Grain futures are mixed this morning, with wheat finding stability near this week's lows as continued tensions in the Black Sea keep new wheat supplies from moving, while row crops react to StoneX's latest yield estimates. As has often been the case, StoneX came in on the high side, pegging corn at 184.8 BPA and soybeans at 53 BPA. The market is leaning on corn and soybeans this morning because StoneX was very accurate last year. However, in the previous nine years, they consistently carried one of the highest yield estimates, generally above trendline, while final crop yields ultimately finished below those early projections.

Ukraine's Agriculture Ministry stated that major Black Sea ports are still operating well below capacity, with many shipowners unwilling to enter the region because of the elevated risk. Alternative export routes through the Danube, rail, and truck can replace only about 50-55% of normal export capacity during harvest. The situation is further complicated by Europe's drought, which has left the Danube River running at below-normal levels, reducing barge capacity and increasing freight costs. Novorossiysk, Russia's largest deepwater grain port, also remains under restrictions, with the nighttime vessel movement ban still in effect and grain moving at a slower pace than normal.

North African and Middle Eastern wheat millers are getting close to exhausting their on-hand wheat supplies while waiting for improvements in the Black Sea export situation. As we move into late August, the timeline becomes much more critical. Buyers cannot afford to wait indefinitely and still have wheat delivered before inventories become too tight. Purchases are likely to shift first toward Europe, with US wheat values eventually following higher world prices. Otherwise, US export demand could accelerate enough to tighten domestic carryout further.

Crude oil is holding in the mid-$70s, with moderate strength this morning as prices trade back above $76.00. Reports suggest a possible agreement on the Strait of Hormuz could come today, with discussions centered on another 60-day shipping arrangement. Under the proposal, inbound vessels would travel closer to Iranian waters while outbound traffic would be routed nearer Oman. Even if an agreement is reached, delays are still likely as shipping lanes would first need to be cleared of mines.

Today's focus remains on the August 12 WASDE report, with the market currently trading around the high-side private yield estimates. Weather continues to be exactly what we have been discussing all week, a story of the haves and the have-nots. The central Corn Belt has received enough rainfall to keep production expectations elevated, while large portions of the Western Corn Belt and Plains remain dry. Heat returns to the Southern Plains with temperatures in the 90s to lower 100s.

This is not a repeat of 2025, when June and July were generally cool and wet. This year's wide variability in heat, lack of moisture, and crop stress across the Western Corn Belt continue to weigh on yield potential. The USDA may not fully capture that in the August report, but achieving a national corn yield much above 180 BPA appears increasingly difficult. Meanwhile, El Niño continues to develop, and concerns over South American production later this year should provide underlying support on price breaks.