Grain Markets and Other Stuff

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🌾 Grains Sell Off Hard — Wheat, corn, and soybeans all dropped sharply to start the week after wheat posted downside reversals Friday. Ukraine is pushing new ship-safety measures with Russia and has called a UN Security Council meeting over attacks on grain vessels.

🛢️ Mideast Tensions Ease, Oil Slides—The US and Iran paused military strikes over the weekend, sending WTI crude more than $6/bbl lower this morning even though it's still up ~15% over two weeks. That pressure is rippling across the whole commodity complex.

🔥 Heat Dome Locks In Over the Corn Belt — A stationary heat dome is pushing temps 10-15°F above normal with brutal humidity across the Plains and Corn Belt this week. A brief cooldown may show up later this week, and a shift toward rain in the forecast likely helped trigger this morning's selloff.

💰 House Passes $12B Farm Aid Package — The $95B budget resolution squeaked through 216-214, pairing farm aid with $73B in defense/Iran-war spending. Farm groups are cheering the aid, but the Senate still has to pass its own version before anything's final.

📊 Funds Pile Into Corn & Beans — The latest COT data shows managed money net buying 45k corn and 55k soybean contracts, pushing both net-long positions to their highest since early June. Wheat saw smaller buying too, with funds adding 16k SRW contracts.

🐄 Mexican Cattle Imports Set to Resume — The Douglas, AZ border crossing reopens to Mexican cattle August 24, with more ports to follow, after being closed since November 2024 over screwworm concerns. Disinfectant dip vats will screen all incoming cattle as the closest active case sits 325 miles away.

📈 Cattle Reports: Mostly Neutral — Friday's Cattle on Feed numbers landed right in line with expectations, so traders shrugged it off. The Cattle Inventory report was more mixed—a shrinking beef cow herd is bullish, but more replacement heifers lean neutral-to-bearish.

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🛢️ Oil prices surged Thursday, with WTI crude jumping 6.2% to $92.19/barrel after Houthi attacks on Saudi oil tankers in the Red Sea raised concerns about global oil supplies. Higher crude prices are also pushing fuel costs higher, with the national average gasoline price climbing to $4.09/gallon. ⛽ 

🌽 Grain markets were mixed. Soybeans extended their rally, with November 2026 futures gaining about 5 cents on support from rising crude oil prices and forecasts for hotter Corn Belt weather next week. Corn added about 3 cents, while wheat turned lower after early gains as traders took profits despite ongoing Black Sea shipping disruptions. 📈 

🚢 USDA announced a flash sale of 126,000 metric tons (5 million bushels) of soybeans to unknown destinations for the 2026/27 marketing year. 

🌦️ Drought conditions worsened across parts of the Corn Belt and Northern Plains as hot, dry weather persisted. Conditions improved in Kentucky, but drought expanded in the Dakotas, northern Illinois, southeastern Minnesota, and southeastern Nebraska. South Dakota even declared a statewide drought emergency. Current drought coverage includes 20% of corn, 18% of soybeans, 47% of winter wheat, 25% of spring wheat, and 44% of U.S. cattle. 🌾 

🌾 North Dakota's spring wheat crop is coming in below USDA expectations. Crop tour scouts estimate yields at 48 bpa, well below the USDA's 58 bpa forecast. While dry weather has reduced disease pressure, prolonged heat and limited rainfall have trimmed yield potential, and additional heat could lower yields further before harvest. 

📊 Weekly export sales disappointed again. Corn sales totaled 13 million bushels, soybeans 2 million bushels, and wheat 11 million bushels, with all three commodities landing at or below trade expectations. Mexico was the top buyer of corn and wheat, while China was the largest soybean buyer.

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🚢 Russia restricts Novorossiysk port traffic — Russia has imposed overnight shipping restrictions (midnight–5am) at Novorossiysk, its largest grain export port, due to rising drone attack threats. Grain rerouted from the Sea of Azov is making the port even more critical, though daytime operations continue normally.

🌾 Wheat futures surge on Black Sea tensions — Chicago wheat jumped ~28 cents to $7.06/bu and KC wheat gained ~31 cents to $7.64/bu as Russian strikes hit Odesa region ports and infrastructure. Corn and soybeans also climbed on looming Corn Belt heat and rising freight insurance costs.

🇪🇺 EU grain production set to plunge—European grain output is projected to fall over 9% from last year, the steepest drop in two decades, as heat waves crush wheat and corn yields. Higher fertilizer/fuel costs from the US-Iran war pushed farmers to cut inputs and acreage, sending Paris wheat futures up ~20% this month.

