A Houthi strike on two Saudi Arabian tankers and Trump's threat to bomb Iran's infrastructure push crude oil to a two-month high, extending a war-and-weather rally that has soybeans at their best levels in two and a half years even as wheat pauses to book profits after touching fresh contract highs.
Grains open mixed to sharply higher Thursday, with soybeans and corn extending gains while wheat trades in two-sided fashion after Wednesday's surge, as traders continue to weigh an escalating Middle East conflict against a US weather pattern that keeps threatening the Western Corn Belt.
Middle East Conflict Widens as Crude Nears $91
Energy prices are higher after the Houthi militant group attacked two Saudi Arabian tankers in the Red Sea, stoking concerns that the broader conflict will continue to expand; President Trump responded by threatening to bomb Iran's infrastructure. Spot WTI Sept '26 crude oil is up $3.80 per barrel near $90.60, trading to a two-month high, while Sept '26 RBOB is up $0.04 per gallon and heating oil is $0.10 higher, both stretching to new contract highs, a combination that continues to inject a war premium across the entire ag complex.
Wheat Rally Pauses as Black Sea Optimism Fades
Wheat is trading mixed in two-sided fashion Thursday after Wednesday's sharp rally, with better-than-expected results from day two of the North Dakota wheat tour giving traders a reason to book profits following the recent surge to contract highs in both CGO and KC futures. Hopes for a quick resolution to Black Sea supply disruptions appear to be fading, and with the war between Russia and Ukraine still ongoing alongside expectations for lower US and EU production, the path of least resistance is expected to stay higher over time even as volatility works both directions in the near term.
Novorossiysk Shipments Paused After Drone Strikes
Russia has paused shipments out of Novorossiysk, one of its major export centers, during nighttime hours following recent Ukrainian drone strikes on the facility. The disruption adds another logistical constraint to an already strained Black Sea export corridor, reinforcing the freight and supply risk that has been the dominant driver behind wheat's advance this week.
Spring Wheat Tour Nears Its Final Verdict
Day two of the Wheat Quality Council's crop tour estimated yields in the northwest portion of North Dakota at 48 bushels per acre, up from 47.1 a year ago, an improvement on day one's below-average reading from the southern part of the state. The tour concludes Thursday with a final yield and production forecast for North Dakota expected after the close; the USDA is currently forecasting an average yield of 58 bushels per acre, just below the 2024 record of 59.
Export Sales Data Due Ahead of the Open
Weekly USDA Export Sales data is due out Thursday morning and carries the potential to move all three markets. Traders surveyed by Reuters are looking for 2026/27 wheat sales in a range of 200,000 to 550,000 MT, with old-crop wheat sales seen between 8 and 20 million bushels; corn old-crop sales for the week of July 16 are estimated between 400,000 and 800,000 MT, with new-crop business also seen in a 400,000-to-800,000 MT range; and soybeans are expected to show anywhere from net cancellations of 200,000 MT to sales of 400,000 MT for old crop, with 2026/27 business estimated between 1 and 1.8 MMT, meal sales of 100,000 to 575,000 MT, and bean oil ranging from net reductions of 10,000 MT to sales of 10,000 MT.
Ethanol Data and Heavy Fund Buying Support Corn
Wednesday's EIA data showed ethanol production climbing to 322 million gallons last week, up from 306 million the week prior and 1.5% above year-ago levels, landing at the high end of expectations though still below the pace needed to hit the USDA's corn usage estimate for a fourteenth consecutive week. Stocks rose to 24.5 million barrels, just above last year's 24.4 million, while Friday's Cattle on Feed report is expected to show inventories at 102.2% of a year ago at 11.372 million head. Heavy speculative buying Wednesday pushed the managed-money long position in corn back up to roughly 100,000 contracts, with open interest rising nearly 7,000 contracts.
