It was just another evening where grains rally in the night, usually making new highs for the week, but peaking when the Matif opens near 4 AM and drifting into our daylight hours. This morning, though, that turned the accelerator to the downside at 7:00 a.m. Eastern time when the White House announced it was going through with Section 301 tariffs on 60 countries accused of failing to “impose and effectively enforce” bans on goods produced with forced labor. That took the markets eyes of weather and Black Sea issues, and squarely on the “oh my God, here we go again” mentality that demand may get shifted from the US.

Goods from countries including Canada, Mexico, India, and the UK will face a 10% duty, while imports from the European Union and Taiwan will be taxed at least 10%. Products from Japan, South Korea, and Switzerland will face levies of at least 12.5%, with dozens of other countries subject to a flat 12.5% tariff. Fuel, food, fertilizer, and products already covered by sector-specific tariffs, including automobiles, metals, and pharmaceuticals, will be exempt. Goods qualifying under the US-Mexico-Canada trade agreement will also be excluded.

The tariffs take effect Friday at 12:01 a.m. New York time, marking the biggest move yet to restore President Trump’s protectionist tariff wall since his earlier levies were struck down by the Supreme Court. After that setback, the president instituted a 10% global import tax, which expires Friday. The timing of the new levies ensures there will be no gap between the two.

This action allowed corn and soybeans to drop $0.10 off overnight highs, with wheat tumbling over $0.30. The Black Sea issue is still a problem, moving wheat right at the moment it needs to happen for many countries, while weather forecasts remain threatening for the Western Corn Belt rolling in the next week. This will come back into focus again, but first we have to finish up the panic on the tariff concerns.

Those new highs in wheat overnight were tagged as it’s becoming apparent that Russia and Ukraine continue to target each other’s grain storage/loadout facilities and vessels with new attacks overnight. Russia has likely hit three Russian ports, including Odessa, Ukraine’s biggest exporting terminal, which is temporarily halting loading. There is no discussion of any kind of peace deal, and it appears that this black Sea shortfall of exports of wheat and eventually corn is going to persist into the fall.

Weather remains supportive for the commodity markets as forecast rainfall continues to trend lighter than originally expected. Soil moisture is declining across portions of the Corn Belt, with increasing reports that corn conditions are beginning to deteriorate, including in parts of Iowa that had been viewed as some of the best-producing areas.

Fertilizer supply risks are beginning to mount as disruptions in the Strait of Hormuz, along with tighter exports from Russia and China, threaten global nutrient availability. Brazilian farmers have reportedly secured only about half of their fertilizer needs, leaving the 2026/27 planting season in Brazil and Asia’s rice-producing regions as one of the market’s biggest supply concerns. Brazil typically starts planting in its northern Mato Grosso region in early September, but may have to delay until October 1. Especially with the super El Niño typically affecting northern Brazil from fall into winter.