🌱 ND wheat tour wraps up—Southern ND spring wheat scouted at 46 bpa (below last year's 50 but above the 5-yr average), while northwest/north-central areas came in stronger at 48 bpa. Acreage hit its lowest since 1969, with scouts surveying the fewest fields on record.

🛢️ Houthi attacks rattle oil markets — Yemen's Houthis claimed responsibility for strikes on two Red Sea oil tankers, sending WTI up ~3% to near $87/barrel. Trump threatened Iranian infrastructure if Strait of Hormuz attacks continue, and Iran vowed retaliation against US-linked energy facilities.

📊 CME downplays perpetual futures demand — CEO Terry Duffy said institutional clients (94% of volume) show little interest in never-expiring contracts, even as Kalshi pursues its own perpetual futures for precious metals. Duffy argued perps suit retail more than institutional hedging needs.

⛽ Ethanol production ticks up—weekly output rose to 1.09M bpd, up 5.2% week-over-week, while stocks grew to 24.48M barrels. Corn Belt margins stayed strong, running 10–35 cents positive per Reuters data.

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🌽 Iowa Weather & Crops — Warm, dry conditions gave Iowa farmers 6.7 days suitable for fieldwork last week, pushing corn and soybeans through key growth stages, though dry soil is becoming a concern as corn enters pollination. 🌧️ A more active pattern with widespread rain chances is on tap for the Corn Belt this week, though the GFS turned notably drier (and warmer) overnight vs. yesterday's run.

🌾 Wheat Rallies on Black Sea Tensions — Chicago wheat jumped ~9 cents to $7.33/bu and KC wheat gained 4 cents to $6.78/bu after Russia banned vessels from anchoring at two Sea of Azov ports. 🚢 Analysts already slashed Russia's July export forecast 25%, while ongoing strikes on Ukraine's Black Sea ports have cut its export capacity by roughly a third.

🇺🇸 Grassley Pushes Market Solutions — Senator Grassley says farmers need stronger markets over more government payments, backing year-round E15 as a bigger long-term fix than the proposed $11B aid package. 💰 He's also renewing calls to cut production costs, pointing to his Fertilizer Research Act and pressing the Trump administration on why Brazil's costs run so much lower.

📉 Sovecon Cuts Russian Wheat Forecast — Sovecon trimmed its 2026 Russian wheat estimate to 88.3mmt from 88.9mmt on weak southern yields, down from last season's 91.4mmt crop. ⚔️ The downgrade lands right as Black Sea shipping tensions heat back up.

🥇 Kalshi Eyes Metals Perpetuals — Kalshi has asked the CFTC to approve perpetual futures on gold, silver, and platinum, building on its May approval for crypto perps. ⚖️ CME is, meanwhile, suing over whether these "perpetual futures" are really just unregulated swaps, with Kalshi's bitcoin perp alone moving $31.5B in 24 hr volume.

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🌱 Soybeans surged to a two-month high near $12.26/bu as hot, dry Corn Belt weather and fresh Chinese buying fueled the rally. 🇨🇳 Renewed Chinese purchases appear to be the bigger driver, with US weather concerns playing a secondary role.

🌽 Corn futures added nearly 6 cents to settle around $4.73/bu, supported by weather worries even as a cooler forecast may cap further gains. 📦 USDA also confirmed fresh flash sales, including soybeans to China and unknown destinations plus corn to Colombia for 2026/2027 delivery.

🌾 Russian wheat export prices jumped 3% as Ukrainian drone attacks disrupted Black Sea shipping and cut July export forecasts by 25%. ⚓ Added tension in the Strait of Hormuz and a slower Russian harvest pace are compounding uncertainty over global wheat supplies.

📊 US corn conditions slipped slightly to 67% good-to-excellent while soybeans improved to 66%, both still running above their five-year averages. 🌤️ Spring wheat ratings fell to 53% good-to-excellent, but winter wheat harvest progress jumped to 74% complete, ahead of the average pace.

⛽ Gas and diesel prices keep climbing as the US-Iran conflict escalates, with regular gas now averaging $4.00/gallon and diesel at $5.11/gallon. 🛢️ WTI crude is up roughly 20% this month to $83.23/barrel, driven by shipping disruptions through the Strait of Hormuz.

🚢 Corn export inspections stayed strong at 1.5mmt, up 57% year-over-year, while soybean and wheat shipments both came in below expectations. 🇨🇳 China made up about 22% of last week's export inspections.

🇨🇦 The Trump administration plans a 50% tariff on select Canadian imports starting August 19, covering dairy, alcohol, and cement—even USMCA-exempt goods. 🤝 Canada is downplaying the threat as familiar posturing, while Mexico remains the top buyer of US corn amid the shifting trade landscape.

