LEADING OFF: Grain and oilseed futures are higher this morning. Corn is up 5 cents at the morning break, while soybeans are up 6 to 8 cents. Continued Chinese soybean demand, and possibly some concern about conditions turning too wet in parts of the Midwest are supportive. These markets also have support from wheat, which is rallying and up more than a dime in Chicago as Russia has flatly rejected a ceasefire proposal in the Black Sea region. Cotton, after falling the past couple of days, is up 70 points.
Outside markets are largely subdued, with crude oil down slightly amid a lack of fresh news out of the Middle East, while gold is up slightly. Major U.S. stock indexes are mixed this morning. The dollar index is down more than 0.2%. In what has generally been a quiet week, the biggest economic news has been both the CPI and PPI reports indicating moderating inflation in July. That has reduced expectations of a Fed rate hike this year, which has helped weigh on the dollar. The CME’s Fed Rate Watch tool had seen a 44.4% chance of a rate hike at the Sept. 16 FOMC meeting as of a month ago, but that likelihood is now at 30.6%.
Tyson Foods is further contracting and restructuring its beef business amid a historic domestic cattle shortage. The meatpacking giant is abruptly shutting down its Joslin, Ill. slaughter facility, which processed around 3,000 head per day and employed 2,500 workers. It also plans to sell its Pasco, Washington plant, capable of 2,000 head daily, and is closing a Utah plant as well. The company said it will consolidate its core operations across larger facilities in Nebraska, Kansas, and Texas.
CORN: An active weather pattern continued in the Corn Belt yesterday, with scattered rains across the heart of the region and totals of more than an inch in a couple spots in Iowa and Illinois. The rains have caused some flooding in Illinois and Indiana, and the forecast calls for the active pattern to continue. Regular rains are expected into the weekend, and then another system is possible at mid-week next week. Temperatures will remain mostly moderate, with high temperatures in the 70s or low 80s across much of the heart of the Corn Belt. The pattern is different to the south and west however, as World Weather Inc. sees continued heat and dryness across the southern Plains, the Delta, and increasingly parts of the southeastern U.S.
The French crop continues to wither amid the historic heatwaves seen in the country this summer. Today France AgriMer put the good/excellent rating for the French crop at 29%, down from 31% the prior week and 65% a year ago. The EU in late July projected the corn crop at 51.9 MMT, the smallest since 2007, but expectations have fallen even further since then. The crop has not been smaller than 50 MMT since the 1990s.
SOYBEANS: USDA reported an export sale to China this morning for the fourth day in a row. The sale of 136,000 metric tons is for the 2026-27 marketing year. China’s Sinograin continues its soybean auctions to make room for U.S. beans. It will hold its fourth auction in the past month on Aug. 19, auctioning 360,000 metric tons. The announced auction will offer soybeans from 2022, 2023 and 2025, Reuters aid.
Advance export sales for next marketing year remain strong thanks to continued significant Chinese buying. Advance sales reached 372.3 million bushels as of August 6, 115% above a year earlier. China’s known new-crop purchases are at 167.4 million bushels. Sales to unknown destination for next year of about 132.2 million bushels are also likely mostly to China. China still has a long ways to go, though to fulfill its commitment of buying 25 million metric tons (about 919 million bushels) of U.S. soybeans in calendar 2026.
WHEAT: Traders continue to try to make sense of the varying and sometimes contradictory headlines throughout the week about the situation in the Black Sea. This morning the main headline is bullish: Russia has dismissed the idea of a ceasefire with Ukraine in the Black Sea, saying it saw no reason for “half-measures.” The Foreign Ministry accused Ukraine of “brazen acts of terrorism.” A spokeswoman added: “At the same time, we see no signs of improvement in the situation and, consequently, no grounds for half-measures that merely grant the Kyiv regime a temporary breathing space.” Ukraine had reportedly made an offer on a halt to civilian targets in the Black Sea, as both sides increasingly target grain export infrastructure. Russia this morning in its statement said it would not be feasible to return to the agreement from early in the war that allowed grain to flow out of the region.
In export news, the Taiwan Flour Millers’ Association purchased an estimated 97,200 metric tons of milling wheat to be sourced from the United States in an international tender, European traders told Reuters. The purchase involved various wheat types bought in two consignments to be shipped from the Pacific Northwest this fall.
LIVESTOCK: Live cattle futures sold off for the second day in a row Thursday, losing $2.50 to $4.35. Some of the pressure may have been due to the Tyson closure noted at the top – while that news didn’t break publicly until the Wall Street Journal reported on a Tyson memo after the market closed, rumors were likely circulating during the session. Weaker Plains cash trade was also a negative factor. USDA reported trade of 10,267 head in Nebraska as of midafternoon, bringing weekly sales to 18,715 head. Trade was mostly $360-$362 on a dressed basis with some live trade at $228-$230, down $2-$4 from last week.
Lean hog futures fell 20 cents to $1.70 on Thursday under pressure from technically driven selling and renewed demand concerns. October futures fell $1.43 to $82.13. Clearly the lean hog market has still not confirmed a bottom from a technical standpoint and in fact deferred futures appear to be breaking out on new downward moves. Most-active October lean hogs posted their lowest close in 5 sessions, but still have some important support below them at $81.33 and $79.78. However, February lean hogs fell through their July-August lows Thursday to a new contract low of $76.18 and a new low close at $76.25. Based on the recent chart pattern, February now has a potential downside objective of about $72.90. The market is now in a fifth wave to the downside, though, which makes us leery of re-establishing hedge protection. After being higher at midmorning, the composite pork cutout value wound up another $1.23 lower at $98.92, which certainly won’t ease demand worries.
