Grain Markets and Other Stuff

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🌾 Wheat hits a three-year high as Black Sea exports nearly halt amid Russia-Ukraine strikes—Chicago wheat settled near $7.61/bu, KC wheat at $8.22/bu. It's on pace for the biggest monthly gain since Feb 2022, right when the war began.

⛽ Biofuels: The Trump admin is weighing nearly doubling small refinery exemptions (up to 1.8B gallons) to cut fuel prices before the midterms. Farm groups warn it could crush corn and soybean oil demand, though a 2027 biofuel quota bump may help offset it.

☔ Weather markets: Kalshi is partnering with The Weather Company to grow its weather prediction contracts, with volume up 500% YoY toward a $1.1B annualized pace. The bigger play may be farmers using these as a hedge against rainfall and temperature swings.

🇨🇳 China's crops: Extreme heat and flooding are hurting corn and soybean quality, likely boosting demand for imported corn and sorghum. Soybean imports probably won't get the same lift since China's domestic beans go to food, not feed.

🌵 Drought monitor: Corn Belt conditions held mostly steady, though Wisconsin and Minnesota worsened. Corn 27%, soybeans 28%, winter wheat 56%, spring wheat 80%, and cattle 58% are in some level of drought.

📉 Export sales: Corn sales crashed to a marketing-year low of just 31,200mt, down 87% week-over-week. Soybean sales dipped too, but wheat sales rose 2%, with Mexico leading purchases.

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🇷🇺🌾 Russia-Ukraine Tensions Escalate—Peace talks have collapsed, and Russia is weighing intensified strikes on Kyiv and other Ukrainian infrastructure, with Black Sea grain shipments essentially halted amid attacks on ships and ports. Up to 70 vessels are stuck waiting near the Sulina Canal, and worsening weather could add to the delays.

📈🌽 Grains Rally on War Fears — Chicago wheat hit its daily limit Wednesday, settling near $7.48/bushel, while KC wheat, corn, and soybeans all posted strong gains. Reuters reports Ukraine's grain exports are down 60% this month vs. July, and Ukraine's farm ministry warns 2027 planted area could shrink without financial support.

⛽🚜 SRE Exemptions Could Balloon—The White House is pushing for more small refinery exemptions to ease fuel prices before the midterms, with industry sources now pegging the total as high as 1.2-1.8 billion RINs. The American Soybean Association warns this could wipe out 500M gallons of biodiesel/renewable diesel demand and cost farmers ~$1B.

🇨🇳🫘 China Buys More Soybeans—USDA confirmed another flash sale Wednesday, with US exporters selling 333,000 metric tons of soybeans to China for the 2026/2027 marketing year. Check out the export sales and China purchase tracker graphics below.

🏭📊 Ethanol Output Hits Seasonal High — Weekly ethanol production climbed to 1.11 million barrels/day, up 2.1% week-over-week, while stocks rose to a sixteen-week high of 25.21 million barrels. Margins across the Corn Belt weakened, ranging from 10 cents negative to 30 cents positive.

🥩🐄 Trump Eyes Beef Regulation Overhaul—On Glenn Beck's show, Trump floated cutting regulations in beef processing to help farmers, ranchers, and the economy, without offering specifics. Ground beef averaged $7.12/lb in July—up 9% year-over-year and 47% over five years—and Trump also signed a proclamation boosting reduced-tariff beef imports.

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🌽 Corn futures rallied Tuesday, with Dec26 up 8¢ to close near $5.24/bu on shrinking yield expectations and worsening crop conditions. Soybeans climbed too — Nov26 gained almost 14¢ to settle around $12.38/bu on strong Chinese demand and crush margins, though traders are watching for possible Chinese retaliation over new US sanctions on Iran's trading partners.

🌾 Wheat also closed higher despite growing talk of a potential Ukraine-Russia diplomatic resolution that could ease Black Sea shipping disruptions.

🛢️ Diesel markets are bracing for more tightness as Russia weighs extending its export ban — possibly through October 1, or even year-end — in response to Ukraine's refinery strikes, which have hit 18 targets this month alone. Russia normally supplies about 10% of global diesel exports, so a longer ban could meaningfully squeeze prices, margins, and freight costs worldwide.

📦 Soybean exports: USDA flagged a flash sale Tuesday — 132,000mt (5 million bushels) sold to unknown destinations for 2026/2027 delivery. 📊 Check the new crop export sales graphic below for the full picture.

