryness could hold the grip on the Eastern/Southern Midwest. Numerous record high temperatures were recorded across the Central and Eastern Midwest yesterday, with Chicago reaching a high of 97° in Toledo at 99°. The heat and dryness are forecasted to continue across the C and E Midwest for another 6-8 days, with any meaningful rainfall absent through June 26.

To the west, daily soaking rains will spur low-level flooding across NW Midwest and portions of the N Plains with 10-day accumulations of 3-6.00”. The diminished sunshine and rain add to crop nutrient leaching and the yellowing of corn. With excessive rainfall for the W Midwest and the heat/dryness across the E Midwest, next week’s good/excellent ratings for corn and soybeans look to decline another 3-4%.

The Northern Plains of China's drought will continue to worsen over the next 10 days amid limited rainfall. Temperatures are forecasted to rise, with highs returning to the lower 100s. Last week, China’s Water Resources Ministry announced a level of Drought Emergency for eight provinces. China’s wheat crop was impacted, but summer row crops are also at risk of yield losses.

The grain trade could be sitting at exhausted washout lows from seasonally selling aggressively after the Memorial Day weekend. With the heart of the summer growing season ahead for the Northern Hemisphere, a high-pressure Ridge is forecast to return, with the three primary weather models showing a strong central US Ridge that develops July 1. You also have the Black Sea wheat losses due to the spring drought, which now could spread into their corn crop for Ukraine, along with ongoing cool/wet weather for W Europe, which will further lower 2024 world wheat production. End users are being offered a major opportunity with the recent heavy selling that will offer forward coverage. This week's break between trading days could be offering potential trading price lows.

The top U.S. oil and corn industry lobby groups are suing the Biden administration over its plan to slash emissions from heavy-duty vehicles, arguing the regulations will cause economic harm. The suit centers on EPA’s new emissions rules for semi-trucks, buses, and other heavy-duty vehicles from 2027 to 2032 in a bid to cut 1 billion tons of greenhouse gas emissions through 2055. “The EPA is forcing a switch to technology that simply does not presently exist for these kinds of vehicles – and even if it were someday possible, it will almost certainly have consequences for your average American,” said Ryan Meyers, senior vice president, and general counsel for the American Petroleum Institute (API). The National Corn Growers Association, the American Farm Bureau Federation, and the Owner-Operator Independent Drivers Association joined the lawsuit.

Live and feeder cattle trade drifted Monday after last week’s sharp gains, and the cash market started out its typical quiet trade for the week. Last week, dressed year prices by sales type were mixed. Negotiated sales marked the best weekly gain, up close to $5, and were $9 higher than a year ago. Negotiated grid sales were $2 higher for the week and $14 higher than a year ago. Forward contracts sales were down $1 for the week but up $35 from last year. Meanwhile, formula-based sales were down more than $1 for the week but were $4 higher than last year. Negotiated sales have been above formula sales now for 8 weeks.

Last week, packers purchased a strong 96,000 head of cattle, including 22,000 head “with time.” That could reduce packers’ willingness to bid for cash cattle again this week actively, especially given record carcass weights for this time of year. But feedlots also won’t likely be in any hurry to move cattle at lower prices. Combined with USDA’s Cattle on Feed Report on Friday afternoon, this sets the stage for lengthy cash cattle negotiations. Resistance on August cattle is the March highs in the 184.50-185.00 range. Gaps on the chart to the downside near $180 would be retracement targets.