Another Surge in Wheat Prices Overnight

MORNING AG OUTLOOK

Higher trade across the Ag space led by another overnight surge in wheat prices ahead of today’s USDA production and WASDE updates.  Ukrainian drone strikes led to the closure of Russia’s Novorossiy port on the Black Sea.  This deep water port is home to 2 major grain terminals along with energy terminals and a naval base.  NASA satellites confirm fires have broken out following a massive drone attack.  Energy prices are mixed in 2-sided trade as hopes for a peace agreement in the Middle East and the reopening of the Straits of Hormuz appear to be dwindling.  Spot WTI crude is up $.50 a barrel near $83.70.  Spot RBOB is unchanged while HO is up $.02 a gallon.  Powerful storms and high winds left a trail of damage and heavy precipitation across N. IL and the ECB the past 24 hours.  Scattered rains, some heavy, also noted across the Dakota’s.  Heavy rains will continue to track from west to east from the WCB and across the central Midwest and ECB.  Hot and dry across the SW corn and soybean belt along with the S. plains and Delta region.  Seasonally cool across Argentina and S. Brazil this week with healthy rains across N. Argentina and S. Brazil.  Warm and dry across C. and Northern growing regions of Brazil.  Hot for all of Europe with improving prospects for rain, likely too late to provide benefit for France’s corn crop.  The US $$$ is little changed ahead of today’s CPI release.  Consumer prices are expected to have risen .1% in July-26 with core inflation up .2%.  US equity markets higher.

Corn: 

Sept-26 and Dec-26 are both $.03 ½ higher at $4.40 ¼ and $4.64 respectively.  Support for Dec-26 is at its 50-day MA at $4.57.  Resistance is at its 100-day MA at $4.72.  Look for cuts to EU production to more than offset potentially higher production in Brazil.  Conab is expected to cut Brazilian production .6 mmt to 141.1 mmt which is still above the USDA est. of 138 mmt.  EIA data this AM is expected to show ethanol production held steady at 325 mil. gallons LW, in line with the level needed to reach the USDA usage est. of 5.550 bil. bu.

Soybeans: 

Sept-26 and Nov-26 soybeans are $.05 higher at $11.56 ½ and $11.74 respectively with both holding within yesterday’s range.  Nov-26 are consolidating near its 50 and 100 day MA’s after falling to a 5-week low yesterday.  Sept-26 meal is up $2.70 at $307.70 while Sept-26 oil is steady.  Crush margins are up $.04 ½ at $2.74 bu.  China’s Sinograin sold 89% of the 516k mt of soybeans in today auction, its 3^rd in recent weeks as they look to free up storage ahead of US arrivals.  US Gulf FOB offers are $.30-$.35 bu. below Brazilian offers.  China continues to rack up purchases ahead of  Chinese leader Xi expected visit to Washington DC in 6 weeks.  Conab is expected to raise their Brazilian production forecast .5 mmt to 181.1 mmt, just above the USDA’s 180 mmt.

Wheat: 

Prices have surged $.12-$.23 more than erasing yesterday’s losses tied to reports Ukraine and Russia might meet in turkey to discuss the safe passage of vessels through the Black Sea.  CGO Sept-26 is up $.17 ¼ at $6.47 ½, KC Sept-26 is $.23 higher at $7.22 ¼ while MIAX Sept-26 is up $.12 ½ at $6.71 ¾.  SovEcon estimate Russia will ship 3-3.4 mmt of wheat in Aug-26, down from their historical average of 5 mmt and if verified would be the lowest since 2016/17.  Russian exports in the first 10 days of August reached 801.5k tons vs. 978k YA.  Ukrainian shipments thru Aug. 12^th have reached only 280k tons for the month, down from 75% from YA.  Since July 1^st wheat shipments for the 2026/27 MY have reached 1.2 mmt, down 20% YOY.  I look for the USDA to take a slow measured approach to lowering Ukraine/Russia exports.

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