A Ukrainian drone strike causes significant damage to a Russian grain export terminal near the Kerch Strait overnight, driving wheat sharply higher, while soybean crush margins slide to a four-month low even as a fresh Chinese flash sale offers some support.

Grains trade mixed Thursday, with wheat posting solid gains of 8 to 13 cents across all three classes on fresh Black Sea escalation, corn largely ignoring the spillover strength to trade fractionally lower, and soybeans firming modestly on a new Chinese purchase.

Ukrainian Strike Damages Russian Export Terminal

Overnight, a Ukrainian drone strike caused significant damage to a major Russian grain export terminal near the Kerch Strait in Taman. Russia had reportedly struck a dry-cargo vessel near the Ukrainian port of Pivdennyi along with two more near Odesa, and with no end in sight, both sides continue to target grain storage, infrastructure, and vessels in the region. Rusagrotrans lowered its forecast for Russia's July wheat exports to 1.9 MMT while projecting August shipments between 3 and 3.5 MMT, a figure it expects to move lower if the situation does not improve soon.

Wheat Export Sales Hit a Marketing-Year Low

Weekly Export Sales data showed just 285,165 MT of 2026/27 wheat sold in the week of July 23, compared to trade expectations heading in of 200,000 to 500,000 MT. That total marked a marketing-year low and was less than half of the same week last year. US wheat export shipments of 11 million bushels were at the low end of expectations, leaving year-to-date commitments at 254 million bushels, down 28% from a year ago against the USDA's forecast for a 15% decline; pace analysis suggests the USDA's export forecast may be too high, though given the ongoing Black Sea disruption, no change is expected in August's WASDE report.

EU Slashes Wheat Production and Export Forecasts

The European Commission lowered its 2026/27 wheat production forecast by nearly 2 MMT to 124.4 MMT while also cutting its export forecast by 1 MMT to 29 MMT. Both figures sit well below the USDA's own estimates of 136 MMT in production and 31 MMT in exports, underscoring a widening gap between EU and US supply expectations that continues to reinforce the wheat market's upward bias.

Corn Ignores Wheat's Strength as Spreads Weaken

Corn futures are trading fractionally lower at midday Thursday, with early spillover support from wheat largely being ignored. Wednesday's session closed $0.02 to $0.03 lower with prices settling near session lows, as both Sept '26 and Dec '26 slipped to two-week lows; spreads weakened further, and speculative selling cut the managed-money long position back down to 98,000 contracts even as open interest rose nearly 16,000 contracts.

Corn Export Sales Beat Expectations, EU Cuts Production Sharply

Export Sales data released this morning showed 362,916 MT of 2025/26 corn sold in the week of July 23, within the trade range of 300,000 to 600,000 MT and a three-week high, 6.5% above the same week a year ago. New-crop 2026/27 bookings of 1.062 MMT exceeded the trade range of 0.5 to 1 MMT, marking a marketing-year high even though it remains 43.8% below the same week last year. The European Commission slashed its 26/27 corn production forecast by 13.4% to 51.9 MMT while raising its import forecast by 4.9 MMT to 24 MMT, both figures well off the USDA's estimates of 53.8 MMT production and 22.5 MMT imports, while Datagro is forecasting Brazil's 26/27 corn production at 147.5 MMT, well above the USDA's 139 MMT estimate.

Ethanol Production Rebounds Above Pace for First Time in 15 Weeks

Wednesday's EIA data showed ethanol production rebounding to 330 million gallons, up from 322 million the previous week and above the pace needed to reach the USDA's corn usage estimate for the first time in 15 weeks. Combined with corn export commitments running 24% above year-ago levels against the USDA's forecast for 16% growth, the data suggests the USDA's export forecast of 3.325 billion bushels may still be understating demand by 25 to 50 million bushels.

