Wheat shorts get their nerves checked on renewed overnight Black Sea military action.

Grain futures this morning have wheat leading the recovery, followed by corn, while soybeans trade a few pennies lower. Strength in the wheat overnight came from a rally as Ukraine launched a missile attack on the Russian port of Sevastopol. The port is in the Crimean Peninsula and has been used to launch drone and missile strikes on Ukraine. It’s been reported that the port infrastructure and two Russian military vessels under repair are on fire.

Obviously, Ukraine is thinking that if they cannot export grain, neither will Russia, which is increasing the risk of Black Sea Marine insurance being costly or unable to obtain. As of yesterday’s USDA data, the world wheat stocks outside the Black Sea are record low and will not fill global demand if Ukraine were to inflict harm on Black Sea Russian ports.

China has followed-through on stipulating maximum moisture specifications on imported soybeans to 13% from the US and Argentina and 14% from Brazil starting December 1. This modification will have an impact on Brazilian soybeans which are not often dried down and often carry seed moisture well in excess of 4%. It’s unknown whether China will either ban Brazilian cargoes with moisture above 14% or use that opportunity to extract sharp discounts in price. This change will be a problem for Brazilian soybean exports, as Brazil will not be able to install dryers in the interior of the country or at the ports in the coming months.

Yesterday’s yield data from the USDA did reflect another decline, which statistically implies yield will still be lower in the October report. The soybean carryout of 220 Mil Bu will be under assault if yields likely decline further. A demand bull is now developing in the soybean oil market, with wheat prices realizing the only thing keeping them under pressure is the large availability of Russian wheat that will lose its size as the onset of winter gets underway, or any port infrastructure damage were to occur as the Ukrainian/Russian war escalates.

Yesterday, cattle and feeder cattle produced a mixed close with a steady outlook for today. Live cattle recovered from early session weakness, while feeder cattle were well off session highs even with a lower corn market. Asking prices in the South are now at $185, which is $5 higher from last week, and offers in the North are $7 higher from last week, presently placed at $190. Packers have successfully avoided the negotiated market over the last month and will continue to do so as the beef market has stumbled.