7.17.26 Tredas Weekly Recap

Weekly Action:

Sep26 Corn up 5.25 to $4.4475

Aug26 Beans up 23.25 to $12.045

Sep26 Chi Wheat up 42.5 to $6.8275

Sep26 KC Wheat up 56 to $7.3225

Oct26 Cotton down 288 points at $0.7704/lb

Aug26 Hogs up $2.65 to $101.65

Aug26 Fats down $10.775 at $224.425

Aug26 Feeders down $8.65 at $345.95

Dec26 Corn up 6.5 to $4.675

Nov26 Beans up 12.25 to $12.03

Sep27 Chi Wheat up 37.5 to $7.2175

Jul27 KC Wheat up 49 to $7.5925

Dec26 Cotton down 291 points at $0.7863/lb

Grains:

Corn was steadily higher again this week, notching out a mixed week of trade. Grains gapped higher at the open Sunday night on renewed drought fears, but as the week continued, so did forecasts. Some slight relief brought the grains back down, but renewed fighting in the Middle East and Russia/Ukraine spurred a mid-week rally to keep things exciting. Tightening world stocks has been the talk for a few weeks now, and with Brazil upping their ethanol blending to 35% and less-than-favorable weather for the foreseeable future, corn futures are trying to find their true value.

Beans continued their trek higher this week amongst mixed trade. New crop beans finished above $12, which marks the first week this year beans were able to close above this level. Chinese demand remains steady, still without a concrete trade agreement in place. In a nice surprise, Mexico booked 256,634 metric tons of soybeans for delivery during the 26/27 marketing year as well. US exports for the upcoming crop are well ahead of where they were last year.

Wheat had itself a solid week with renewed war premium out of an aggressive Ukrainian/Russian escalation. Previously, Russian and Ukrainian strikes were based primarily on military logistics, trying to handicap each other as it comes to fighting. This week, blows were exchanged between the countries, and the target was merchant vessels. Ships in the Black Sea and Strait of Azov were struck, further hindering already tightening world supplies. Dec Chicago wheat ran from a $6.50 close on Monday to closing over $7 during Friday’s session. KC wheat remains a premium, going from $6.80 on Monday to $7.48 by EOD Friday.

Livestock:

The cattle complex continued its selloff, pushing through moving averages on its way to new YTD lows in many of the deferred contracts. Live cattle futures haven't seen but two positive days of trade in the last four weeks. Feeder cattle haven't been much better. The cash trade generally held together better than the futures market with Nebraska/Iowa cash markets still in range of last week's values. That's a positive sign, but the focus remains on the direction of futures markets. Visually, the cattle charts are oversold and appear due for a bounce but failed to catch traction today, weakening further into the afternoon. USDA will release the July Cattle on Feed Report a week from today on Friday the 24th.

Lean hog futures continued their march higher after a rapid selloff. Mixed trade trended positive, with August futures closing back above $101. Deferred months did not rally as hard, but still trended positive. The inverse between August and October is now $13.725. Cash and cutout values also trended higher throughout the week, paired with strong packer demand.

Weather: Hot, dry weather continues to steal the show as it comes to the weather. Throughout the week, runs of the GFS forecast showed some marginal improvement for the next 7-10 days, but not nearly enough to make a massive difference. Scattered rainfalls fell throughout the plains, slightly cooler temperatures are expected, but late July into August is still expected to be exceptionally warm and dry. Below is the latest iteration of the UNL Drought Monitor map. Most arable land in Nebraska is under drought, with the rest of the corn belt showing near-normal to normal conditions.

Economy:

This week's Fed commentary points to modest economic growth and a continued uptick in domestic jobs, yet price pressures have only seen slight easing and are still running above target levels. Geopolitical risks continue to be a factor for inflation, but the overall economic activity seems to be resilient enough to fend off fears of recession. Persistent inflation is leading to 'higher for longer' interest rates, keeping financing costs higher for producers, while supporting the US dollar, which pressures export competitiveness. Recent price swings in energies due to the re-kindled US/Iran tensions feed directly into the ag markets through diesel, fertilizer, and production costs. While the economy is still expanding, agriculture is somewhat caught in the middle ground where input costs and rate pressures remain an uphill battle, but strong world demand and tighter balance sheets provide a layer of support for farmers.

Something That Probably Means Nothing:

Over the past several months, our solar system played host to a visitor from another one. A comet named 3I/ATLAS — only the third object ever confirmed to have come from beyond our solar system — came screaming through at roughly 137,000 miles per hour, made its closest pass by Earth just before Christmas, swept past Jupiter in March, and is now headed back out into deep space, never to return. It had been drifting through the galaxy for billions of years before it happened to thread through our little corner on its way to somewhere else. We got one look, and that was it.

Quote of the Week:

"It's not the will to win that matters—everyone has that. It's the will to prepare to win that matters." — Bear Bryant

Have a great weekend!