Soybean Crush Margins Fall to a Four-Month Low

Wednesday's session saw soybean prices slightly lower across the complex, with beans down $0.01 to $0.04, meal steady to $1 lower, and oil off 35 to 80 points; both Aug '26 and Nov '26 traded to two-to-three-week lows. Crush margins fell another $0.11 to $2.65 1/2 per bushel, the lowest level in four months, even as ADM — the source's parent company — announced plans to expand its North American crush capacity by 25 million bushels, roughly 5%, through upgrades at four existing facilities in Frankfort, Indiana; Deerfield, Missouri; Lincoln, Nebraska; and Spiritwood, North Dakota, with completion expected between mid-2028 and early 2029.

Fresh China Flash Sale Offers Support Ahead of Sinograin Auction

USDA reported a private export sale of 132,000 MT of soybeans to China for 2026/27 this morning, helping soybeans trade 1 to 3 cents higher at midday. China's Sinograin is set to auction off 500,000 MT of soybeans Friday to free up storage space for incoming US beans, and with the market having little wiggle room for US yields slipping below the current 53-bushel-per-acre trendline forecast if China fulfills its 25 MMT purchase commitment, attention remains on whether Beijing continues stepping in following recent price weakness. US Gulf FOB offers remain $0.10 to $0.20 below Brazilian offers for September through November shipment.

Soybean Export Sales Beat Expectations Across the Board

Old-crop soybean sales of 302,260 MT in the week of July 23 exceeded the estimated range of net reductions of 200,000 MT to sales of 300,000 MT, marking a five-week high and running 10.49% above the same week last year. New-crop sales of 1.333 MMT also exceeded the expected range of 0.7 to 1 MMT, though the total marked a three-week low; new-crop commitments have since spiked to 274 million bushels, a four-year high and up 146% year-over-year. Soybean meal sales of 114,733 MT fell short of the estimated 200,000-to-550,000 MT range, while bean oil posted a net cancellation of 1,099 MT, within the expected range. Datagro is projecting Brazil's 26/27 soybean production at 185.6 MMT, in line with the USDA's 186 MMT estimate, with planted area up 0.3% to 49.3 million hectares.

Wheat: Fresh Black Sea Strike Drives Broad-Based Gains

CGO Sept '26 is trading at $6.69 1/4, up 8 1/2 cents, with Chicago SRW contracts up 8 to 9 cents and KC HRW 12 to 13 cents higher at midday, while MPLS spring wheat is up 10 to 11 cents in the front months. The gains follow Wednesday's close, when CGO Sept '26 settled at $6.63 1/2, up $0.02 3/4, KC Sept '26 closed at $7.30 3/4, up $0.05 1/4, and MIAX Sept '26 finished at $7.11 1/2, up $0.06 1/2, all closing well off session highs. The overnight Ukrainian strike on Russia's Taman export terminal, combined with the EU's sharply lower production and export forecasts, is keeping wheat's path of least resistance tilted higher even as weak export sales data caps some of the enthusiasm.

Corn: Fractionally Lower as Wheat Spillover Fails to Take Hold

Sept '26 corn is trading at $4.48 1/2, down 1/2 cent, with the CmdtyView national average cash corn price up 6 3/4 cents at $4.28 1/4. The session follows Wednesday's close, which saw prices $0.02 to $0.03 lower near session lows as both Sept '26 and Dec '26 slipped to two-week lows. Strong export sales data and the EU's steep production cut are providing underlying support, but corn is largely shrugging off wheat's overnight strength to trade little changed into midday.

Soybeans: Firming on Fresh Chinese Demand

Aug '26 soybeans are trading at $11.80 3/4, up 2 3/4 cents, with the cmdtyView national average cash bean price up 5 3/4 cents at $11.52 1/4, while soymeal futures are $0.40 to $0.90 higher across the front months and soybean oil is down 20 to 50 points. This morning's fresh 132,000 MT private export sale to China, along with export sales data that beat expectations across old- and new-crop categories, is helping soybeans hold gains even as crush margins sit at a four-month low following Wednesday's session.