🤖 California ag labor: State lawmakers are weighing a late-session proposal to let autonomous farm equipment work alongside laborers in the same fields, drawing pushback from labor unions over safety and job concerns. Critics also say tucking the change into a budget trailer bill sidesteps normal legislative review, even though autonomous gear from companies like John Deere is already deployed elsewhere in the state.

🥩 Beef tariffs: Ag Secretary Brooke Rollins says the administration is still hashing out details on Trump's plan to pause elevated tariffs on up to 300,000mt of imported ground beef, sold at a reported 25% discount to market prices. 🐄 The idea has drawn sharp criticism from ranchers and lawmakers who say it undercuts domestic cattle producers, despite Trump's "America First" messaging.

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🌽 Corn Crop Conditions Slip — US corn ratings dropped to 57% good-to-excellent, down from 60% last week and below the 5-year average. North Dakota and Ohio led the declines with steep weekly drops. 📉

🌾 Iowa Yield Checks In — Pioneer's 4,000+ yield checks put Iowa corn at 226.5bpa, just shy of last year, while Pro Farmer's estimate came in notably lower at 193.98bpa. USDA's August number remains the highest of the bunch at 216bpa. 📊

💰 Corn Rallies, Soybeans Slide — Dec26 corn climbed to $5.16/bu on weak Crop Tour results and Brazil weather worries, while Nov26 beans dropped to $12.24 on a record-crop outlook. 🌱📈📉

🕊️ Black Sea Diplomacy Talk — Zelenskiy signaled Ukraine and Russia may pursue diplomatic efforts, even as strikes continue and Ukraine pushes allies for more air defense ahead of winter. ⚔️🤝

🇨🇳 New China Tariff on the Table — The US is weighing a 7.5% tariff on Chinese goods that would push total tariffs to ~20%, timed ahead of the Trump-Xi meeting next month. 🏭💵

🚢 Export Inspections Mixed — Corn shipments fell 33% week-over-week, soybean shipments jumped 43% with no China purchases recorded, and wheat shipments dropped 17%. 📦🌐

🐄 Mexican Cattle Ports Reopening — USDA reopened the Douglas, AZ port and plans two more reopenings in the coming months as Mexico battles screwworm cases. 🇲🇽🥩

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🌽 Crop Tour Shocks the Corn Market — Pro Farmer's survey pegged national corn yield at just 173.2 bpa (15.34 bil bu), well under USDA's 180.7 bpa estimate, with Iowa fields hiding disappointing grain length despite looking strong from the road. Soybeans told the opposite story, with a record 53.3 bpa yield (4.57 bil bu) projected as conditions improved heading west. 📈

💹 Grains Rally on Bullish Tour Data — Corn closed up for a third straight session, with Dec26 gaining 5 cents to ~$5.09, while Nov26 soybeans rose 3 cents to ~$12.40 on tight supply fears and Chinese demand. ❌ Wheat slipped as traders eyed alternative suppliers amid ongoing Black Sea export disruptions.

🇨🇳 China Keeps Buying Beans — USDA flash sales showed 712,000mt of soybeans sold to China and another 720,000mt to unknown destinations, both for 2026/27 delivery. 🌽 Corn also saw 205,000mt sold to an unknown buyer for the new marketing year.

📊 Funds Pile Into Corn & Beans — The latest CoT report showed managed money adding 56k corn contracts (now net long 182k, the biggest since May) and 43k soybean contracts. 🌾 SRW wheat funds added a modest 8k contracts on the week.

🚢 Russia Scrambles to Support Farmers — With over 97% of Black Sea export capacity offline from ongoing strikes, Moscow is weighing loan extensions, subsidies, and government grain purchases to help exporters. 🌍 Russia and Ukraine together account for more than a quarter of global wheat exports, so the standstill carries major global weight.

🥩 Trump Opens the Door to Cheaper Beef Imports — The administration will allow 300,000mt of tariff-free ground beef imports over 90 days, with exporters agreeing to a 25% discount they claim will reach consumers. 🐄 Cattle groups are pushing back hard, though the volume is only ~2% of US consumption.

📋 Cattle on Feed: Mixed Signals — August 1 cattle on feed hit 11.12 mil head (+2% YoY), with July placements down 11% (a bullish surprise) but longer feeding times masking a shrinking cowherd. 🚪 The report may get overshadowed by Trump's beef tariff news and today's reopening of the border to Mexican cattle.