***** Grains are mostly slightly higher to start the day; soybeans up 7-10, wheat up 4-5, and corn up 1-2.
The lack of significant change in the crop condition ratings, combined with the end of panic liquidation to lift the grains in the overnight trade. The trade had expected the good/excellent rating to rise 1 point, but the new weekly data left it at 62%. The corn rating did rise 1 point to 70%, but the industry has generally been a little more optimistic regarding its potential than it has for soybeans. They g/e rating for spring wheat increased 1 as well to 71% g/e. Harvest for that crop has started in the PNW; there are no repots so far in the N. Plains, but it’s close. We have heard of some corn harvest in Arkansas, but it was early plant and still wet at 28%. It was likely headed to a livestock operation.
Chinese stocks were said to be lower again early Tuesday. There’s some talk the equity break there has forced some liquidation of commodity positions to shore up equity accounts, adding the commodities recent downward spiral. There are also reports some funds are shifting money inside the commodity matrix in favor of agricultural markets.
The 6-10 day outlook is mostly normal/cool and normal/wet across much of the Midwest. The South stays hot but has moisture. And the N. Plains could be a little dry. Confidence numbers on the forecast are high. The 8-14 day is similar, except cooler across the north, while the South remains hot.
We are starting to see more talk about the looming USDA report, but numbers are still not well defined. But it does look like the trade is thinking yield potential for corn and soybeans is below the trend yield numbers the USDA has been using, soybeans in particular. Not many are talking about the FSA acreage numbers that follow, but they could be important to soybeans in particular.
The forex trade is waiting on the comments to follow the 2 day Fed meeting to start today. Everyone remains focused on the timing of Fed rate increases, with the possibility they could come in September. They may get a sneak peek at what the 2nd qtr. GDP numbers that will be released Thursday to guide their timing.
***** Cattle should start steady/weak; lean hogs mixed/lower.
Wholesale beef is slightly higher; pork is steady/firm. Cash cattle will likely continue a defensive trade this week. Cash hog prices should be steady/lower.
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