FEEDERS FALL 3%; WHEAT LEADS GRAINS LOWER

Cooler August forecasts hit beans and corn; Mexico cattle import news drives the feeder breakdown.

🧵 TUE UPDATEWill today's USDA crop progress ratings confirm the heat premium in beans, or reset grains lower?

🎯 THE TAKEAWAY

Feeders broke on Mexico cattle news; the supply repricing is real, not a one-day flush.

Feeders dropped hard to $331.27, down 3% on the overnight, and that is the story today. The US reopening Arizona and New Mexico ports to Mexican cattle, announced Friday, just repriced the feeder supply curve in one session. Meanwhile, cooler August forecasts and profit-taking knocked beans to $12.08 and wheat gave back 8 cents. Monday's crop progress gave the bulls nothing new to work with.

Corn$4.53

Soybeans$12.08

Wheat$6.53

↺ YESTERDAY'S CALL DIDN'T

Called feeders down toward $328.00. Feeders closed at $331.27 -- moved the right direction, but never reached the level.

Mexico border news did the work; feeders dropped 3% and the direction was right. The $328 target stayed just out of reach. Call gets credit for the thesis, not the number.

🐄Feeders Break HardHIGH CONVICTION

📡DRIVERUS plans to resume live cattle imports from Mexico via Arizona and New Mexico ports of entry.

↺Cattle: Mexico border news confirmed; feeder breakdown accelerating as called.

Feeder cattle fell to $331.27, down 3% on the session, the overnight surprise flag earning its keep: this is the Mexico border reopening doing its work.
USDA's announcement Friday that Arizona and New Mexico ports would reopen to Mexican cattle imports hit the feeder supply math directly; more cattle coming means lower prices at the auction ring.
Live cattle held better at $224.72, down 1%, but feeders leading lower by 2 full points says the market is pricing the supply shock into placement costs, not finished weights.

Feeders are pricing new supply, not yesterday's scarcity. The spread between feeders and live cattle is narrowing fast.

🌽Grains Give BackMEDIUM CONVICTION

📡DRIVERCooler August forecasts for key growing areas; Missouri and Minnesota crop condition improvements in Monday crop progress.

↺Beans: profit-taking call from yesterday's 3 PM watch played out; beans fell instead of running.

Wheat led lower at $6.53, off 8 cents, the biggest mover in the grains complex; corn eased just a penny to $4.53 and beans gave back 4 cents to $12.08 on profit-taking and a cooler August forecast.
Missouri crop conditions improved week-over-week, an unusual late-July positive that Brownfield's StoneX contact flagged as rare, while Minnesota corn sat at 77% good-to-excellent, well above national average.
No weather premium getting priced right now; the forecast cooling into August is doing the opposite.

Crops are healthier than the calendar usually allows. No weather premium until a heat event materializes.

⛽Energy Drifts LowerMEDIUM CONVICTION

📡DRIVERFourth night without Iran-US attacks; Red Sea tanker traffic hits multi-month low as Houthi threat holds.

WTI crude eased to $81.31, down 0.3%, as Iran-Hormuz tensions, with the Strait of Hormuz premium that built since early April now deflating on diplomatic progress, held calm for a fourth straight night.
The Red Sea story is running the opposite direction: Houthi activity is keeping tanker traffic at a multi-month low near Egypt, and Saudi Arabia is weighing a $5 per barrel surcharge on Asia-bound crude sold off through Suez.
Two stories, two directions; net effect on WTI is modest drift lower.

Hormuz premium fading, Red Sea cost rising. Crude caught between them; neither story is done.

🧠 THE MORE YOU KNOW

The Feeder/Live Spread Is a Placement Cost Signal

Feeders at $331.27 against live cattle at $224.72 is a $106.55 spread, or roughly a 1.47 feeder-to-live ratio. When that ratio compresses fast, as it is now, feedlot operators tighten placement budgets. The Mexico cattle import reopening is not just a futures story; it reprices every pen of calves bought at auction this fall.

📅 TODAY'S WATCH LIST

Thursday 7:30 AM CTWeekly export sales: beans under 400K MT confirms the cooler-forecast selloff was fundamentals-driven, not just technical profit-taking.
OngoingFeeder cattle: if $328 breaks, the next support is the May gap fill near $320. Mexico import volumes will set the pace.
DailyLibya oil facility situation: any confirmed production disruption puts a floor under WTI and reverses some of the Hormuz premium deflation.
Monday 3:00 PM CTUSDA Crop Progress: corn pollination rated above 70% good-to-excellent removes the last weather premium argument for new-crop Dec corn at $4.75.

📰 OUTSIDE THE PITNews not moving prices today but in the calculus.

TRADE

US Cattle Inventory Up to 94.2 Million Head

USDA puts all cattle on feed up 2% from last year, but the calf crop is down 2%. Rebuilding the herd is slower than the on-feed number looks; that matters for feeder supply two to three years out even as the Mexico border opening shifts near-term price pressure.

MACRO

Libya Protests Escalate, Threatening Oil and Gas Output

Anti-government protests over power cuts intensified Tuesday, with demonstrators entering Libyan oil facilities. Libya produces roughly 1.2 million barrels per day; any disruption offsets some of the Hormuz premium deflation currently pushing crude lower. Watch this for a floor under WTI.

Written by Sigurd Lindquist, founder. Reply at sig@farmers1st.com — I read everything.

💵Your local elevator bids →

📨

Know a farmer who’d want this?

Forward this briefing. Or new here? Subscribe in one tap.

Subscribe →

USDA Crop Progress, CME Group settlement prices, Brownfield Ag News, Feedstuffs, OilPrice.com, EIA, USDA NASS cattle inventory · Auto-compiled at 6:02 AM CT