A mixed trade for the start of Independence Week.

This morning, there was a mixed grain trade as overnight action traversed higher and softer pricing. Weakness in the overnight trade was found to be short-covering interest, while corn continued to see pressure from Friday’s acreage and stock increases. The Black Sea drought continues with this intensity, which will bring about yield reduction risks, while receipted spring grain crops, which include wheat from the May frost, are also at risk. At some point, the world needs to acknowledge the large losses of exports from these areas, which will produce improved export demand for US wheat and corn from August forward.

The EIA reported late Friday that US renewable diesel capacity expanded to a record 4, 129 Bil gallons, up 272 Mil gallons from March. US soy oil used to produce biofuels expanded to 1.070 Bil pounds in April, which was up 44 Mil pounds from March, and up 143 Mount pounds from last year. Last week, six US senators asked the Biden administration to investigate China’s dumping of tainted used cooking oil blended virgin palm oil and a portion of used cooking oil. A response from the Biden administration is expected in the next 30 days. Soybean oil futures are gaining on the expanding demand this morning and record net manage short position of over 108,000 contracts.

Saudi Arabia bought wheat again as their General Food Security Authority secured 235,000 MTs of optional hard wheat on the weekend tender. The purchase concluded on a delivered basis for September/October at $259.75-266.18, depending on the port. The purchase was less than the original tender, likely due to the delivery price being higher than expected.

Due to record import demand by China, Brazil exported a record amount of 15.7 MMTs of soybeans. The total Brazilian soybean export to China could amount to 12.4-13.0 MMTs. China is a price buyer of soybeans and has ramped up purchases as the market has declined. The sagging Real versus the US dollar has caused Brazilian farmers to be cash sellers.

Central US weather is mostly favorable with a mixture of mild temperatures and rain into July 10. This does favor Midwest corn and soybean crops into the start of corn pollination. Saturated soils in the NW Midwest will see too much rain again and the return of flooding and ponding. Corn can only withstand 3-5 days of standing water before the days of pollination. This will likely not be acknowledged for any production losses as they occur until harvest occurs this fall. The USDA has no reasonable way of adjusting production losses for this, so they will do nothing until combines roll.

Two storm systems will impact the Midwest this week, and another will be early next week. Drier and warmer in the extended range are forecasted as high-pressure Ridge returns across the Central US. Varied Midwest temperatures the next 10 days with warming to above normal in the 10-15 day window. The forecast is favorable primarily for crops into July 10.

Last week, there was a higher close for live and feeder cattle as nearby live cattle futures rose to a record $195.65 on the expiring June contract. Expiration occurred at $193.50 versus $181.50 last year. Last week’s negotiated fed cattle trade house out into the end the week but was higher in all regions. Live trade in the north ranged from $198-200 and the dressed was at $312-315. Live sales in the South were $189-194, anywhere from steady to $5 higher, with most near $190. Box beef values were higher on improved demand and higher cash cattle prices ahead of the Independence Day Holiday. The choice cutout gained $4 on the week, and select was $1.39 higher. August live cattle sold off as June expired, creating a neutral outlook. August cattle have a chart gap from two weeks ago, just under $180.