A sixth straight night of US-Iran strikes sends crude sharply higher and reignites the biofuel bid under soybean oil, while Ukraine's overnight barrage on Russia's shadow fleet keeps wheat's risk premium firmly in place.
Grains open mixed to modestly higher Friday as energy-driven support in the oilseed complex offsets a still-soft corn tape, with wheat shrugging off early weakness to trade $0.01 to $0.06 higher across all three classes.
Middle East tensions are escalating further, with US Central Command striking Iranian targets for a sixth consecutive evening and Iran claiming retaliatory strikes on US forces in Syria and Bahrain as the conflict widens. Spot WTI crude is up $2.00 near $81 per barrel, closing in on this week's high of $81.27, while RBOB is $0.05 higher and heating oil is up $0.06 per gallon. The energy move is filtering directly into the soy complex through the biofuel channel, with soybean oil the session's standout performer.
Black Sea shipping risk is not easing either. Ukrainian forces claim to have struck 12 vessels overnight in Russia's so-called shadow fleet operating in the Black Sea, bringing the total to 159 Russian vessels hit across the Sea of Azov and Black Sea over the past 11 days. Russian forces continued their own attacks on Ukrainian port infrastructure at Odesa and Chornomorsk. With both sides escalating rather than de-escalating, the freight and insurance risk premium embedded in Black Sea-origin wheat is showing no signs of fading.
Thursday's weekly USDA Export Sales report painted a soft demand picture across the complex. Wheat sales of just 235,102 MT for the week ending July 9 marked the lowest tally of the new marketing year and less than half of the same week a year ago, with Japan and Mexico the leading buyers. Corn old-crop sales of 314,962 MT were a marketing-year low, though still more than triple last year's pace, while new-crop bookings of 311,222 MT hit a six-week low even as accumulated new-crop commitments run 14.5% above last year. Soybean old-crop sales of 188,274 MT were a three-week high but down 30.74% year-over-year, while new-crop business of 1.77 MMT posted a marketing-year high with China the dominant buyer.
The wheat supply picture remains comparatively stable, which is keeping Black Sea disruption as the dominant price driver rather than production concerns. The IGC left its world wheat production estimate unchanged at 821 MMT, France AgriMer holds its French wheat crop rating steady at 65% good/excellent, and French harvest progress reached 92% complete as of July 13. With speculative traders still net short roughly 33,000 contracts in Chicago SRW futures after only modest selling Thursday, the setup favors continued upside pressure on any fresh supply shock.
Corn's production picture is deteriorating faster than wheat's. The IGC cut its 2026/27 world corn production forecast by 4 MMT to 1.306 billion tonnes, with the French crop forecast reduced 3 MMT on excessive heat. France's Ag Ministry data this morning showed corn ratings falling another 6 percentage points to just 41% good/excellent, sharply below last year's 72% mark. That deterioration is providing underlying support even as Chicago corn opens only fractionally changed.
US weather is offering a mixed setup heading into the weekend. Much-above-normal temperatures are expected to ease across the central Midwest and Eastern Corn Belt by the end of the weekend, shifting to normal or below-normal by midweek, while the Western Corn Belt and Plains states hold onto normal-to-above-normal heat with little to no precipitation through much of next week. In France, recent rain provided only modest relief before a return to hot, dry conditions, and South America remains seasonably warm, though heavy rain in Rio Grande do Sul risks delaying Brazil's second corn harvest.
South American developments are adding nuance to the corn and soybean outlook. Argentina's BAGE held its corn production estimate steady at 64 MMT, above the USDA's 63 MMT figure, even as harvest progress at 62% lags well behind last year's 80% pace. Argentine soybean plantings have reached 92% for the season, but farmers have priced only 28% of this year's crop, well below the historical average of 35% by mid-July, a slow pace of farmer selling that could tighten near-term deliverable supply if it persists. Meanwhile the Trump Administration's Section 301 action imposing 25% tariffs on Brazilian imports is now confirmed to include ethanol and sugar within its scope, with exemptions carved out for beef, coffee, rare earths, energy products, and aircraft parts, a headline the market has yet to fully digest for its cross-commodity implications.
Wheat: CGO Sept '26 opens $0.02 higher at $6.93, KC Sept '26 is $0.03 1/4 higher at $6.88 1/2, and MIAX Sept '26 is $0.03 higher at $6.88 1/4, with all three classes shrugging off early overnight weakness. Thursday's session had actually closed lower, with Sept '26 CBOT wheat settling at $6.74 3/4, down 2 3/4 cents, after Chicago SRW posted losses of 1 to 3 cents and KC HRW fell 2 to 3 1/2 cents on the day. The combination of persistent Black Sea shipping attacks, steady-to-lower US and EU production estimates, and a still-sizable speculative short position is keeping the path of least resistance tilted higher into the session.
Corn: Sept '26 and Dec '26 open $0.01 lower at $4.40 1/2 and $4.63, respectively, holding within this week's range after Thursday's close at $4.41 1/2, down 6 cents, capped a session that saw most contracts fall 4 to 6 cents. With this week's 100-plus-degree heat largely confined to the northern and southwestern Plains, the market appears to be discounting its impact on the broader Corn Belt for now, even as the lack of rain across the Western Corn Belt remains an unresolved concern. Export commitments running 25% above year-ago levels versus the USDA's forecast of 16% growth suggest the current 3.325-billion-bushel export forecast may still be understating demand by 25 to 50 million bushels.
Soybeans: Aug '26 beans open $0.02 1/2 higher at $11.97 1/2 while Nov '26 is $0.01 1/2 higher at $11.96 1/2, both holding just below the $12 level after Thursday's close at $11.95, down 7 1/4 cents. The real action is in the product markets, where Aug '26 soybean oil has surged 124 points to 73.67, a five-week high, pushing crush margins up another $0.08 to $3.20, while Aug '26 meal is $1.40 lower at $321.50. EPA data showing D4 RIN generation reaching 839 million in June, up 14% from May and the highest level since December 2024, points to a genuine surge in biodiesel and renewable diesel output that is translating directly into stronger soybean oil demand, offsetting a soybean complex still sensitive to the on-again, off-again nature of Chinese buying interest.