Grain futures lower Friday morning.

Grain futures are softer this morning, with wheat giving up an early morning rally, while French milling wheat still holds gains of $1.25/MTs despite disappointing EU crop results. Meanwhile, corn and soybean futures drifted after a minor bounce in the last few sessions as the trade heads into the weekend ahead of the Pro Farmer crop tour next week. Producer movement continues in old crop grain as the US cash basis sagged on Thursday, with corn drifting a penny and soybeans off two cents while wheat was steady/up to cents/Bu.

Germany, Europe's second-largest wheat producer, reported that its wheat production will fall to 18.76 MMTs, according to co-ops. This is down 12.8% from last year due to excessive rainfall, which also harmed crop quality. The wheat harvest is projected to be the smallest since 2018 and comes on top of 10-11 MMTs of production losses in France. Additional cuts and EU and world wheat production look to be ahead from the USDA and other primary statistical agencies, with the USDA being the slowest.

The spring wheat harvest in Russia is stalled due to excessive rainfall. The harvest in the far Western portion of the country will not have any issues as drought maintains its grip on that area. However, dry weather is needed in the farther eastern areas of Russian wheat as crop quality and quantity reductions are ahead there as well, admitting months of excessive rainfall. The need for dry weather across the Russian spring wheat areas is immediate, with harvest just getting underway.

In the annual EIA report on US biofuel capacity, it was shown that five new renewable diesel plants opened in the last year, the EIA report offered that biodiesel plant capacity held steady at 2.090 Bil gallons, with 56 plants in production. Combined the US has nearly 6.5 Bil gallons of green diesel capacity from 78 plants. US plant capacity continues to rise but plant capacity utilization has declined on sagging margins. Boosting US output by 44% to 4.33 Bil gallons annually with 22 plants in production.

Ukrainian FOB corn is offered at $5.16/Bu, Brazilian corn at $4.84/Bu, and the US Gulf price is $4.52. Russian wheat is steady at $218/MT to end the week. Brazilian farmers are looking at margin losses ahead of the new crop seeding campaign with soil moisture at a decade low. Values are cheap and South American production may not increase in acreage basis as anticipated this fall.

Showers occur across Midwest the next 24 hours before below normal rainfall trends develop into the end of the month. Midwest crops be able to endure the lack of rain amid recent showers, but another shot of March will be required early September to bring crops into a favorable finish. Hurricane Ernesto is not forecasted to make landfall but moves back out into the Atlantic with additional Tropic activity absent into late month.

Live and feeder cattle prices turned lower on Thursday after a two-day bounce and have a steady outlook anticipated this morning. Cash trade for Thursday was quoted $190 in the north which was $3 lower for the week and dressed trade was at $298 off $6. Offers in the South are quoted at $187-188, which would be steady $were to higher.

In Nebraska dressed sales were $10 under the record high that was scored in early July and back below the previous record that was scored in June 2022. This has been the largest five-week correction since last December. Even though cattle prices on the board were weaker and on the cash trade, box beef traded higher on Thursday, with choice gaining $2.06. This is more than $before higher for the week at $317. Select was up $1.53, a gain of $1 three for the week at $302.03. The board apparently wants to maintain wide CME discounts out of fear that consumer demand is waning at recent high prices.