Spring wheat leads overnight grain strength, soybeans soft.
Grain futures are mixed this morning, with the wheat trade firmer. Spring wheat held the best gains yesterday/overnight on drying in the Canadian prairies. Soybean prices pushed lower overnight as VP nominee JD Vance, at the Milwaukee convention, chastised the Biden Administration for supporting permanent normal trade relations with China, which has devastated his community in Ohio. This reignited the fear that the optics for Chinese exports are worsening when exports have been almost non-existent anyway under the Biden administration.
Wheat prices were firmer on growing confirmation of French and German wheat quality and quantity concerns following months of cool/wet weather. The ongoing heat and dryness across the northern US Plains and Canadian prairies have caused the Canadian spring wheat crop to decline due to a lack of meaningful rain during its reproductive phase. Wheat is anticipated to gain on summer row crops, with spring wheat being the best leader until rain arrives in forecasts.
The USDA has forecast that China will import 109 MMT of beans in the 2024/25 crop year, and with their pork market at the best prices since 2022, profitability has returned to China’s vast hog sector. China cannot secure its entire soybean import needs from Brazil in the 2024/25 crop year, and US soybean purchases by China are forecast to be at 20 MMTs or more. China has been slow to initiate its new crop purchase program, and it’ll be interesting to watch if China’s pent-up new crop demand kicks into high gear following the Republican convention. If China fears increased US tariffs in February March 2025 from a new Pres. Trump, then it has a window of opportunity to get buying.
It has been reported that the US Clean Fuel Alliance America has threatened a lawsuit against the EPA if the agency fails to announce renewable fuel obligations for 2026 by October 31. The APA has strongly hinted in its semiannual regulatory agenda that it will delay that decision until March. The US Clean Fuel Alliance America wants the agency to get RVOs back on track and has additional litigation authority following the US Supreme Court’s Chevron decision a few weeks ago. This opened up US federal agencies to court litigation and binding decisions.
Ukrainian weather has a few hopeful showers in the forecast that will fall across its drier crop areas in the 6-10 day window. Until then, over the next five days, extreme heat and dryness will persist, putting additional stress on the corn and sunflower crops. Along with limited rain and dryness in the Western Canadian prairies, dryness also will befall the N Plains and NW Midwest over the next 10 days. Climate guidance suggests that the Dakotas and NW Midwest are at risk of rising temperatures and limited rainfall with an Eastern progression of a Ridge due in 9-10 days. Meanwhile, the Midwest is caught in a mild/humid weather pattern due to a Bermuda high-pressure Ridge across the SE US pushing golf moisture northward.
Live and feeder cattle futures pushed higher Wednesday, with a steady opening anticipated this morning. August live cattle helped lift the markets upward as the market anticipates potentially a higher weekly fed cattle trade and its steep discount to the cash. Light cash trade was quoted in South at $188, which was near steady with last week, while the light dressed trade in and E was $3 higher at $315. Significant trade volumes have yet to develop, with asking prices in the north quoted $200 and offers in the South at $190.
Cattle slaughtered midweek totaled 360,000 head, which is 6000 more than a week ago but 9000 head fewer than last year. Box beef prices moved lower again yesterday, with Choice off $1.10 and Select dropping $3.15. The choice cutout value is now $11 under last week’s high but is $16 higher than a year ago and at a record price for mid-July. The select value was $26 higher than a year ago and at a record seasonal high.