Crude oil and China drag grains softer overnight.

This morning’s grain trade is lower across the board, led by the soybeans, as favorable South American weather and the sharp collapse in crude oil overnight weighed heavily on the biofuel pricing side of the grain trade. China’s stock market was sharply lower overnight due to its inability to boost consumer demand, and it has commodity traders with a bearish mentality. Comments from Israel late yesterday assured the US they would not attack any energy or nuclear facilities in Lebanon. This had crude oil down as much as $4.00 overnight before recovering mildly from overnight lows.

China’s mainland CSI 300 stock index fell 2.7% overnight to 3008.56, while Hong Kong’s Hang Seng Index was down 34%, ending at 20,003 19. China posted disappointing trade data late Monday, with exports rising just 2.4% while imports rose .3%, and both were well below expectations. China’s inability to boost consumer demand is at the forefront of the world’s largest raw material importer’s needs and cannot fend off deflationary price trends. This has led many to think that China’s corn, wheat, and soybean imports will be well below in recent years, and the current USDA forecast on soft domestic grain demand and farm gate prices is below the cost of production.

Today, the USDA will be open following the Columbus Day holiday on Monday and will release their daily export sales totals, weekly export inspection data, and crop progress reports. US farmers should be nearly 70% complete on their soybean harvest, with corn in the low 40% category. Another week of active harvest is forecasted with a dry Midwest forecast. NOPA will be out today with the September Crush Report with historically low soyoil stocks expected.

Turkey is relaxing its ban on wheat imports, allowing 15% of mill wheat to be imported while 85% must come from Turkish supplies. The relaxation is said to start today, which could allow the return of Black Sea wheat imports. Russian wheat has already been imported and held in bonded Turkish warehouses and is currently to be sold at higher domestic prices. Turkey is trying to support its domestic farm income amid low international prices.

Cattle futures were firmer throughout yesterday’s session but settled with modest gains. Nearby October live and feeder cattle contracts were bit lower to start the week as October cattle did receive 10 deliveries that were retendered from Friday. The cash feeder Index started the week $0.56 higher at $250.61 and was above all feeder cattle futures contracts. Negotiated fed cattle markets await direction this week after last week’s higher trade. The early week outlook is firming with tightening fed supplies and, again, a better box beef price on Monday. The choice cutout picked up $2.10 and select was higher by $0.38.

Last week Packers bought 92,611 head on a negotiated basis, with 74,479 four 1-14 day delivery and 18,132 head for 15-30 day delivery. Despite poorer estimated slaughter margins, this was the largest week of negotiated buying since mid-June.