In what has become a regular habit, overnight grain pricing has been firm. Though the gains are not substantial compared to prior nights, firmness continues to extend, with corn and soybeans pushing through yesterday’s highs more easily. Black Sea movement has been shut off, with no shipping moving through the Kerch Strait, which is fed from the Sea of Azov. Also, Ukraine’s Black Sea ports are now effectively stalled, as Ukraine’s Agriculture Ministry confirmed overnight that many shipowners have temporarily stopped sending vessels into the region because of the recent escalation in Russian missile and drone attacks. In addition, industry sources reported that Russia has imposed a nighttime ban on vessel movements at Novorossiysk, its largest deepwater grain export port, due to the threat of Ukrainian drone attacks. While daytime loading continues, the restriction underscores that the conflict is now disrupting both Ukrainian and Russian export logistics.

Crude oil prices surged higher overnight, with the spot contract trading above 90.00 this morning, showing gains of more than $4.00 as new attacks were reported on a Saudi oil tanker in the Red Sea near the Bab El-Mandeb Strait. This created concern that both major Middle East shipping routes, including the Strait of Hormuz, which is already seeing heavily restricted traffic, could be under simultaneous threat. This has reignited soybean oil values this week, along with soybean meal demand, because Argentina is struggling to meet crushing commitments and is buying soybeans from Paraguay, pushing soybeans once again to new contract highs overnight.

Just as the EU weather forecast continues to reduce crop production prospects with extreme heat and dryness, it now appears these conditions will persist beyond July 28. This is keeping French corn values at new contract highs of €260.50, which translates to roughly $7.55 per bushel this morning. The US forecast is becoming more concerning for August as well, with the jet stream remaining well north into Canada and the North American atmosphere developing a high-pressure ridge that migrates back and forth from the Intermountain West to the Plains.

The Eastern US remains largely out of the heat, but rainfall totals across the Central US are expected to run near to below normal. The western Corn Belt will be the driest, although some showers are expected to move through north-central Kansas this morning before drifting into western Missouri. A dry forecast remains in place for the Plains and Western Midwest, which will put a major drag on achieving USDA’s trendline yields of 183 BPA for corn and 53 BPA for soybeans. Carryouts are likely headed lower in the August WASDE report.

The biggest risk to wheat during its current advance is a tweet from Pres. Trump stating that he has been on the phone with Pres. Putin or President Zelensky and that both sides would like to pursue a cease-fire and begin building a peace accord. Is that possible? Yes. But that outcome would require one side to accept even more economic damage than it has already endured and recognize the importance of ending the current hostilities. Until then, upside pressure is likely to continue on fears that a deepwater export port could sustain damage that would take months to repair. That would be especially significant heading into the next five months, the most important export window for Black Sea wheat, which the world has traditionally relied upon as its lowest-cost source of supply.