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🌾⚔️ Black Sea Grain War Escalates — Ukraine's strikes on Russian shipping and Russia's relentless attacks on Ukrainian ports have wiped out roughly a third of Ukraine's Black Sea export capacity. Wheat futures are exploding higher, with a deadly strike on a corn-carrying cargo ship near Odesa adding fuel to the fire. 📈🚢

🇨🇳🌱 China Keeps Buying US Beans — The USDA confirmed fresh flash sales Friday, including 340,000mt to China, 256,634mt to Mexico, and 110,000mt to unknown destinations, all for the 2026/2027 marketing year. Chatter suggests more Chinese purchases could drop this week, while US corn sales to China remain a no-show. 🛳️💰

🚜💸 Iowa Farmers Feel the Squeeze — A new report shows Iowa's ag economy shrank 53% from 2022-2024 as corn and soybean production costs surged 37% and 36%. Nearly 1 in 5 Iowa farms are now financially vulnerable, even with strong land values and record cattle profits cushioning the blow. 📉🌽

📊 Funds Flip More Bullish — The latest CoT report shows big money managers snapping up 26k corn, 6k soybean, and 26k SRW wheat contracts last week. Corn's net long hit its highest since early June, while wheat's net short shrank to its smallest since late May. 💹🐂

🔥🛢️ US-Iran Conflict Boils Over — A deadly weekend exchange pushed the US military death toll to 17, with strikes now hitting civilian infrastructure like ports and bridges. Iran has scrapped the interim peace deal and is threatening to choke off oil, gas, and fertilizer shipments through the Strait of Hormuz. ⚓🚨

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🇺🇸🇧🇷 U.S.-Brazil Trade Tensions Escalate

🚨 The Trump administration announced 25% tariffs on many Brazilian imports, effective July 22, citing unfair trade practices. While beef, coffee, and energy products are exempt, soybeans, soybean meal, soybean oil, and ethanol are not. A separate investigation could push tariffs on some Brazilian goods as high as 37.5%.

🇧🇷 Brazil is weighing a response but is avoiding tariffs for now. Instead, it is considering measures such as suspending patent protections for pharmaceutical products and agricultural seeds. President Lula has not yet approved the plan, and both countries remain open to negotiations, though the trade dispute could escalate.

🌽 Farm Financial Stress Continues

📉 U.S. farmers are expected to post a sixth straight year of losses in 2027. The American Farm Bureau Federation projects $32 billion in losses across major row crops, with corn, soybean, and wheat margins all expected to remain below breakeven.

💸 Weak crop prices and stubbornly high input costs—made worse by the recent U.S.-Iran conflict—continue to pressure farm profits. The Farm Bureau is urging Congress to provide additional financial assistance and advance long-term policies to strengthen the farm economy.

🌦️ Drought Update

🌧️ Heavy rain improved drought conditions across southern Kentucky, southern Illinois, and southeastern Missouri. However, dry weather allowed drought to expand in northern Missouri and northern Wisconsin.

🔥 The High Plains saw above-normal temperatures, although rain improved conditions in parts of the Dakotas and western Nebraska. This week's intense heat across the Northern Plains is expected to worsen next week's drought outlook.

Current drought coverage:

•  🌽 Corn: 19%
•  🌱 Soybeans: 18%
•  🌾 Winter Wheat: 48%
•  🌾 Spring Wheat: 24%
•  🐄 Cattle: 44%

📉 Grain Markets Pull Back

🌽 Corn and soybean futures ended lower Thursday as weak export sales and a wetter Corn Belt forecast pressured prices.

•  🌽 December 2026 corn: $4.64/bu (-6¢) 
•  🫘 November 2026 soybeans: $11.95/bu (-7¢) 

🌾 Wheat futures were mixed after Wednesday's rally. Ongoing attacks in Ukraine's Odesa port and the Sea of Azov continue to raise concerns about grain exports from Russia and Ukraine, which together account for about one-third of global wheat exports.

🚢 Export Sales Disappoint

📉 Corn export sales fell to a marketing-year low last week at 315,000 metric tons (12 million bushels)—well below expectations and sharply lower than recent weeks. Japan was the top buyer.

🫘 Soybean sales totaled 188,300 metric tons (7 million bushels), near the low end of expectations. China was the largest buyer and purchased just over 1 million metric tons of new-crop U.S. soybeans, its biggest weekly purchase since January.

🌾 Wheat sales also disappointed at 235,100 metric tons (9 million bushels), with Japan again leading purchases.

