Grain trade retreats early week gains.

Today’s grain trade has soybeans giving back half of their three-day gains and corn softening on a chance of rain across the northern half of Illinois and portions of Indiana. Chicago Wheat is firmer in strength in French milling wheat, gaining $2.00/MT overnight and also gaining on its early-week strength.

This morning, Statistics Canada released its initial estimate on crop production using the model and satellite-generated approach. For All Wheat, the crop came in at 34.373 MMTs, down from an estimate of 35.1. Canola was 19.2 MMTs, down from an estimate of 19.502. The old crop was 3.3 MMTs, slightly above the estimate of 2.91. The barley crop came in at 7.469 MMTs, down from an estimate of 8.3.

The USDA has forecasted that the annual 2024 US Ag Trade Deficit will grow by $10 Bil dollars to a record large $42 Bil dollars due to the sliding price of corn, wheat, soybeans, and US beef trade. Soybean exports are forecasted to go down $1.5 Bil at $22.9 Bill while corn drops $900 Mil to $12.2 Bil. Ag trade exports to China are forecasted to be down $3 Bil from their May estimate to $24 Bil, down $10 Bil from 2023’s exports. Mexico and Canada now make up the US's 2 largest trading partners, with China falling to third place.

Russian FOB wheat for 12.5% is bid at $216/MT and offered at $218, off $1/MT. Meanwhile, Paris French milling wheat is higher this morning by over $2.00 MTs. Malaysian palm oil futures are firmer as India is considering placing import tariffs on veg oils to prevent an onslaught of cheap supply that would harm their domestic farmers as the autumn harvest commences.

This Friday, EIA is expected to release their July Biofuel Feedstock report, with US soyoil use forecasted to rise in price and diminished used cooking oil imports. Following Tuesday’s gains, it will be key to see if the board of trade has seasonally placed a bottom ahead of the September 1st notice day. Extreme dryness across Eastern Europe in the Black Sea along with Australia and Northern Brazil are expected to offer support on setbacks. La Niña looks to be gaining strength on the bloom across the Equatorial Pacific, with further strengthening now assured over the next 30-45 days.

Hot temperatures and widely scattered showers have been occurring for the last few days before a lengthy period of dry weather develops across the Central Midwest in the first half of September. Widely scattered showers, some severe, are forecasted for the N Plains and Midwest for another 48 hours. Rain will push into the northern half of Illinois and Iowa, but important areas of both states will still be missed. Dry weather holds across the Delta and S Midwest for the remainder of the week before the Delta sees scattered showers on the weekend and early next week.

Cattle trade marked another day of solid gains on Tuesday with a firm outlook offered for this morning. October live cattle or just under the 200-day moving average, while feeder cattle reluctantly followed as corn prices advanced. Cash markets were quiet with next week’s kill likely be abbreviated by the Labor Day holiday. Strength in the board has improved the tone for this week cash trade with offers expected to be $2-3 higher.

Cattle slaughter was behind last week despite the upcoming holiday. Box beef prices were sharply mixed on Tuesday, with the choice value off $3.93 while select gained six cents. The choice/select spread has narrowed to $11.72 choice premium. The nearby feeders/fat spread top in early July at a $76 feeder premium and has since fallen $17. Deferred spreads for October/November are just below the nearby, but the nearby spread is likely to move back toward the 2023 low at $45. October live cattle have resistance at $181 and $183. The cash market has been coming down and the seasonal outlook from September into mid-October is steady to lower.