By: NATHAN STUEDLE
GRAINS:
September corn closed up 2 1/4 cents and December corn was up 1 1/2 cents. September soybeans closed down 6 1/4 cents and November soybeans were down 6 1/2 cents. September KC wheat closed up 4 1/4 cents, September Chicago wheat was down 1/2 cents, September Minneapolis wheat was up 1/2 cents.
Row crops were mixed Thursday to close the month of July with short-side grain traders booking some profits in the corn and hard red wheat markets, while the soybean complex was under pressure with the exception of soymeal, with soybean oil taking the brunt of selling pressure for Thursday ahead of month end and pressuring the oilseed market as result. Outside markets were mixed across the board as well, with equities slightly higher but energies lower as traders are attempting to sort out the potential outcomes of Friday's deadline for the reciprocal tariff pause, as well as a looming Aug. 8 deadline President Trump has given Russia to end the war in Ukraine. In macro news for Thursday, the Fed's preferred inflation gauge, the Personal Consumption Expenditure Index, came in hotter than expected for June with the core rate (excluding energy and food) pegged at 2.8% annually. This will certainly add an interesting layer to the rate discussion following Wednesday's Fed decision to hold the target rate steady for a fifth consecutive meeting. The CME FedWatch tool has pivoted now to penciling just one cut in 2025 and favoring the October FOMC meeting.
LIVESTOCK:
The live cattle complex has waved its white flag today as traders seem uncertain on what to do with the onset of a 50% tariff affecting beef and cattle imports from Brazil, which goes into effect in seven days. Cattlemen don't mind the fact that Brazilian beef and cattle could face a greater tariff, as truthfully, they want their own product to be marketed as opposed to the imported products. However, where the tricky part of this matter comes into play is in beef prices, and how consumers are going to react. We all know that President Trump uses tariffs as a way to get foreign leaders to the table to negotiate, but if for whatever reason the Brazilian government doesn't budge, domestic consumers could be affected as beef prices would likely trade higher because supplies of beef would become even more limited. Needless to say, it's a situation that we need to keep a very close eye on. If the U.S. beef cow-herd wasn't at a 62-year low, the story would be entirely different. Again, most cattle producers wouldn't mind the fact that foreign beef was taxed at a higher rate than in years past. There was a small (extremely small) volume of cattle traded in Kansas on Wednesday at $235, which is $2.00 higher than last week's weighted average, but no more sales have transpired today. Bids of $235 are currently being offered in Kansas again, but no more cattle have traded hands. Packer demand should improve at any point in time now. Asking prices are firm in the South at $236 plus and in the North at $390.
Because of the announcement that a 50% tariff could go into effect on beef and cattle imports from Brazil -- the feeder cattle complex traded sharply lower into the closing bell, thanks to the morning's announcement. This decision is solely being made because of technical uncertainty, not because it reflects what's going on in the countryside.
The cattle complex may have endured some pressure, but the lean hog contracts seemed to find some more technical footing in the contracts, which helped the market trade mostly higher. Unfortunately, it's not because of stronger pork demand or higher cash sales, but solely because of the added stability in the futures complex.