US Weather Keeps the Western Corn Belt in the Crosshairs
Scattered rain fell across the Western Corn Belt over the past 24 hours, but temperatures are set to surge back to much-above-normal readings this weekend, with the northern Midwest and Eastern Corn Belt seeing normal-to-below-normal temperatures over the next few days before a similar rebound. Limited rain prospects across the Western Corn Belt are expected to keep raising crop stress levels, and below-normal precipitation across much of the nation's midsection is expected to stretch into early August; Western Europe remains hot and dry while the east stays cooler with scattered precipitation, and dryness across west-central Brazil continues to support corn harvest even as southern Argentina sees scattered showers and southern Brazil gets moderate-to-heavy rain.
Soybean Demand Stays Firm as Fund Length Approaches 300,000 Contracts
US Gulf FOB soybean offers are holding just $0.10 above Brazilian offers for spot shipment and roughly in line for Sept '26 forward, a narrower premium than earlier in the week, while continued demand interest from China and other buyers, combined with the uncertain Western Corn Belt weather outlook, is expected to keep the path of least resistance to the upside. Crush margins climbed another $0.05 to $3.31 1/2 per bushel, and the combined speculative long position across the soybean complex is approaching 300,000 contracts, still well below the May-26 record of just over 501,000, with Wednesday's open interest up 11,800 contracts in beans, 5,900 in meal, and 3,700 in oil.
Brazil's Export Pace Splits Between Crops
Brazil's ANEC raised its estimate for July corn exports to 3.7 MMT, a modest improvement over last week's 3.44 MMT estimate, while trimming its July soybean export estimate to 13.5 MMT, a 0.26 MMT decline from the week prior. The divergence points to firming corn shipments even as soybean export momentum out of Brazil cools slightly heading into the final week of the month.
Wheat: Contract Highs in Chicago, Profit-Taking Elsewhere
CGO Sept '26 opens $0.03 3/4 higher at $7.09 1/2, trading to a new contract high, KC Sept '26 is $0.01 1/2 higher at $7.65, holding within Wednesday's range, and MIAX Sept '26 is $0.01 lower at $7.28, following a Wednesday session that saw Sept '26 CBOT wheat trade as high as $7.04 1/4, up 26 1/4 cents, with Chicago SRW up 25 to 27 cents, KC HRW leading with 29-to-31-cent gains, and MPLS spring wheat up 20 to 22 cents at midday. Fading hopes for a quick resolution to Black Sea supply disruptions, Russia's paused nighttime shipments out of Novorossiysk, and the ongoing Russia-Ukraine war are keeping the path of least resistance higher with volatility elevated, even as strong North Dakota tour yields prompt some profit-taking Thursday.
Corn: Fresh Eight-Week Highs on Weather and Fund Buying
Sept '26 corn opens $0.04 higher at $4.66 while Dec '26 is up $0.04 1/2 at $4.89 1/4, both trading to fresh eight-week highs, building on Wednesday's session that saw Sept '26 corn trade at $4.60, up 7 1/4 cents, on 7-to-9-cent midday gains driven by spillover support from wheat. Threatening US weather in the Western Corn Belt, hopes for renewed Chinese demand, and Wednesday's surge in speculative buying that pushed the managed-money long back to roughly 100,000 contracts are keeping the path of least resistance higher into today's export sales report.
Soybeans: Nov '26 Hits a New Contract High
Aug '26 and Nov '26 soybeans are both $0.07 1/2 higher at $12.40 1/2 and $12.46 1/2, respectively, with Nov '26 marking a new contract high and Aug '26 reaching its highest level in two and a half years, extending Wednesday's session that saw Aug '26 trade at $12.31 3/4, up 12 1/4 cents, on gains of 12 to 13 cents in the front months. Continued Chinese demand interest, a narrowing Gulf FOB premium over Brazilian offers, and an uncertain Western Corn Belt weather outlook are keeping the path of least resistance to the upside, with next significant resistance for old crop at $12.58 1/4, the May-24 high on the weekly continuation chart.