The grain trade had seen a burst of buying overnight.

This morning’s grain trade is firmer but off overnight highs, as a risk premium was applied to reports that Russia had attacked Ukraine’s key port of Odesa overnight. This follows Ukraine’s recent incursions into the Kursk region of Russia. Concerns over rising Black Sea transportation costs have returned as war uncertainty has returned.

Next week is the Pro Farmer Crop tour and attention will be drawn to see what they find in the fields. Since their routes are confined to the prime Corn Belt from western Ohio to eastern NE, SW South Dakota and Southern MN. It seems doubtful the daily findings will do anything but confirm high-yield expectations.

The Rosario Grain Exchange in Argentina estimated their corn production in 2025 at 49 MMT versus the USDA’s 51. It’s too early to say much about the South American crop sizes for the coming year, but the area's thesis is that the planted area will be down 2 million hectares from last year amid concern over leafhopper disease and the potential arrival of La Niña this fall. For now, the concern in Argentina is the spread of dryness and the need for regular rain in September ahead of early row crop planting.

Last year, during our soybean export season from September to January, China imported 22 MMT of US soybeans. And that was despite record Brazilian production. It is currently anticipated that China will again secure 20-22 MMT of US soybeans this fall and winter, as there are a few alternatives amid smaller Brazilian production and following the recent change in world price relationships that now favor US soy into January. Chinese sales are behind, but this implies that sizable Chinese buying is ahead. The 2025 forward demand via soybeans will decrease considerably if South America avoids weather issues this December-January.

The US weather forecast for the Midwest shows showers moving across Illinois on Thursday, with light to moderate rain favoring the upper Midwest on Friday and Saturday. A drier pattern follows into August 29-30 as expansive high-pressure ridging dominates the climate over the Central US Plains. The Southern and Central Plains and the Delta region are not expecting any rain in the forecast for the next two weeks. Hurricane Ernesto is not projected to land but rather to move into the Atlantic, while additional tropical activity remains absent through the end of the month.

Live and feeder cattle futures enjoyed a second day of strong gains, with a firm outlook anticipated this morning on the higher outside markets. Cash markets are quiet, even though few pens traded in Iowa at $190, which was $2 lower than last week. However, it is not enough to call it an actual market trend. Asking prices in the South are quoted at $187-188, which would be steady -$2 higher, but Packers have shown little interest in trading so far. August cattle futures are higher on the week but still under last week’s cash trade price. The outlook for the later half of this week is steady.

The Consumer Prices report yesterday showed that the Beef Price Index in July rose for the second consecutive month and gained 1.7% from June. This marked a year-over-year gain for the 15th consecutive month and was 4.7% higher than last year. The index set a record high of 430.6 in July. Retail beef prices continue to remain strong.

Today is the opening of the third day of a rally, where, in uptrends, a three-day pullback would be purchased, whereas if we are in a negative market complex, the cattle rally will stall by today, the opening of the third day.