Pro Farmer Crop Tour gets underway this morning.

Grain futures are mixed after a higher start for row crops overnight, and wheat is softer. A dry and warm weather forecast is offered for the Midwest and Delta along with the Central Plains over the next 10-12 days, with showers forecast for the Northern Plains and the days that close out August. Some price premium is coming back into vogue on the potential for US soybean yields to slip from the record expectations as yields are likely to get caught across the Delta due to acute dryness for the past 4-5 weeks in the tops coming off in the Midwest if dryness persists beyond the end the month. 10% or 460 Mil Bu of beans are produced in the Delta states. Corn and soybean good/excellent condition ratings are expected to decline 1-2% this afternoon and likely again next week.

August wheat exports out of Russia are forecast at a record or near record 5.3-5.5 MMTs on active demand even without Turkey as an importer due to its current ban. The sliding Russian Ruble has helped source wheat from producers, but export margins are thin. Russian FOB cash wheat is offered steady at $219/MT, but there are reports of firmer cash trade. Meanwhile, the Russian spring wheat harvest is perceived as having excessive rain, which looks to trim Russian 2024 wheat production in the final crop under 82 MMTs.

In the doesn’t seem to matter category, the situation between Ukraine and Russia continues to escalate. Over the weekend, Ukraine made clear their intention behind moving into the Kursk region was to not only take the war to Russia but also to create a ‘buffer zone,’ making it more difficult for Russia to attack the Sumy region in Ukraine. Ukraine blew up a key bridge in the Kursk region over the weekend, hitting two more targets shortly after. Russian military experts say the loss of the bridges will be a blow to Russian forces, limiting access to supplies and taking away a key evacuation route. Interestingly, Kursk accounts for around 4 million acres of agricultural production–or was expected to in 2024. Of that, 6 million metric tons is grain, 5.2 mmt is sugar beets, with 1.4 mmt of oilseed production. For its part, Russia has ramped up its own attacks on Ukrainian targets, though with Ukraine requesting permission to strike further into Russia with Western weapons, the mood is tense.

The Pro Farmer Crop Tour will start this morning with social media posts discussing yield sightings. The Tour starts on the opposite ends of the Midwest, including Ohio to the east and NE/SD to the west. The industry expects record-high year and soybean pod counts, but it is a question of degree.

Disappointing economic data continues to flow from China, where already poor consumer sentiment seems to be getting worse. Jobless rates, falling housing prices, and a surge in the outflow of foreign capital have many experts and analysts calling on the central government to roll out some stimulus. Just last week, an article in the state-run China Daily suggested that direct-to-consumer payments are the only solution to the economic downturn.

Despite China’s economic woes there is talk that China has returned to seek additional US soybeans overnight for October/November/December. Whether the Chinese demand has any ties to the start of the DNC and Chicago is unknown. Politics is always a feature of world grain trading for China but the coming US presidential election has caused greater Chinese scrutiny of both political parties.

A dry Central US weather pattern now looks to hold across the Central US. Little to no rain is forecasted in the S and C Plains, while the Delta and Midwest also have heat and dryness that will cause a rapid fall in soil moisture and push crop maturity. It’s pushing crop maturity that can take the tops off an exceptionally large forecasted crop. Central US temps will range from the 80s to lower 100s, with any extreme heat based on a line from Texas to Tennessee. The dry and warm weather will push the need for rainfall during the first half of September. The extended range forecast beyond 10 days is highly changeable with little run-to-run consistency.

It was another lower weekly close for live and feeder cattle last week, with a steady opening anticipated this morning. Last week’s negotiated fed cattle trade was lower in all regions with the north/south spread narrowing as Northern prices fell faster. Live sales in Nebraska were mainly $3 lower for the week at $190, while the dressed trade was $3-6 lower at $298-301. Live sales in Iowa were quoted $1-4 lower at $187-191, and dressed sales at $296-298 were off $6-8. Southern plains sales were at $185, which was off $1. Sales in all regions were above a year ago, but the five-area average is estimated at just $4 over the same week in 2023.

Friday’s Commitment of Traders report showed that for the week ending August 13, funds sold 8,910 contracts against commercial buying 8,311. The Tuesday versus Tuesday price change was a positive $2. Cattle futures ended last week lower. The only positive thing that can be said is that the previous week’s lows were held in the live cattle trade. October live cattle have now developed resistance at 182-183.