Grains mixed to start the new month.

This morning’s grain trade has wheat futures following through with yesterday’s reversal strength while corn and soybeans soften. Too much rain in northern China and in Russian spring wheat areas is prompting support for wheat as those areas endure another two weeks of abnormal rain, with accumulations of 140-220% of normal rain adding quality and quantity risks to those crops. Chinese summer row crops cannot be faring well following their May/June drought and then reverting to inundating July through early August rainfall.

It’s been confirmed by NASS that they will incorporate their adjustments to crops seated and harvest acreage accordingly being calculated using the Farm Service Program participation data. Interestingly, in years where leftover seeded acres exceeded 14 million acres in the June report, the final acres of corn and soybeans combined were down “more” than two million acres. This should create the expectation of a 1 million acre drop in both corn and soybean acreage with adjustments to carryout’s accordingly. If corn acreage is adjusted 1 million acres lower and you have a record yield of 185 BPA, your 2024/25 corn stocks will still be under 2.1 Bil Bu. If you take into consideration the USDA is off on usage by a factor of 300 Mil Bu (exports, ethanol usage), you have a carryout near 1.8 Bil Bu on a 185 BPA yield. US corn yields better not disappoint in the October crop report.

Deliveries for August soybean futures were at 41 contracts, with only 15 contracts of soy oil being retendered. Doorman and StoneX were the stoppers for the oil receipts.

This morning, Paris Milling Wheat is higher again by $3.00/MT, following up on its strong performance yesterday. Russian FOB September wheat is now bid at $223, and $224/MT is offered.
Yesterday, Federal Reserve Chairman Powell hinted that the Fed funds lending rate would be cut in September as inflationary risks have cooled and the US labor market has become more balanced.

This morning, the Bank of England lowered its lending rate by .25% to 5%, its first rate reduction in four years. The US 10-year bond yield has fallen to 4.05% and is likely headed lower.

Hot temperatures persist across the Plains and S to be Midwest, with highs ranging from the mid-90s to lower 100s for another 5-6 days before cooler air is dragged southward from Canada, which will help improve rainfall chances. High temperatures across KS/OK/TX were again extreme on Wednesday, with highs ranging from 98-109°. Strong storms across southern Nebraska/Kansas produced 1-5″ hail with wind gusts of 70 mph. Minnesota also endured hail of 1-4″ that produced property damage and crop loss. Those rains came at a cost, producing moisture of traces to 1.25″. The GFS model this morning shows below-normal rainfall west of the Mississippi River. Ridge-riding thunderstorms will occur over the next 48 hours, with drier weather starting Friday. The warm/dry weather trend lasts until August 7 before cooler temperatures push southward from Canada, with improved rainfall chances.

Cattle futures closed softer yesterday, while feeder cattle bumped higher late into Wednesday's close. A negotiated cattle trade is anticipated to break out sometime today, with asking prices quoted at $190-192 in the South, which would be steady-2 higher.

Cattle slaughter at midweek is 360,000 head, unchanged from last week and 9000 head less than last year. Box beef values on Wednesday were mixed but still higher for the week. Choice cutout value picked up $0.29, while Select was off $122 at $300.16. Both values are still record prices for the end of July.

It’s become obvious that beef demand has slowed, given the poor response of the cutout to the kill cuts. It’s that time of year when demand falls off. The cuts and slaughter have been big enough and long enough that the industry’s beginning to slowly backup numbers.