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🌾 Wheat futures rallied hard Wednesday as escalating Russia-Ukraine tensions rattled markets, with Chicago wheat closing near $6.77/bu and KC wheat hitting $7.20/bu—both the highest since mid-May. Ukraine has reportedly lost about a third of its grain export capacity after intensified Russian strikes on Black Sea ports, and strength spilled over into corn and soybeans too. 🚢💥

🏛️ House Republicans rolled out a $95 billion spending package Wednesday, with $60 billion aimed at military spending and $12 billion earmarked for farm assistance to offset war-driven input costs. Critics are slamming the bill for lacking spending cuts, warning it could add $100+ billion to the national debt over the next decade. 💰📜

🌽 Excessive heat is raising red flags for US corn yield potential as 34% of the crop hits the critical pollination stage. A heat dome parked over the Northern Plains is expected to shift south later this week, easing stress up north but keeping things hot across the central and southern Plains. ☀️🌡️

🫘 NOPA's June crush data showed US soybean crushing jumped 2.7% from May to 214.34 million bushels—a record for the month and above all trade estimates. Meanwhile, soybean oil stocks sank to an 8-month low of 1.50 billion pounds as strong crush margins keep processors busy. 📊🛢️

⛽ US ethanol production slipped to a 10-week low, down 4.8% week-over-week to 1.04 million barrels per day. Stocks climbed to 24.39 million barrels even as Corn Belt margins held modestly positive, ranging from 10 to 35 cents. 🌽🔋

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🌾 Russia Reroutes Grain After Black Sea Attacks — Russia is shifting grain shipments away from the Sea of Azov following Ukrainian strikes that disrupted a route responsible for roughly a quarter of its grain exports. Wheat futures spiked to multi-week highs as traders weigh the risk of further Black Sea supply chain chaos! 📈

🔥 Heat Wave Threatens South Dakota Spring Wheat — Triple-digit temps and warm overnight lows are stressing the state's spring wheat crop, especially in drier regions without last week's rainfall boost. With temps running nearly 6°F above normal and more heat on the way, grain fill and crop quality are on watch. 🌡️🌱

🚢 Brazil Debuts Ethanol-Powered Cargo Ship — Brazil just launched its first ethanol-powered container vessel, setting sail for China and opening the door to a potential biofuel revolution in global shipping. If ethanol captures just 5% of the marine fuel market, corn demand could jump by 1.5 billion bushels—a massive opportunity for ag producers! ⛴️🌽

💵 Inflation Cools More Than Expected in June — Annual inflation slowed to 3.5%, well below forecasts, while monthly prices posted their biggest drop in six years thanks to falling energy costs. The Fed is still expected to hike in September, but easing prices have softened the odds. 📉

⚓ Strait of Hormuz Tensions Ripple Beyond Oil — Escalating US-Iran tensions threaten fertilizer, sulfur, aluminum, and helium supplies—not just crude. Trump has dropped his proposed 20% toll on Hormuz shipments after pushback from Gulf allies, opting instead for future investment deals. 🛢️⚠️

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🛢️ Oil prices spiked 9.4% to $78.14/barrel Monday as US-Iran tensions over the Strait of Hormuz reignited supply fears. Trump announced a US blockade to stop Iranian oil tankers, even as strait traffic had already dropped 52% week-over-week. 🚢

🌾 Russian grain exports face new uncertainty after Sea of Azov shipping restrictions followed Ukrainian attacks on Russian vessels. The affected route handles roughly a quarter of Russia's grain exports, though no major disruptions have hit yet as harvest ramps up. ⚠️

🌱 Soybean futures climbed Monday on hot, dry weather concerns across the Corn Belt, with Nov26 gaining 4 cents to close near $11.95/bushel. Corn followed suit on the same weather worries while wheat pulled back on profit-taking after Friday's Black Sea-driven rally. 

🌽
📊 US corn and soybean conditions ticked up slightly last week, with corn at 68% good-to-excellent and soybeans at 65%, both above their five-year averages. Winter wheat harvest also jumped to 67% complete, well ahead of the historical pace. ✅

🇨🇳 China bought more US soybeans Monday, its fourth flash purchase in a week, pushing total purchases to nearly 4% of its 25mmt commitment. Cumulative new-crop purchases now stand at 1.072mmt, about 4.3% of the White House-outlined target. 🛒

🚛 US corn export inspections came in strong at 1.5mmt, up 17% year-over-year despite a weekly dip. Soybean shipments rose sharply from last year while wheat shipments improved week-over-week but still trailed last year's pace. 📦