Month-End Profit-Taking Pressures Grains as Black Sea and US Weather Risks Remain

Grain markets open the final session of August lower after last week’s powerful rally, but constrained Russian exports, hot and dry US finishing weather and strong Chinese soybean demand keep the underlying supply-risk story intact.

Agricultural markets start Monday, 31 August, broadly lower despite sharply higher energy prices and fresh overnight contract highs in corn and soybeans. Month-end positioning and profit-taking are weighing on prices after last week’s strong gains, while traders continue to balance possible progress toward a Black Sea shipping corridor against severely restricted Russian exports, deteriorating US finishing weather and increasingly large speculative positions.

Black Sea Corridor Hopes Remove Some Wheat Risk Premium

Wheat is leading the downside after Turkey reportedly pushed over the weekend for a Black Sea shipping corridor aimed at restoring grain flows. The possibility of improved maritime access reduces part of the geopolitical premium accumulated during last week’s rally, when winter wheat markets reached three-year highs. The immediate reaction is bearish for wheat, although the underlying export situation remains highly constrained.

Russian Export Constraints Keep the Wheat Balance Tight

The softer Monday opening contrasts sharply with the physical situation in Russia. Russian wheat exports in August reached only 2 MMT, down 55.6% year over year, while September shipments are expected at just 1.8–2.2 MMT. Domestic Russian grain prices have fallen 36% since June as exports through the Black Sea and Sea of Azov remain halted, while excess domestic grain supply is estimated at 20–25 MMT. This disconnect between available grain and exportable grain continues to provide underlying support to international wheat prices despite Monday’s correction.

Fund Positioning Leaves Wheat Sensitive to Both Headlines and Profit-Taking

Managed money continued to reduce bearish exposure in Chicago wheat during last week’s rally. Funds bought more than 12,000 contracts, trimming their Chicago net short to around 14,000 contracts, while another 9,000 contracts of buying increased the Kansas City net long to around 44,000 contracts, the largest since April 2022. With Chicago wheat having rallied sharply late last week, the reduced short position means fewer forced short-covering buyers remain, increasing sensitivity to Monday’s more conciliatory Black Sea headlines.

Corn Pauses After New Contract Highs

Corn is starting the final August session modestly lower after both September and December contracts reached new contract highs overnight. Month-end pressure may contribute to the pullback following last week’s gains of 28 1/4 cents in September and 28 cents in December. The correction remains limited, however, as expectations for lower US and EU production combined with potentially stronger usage continue to support the broader bullish supply narrative.

Speculative Corn Length Reaches Extreme Levels

Fund positioning has become a major source of both strength and risk in corn. Managed money added 126,008 contracts through August 25, taking the net long to 376,513 contracts, while outright speculative longs reached a record 465,500 contracts. Additional buying later in the week may have pushed the net position beyond the previous record of 429,000 contracts from October 2010. This concentration can sustain momentum while fundamentals remain bullish, but it also leaves corn vulnerable to aggressive liquidation if sentiment changes.

Brazil Adds Supply Competition, but US and EU Concerns Dominate

South American supply offers a counterweight to the tighter Northern Hemisphere outlook. Brazil’s 2026/27 corn crop is estimated at 145.6 MMT, 0.6 MMT above the previous estimate and well above the current USDA figure of 139 MMT, while first-crop planting in the center-south has reached 11%. For now, however, expectations for lower US and EU output and potentially higher global usage remain the stronger price drivers, limiting the bearish impact of larger Brazilian production prospects.

Chinese Demand Continues to Underpin Soybeans

Soybeans are pulling back from fresh overnight contract highs, but export demand remains a major source of support. China’s new-crop US purchases have reached 6.8 MMT, with another 4.87 MMT booked to unknown destinations, while Friday brought another private sale of 182,000 MT to China. Total 2026/27 commitments stand at 14.334 MMT, nearly double the same point last year, leaving limited room for US yields to disappoint without tightening the balance further.

Biofuel Policy Keeps Soybean Oil Volatile

The soybean complex also remains sensitive to expected US biofuel-policy decisions. The administration is considering higher 2027 blending quotas to offset reduced demand resulting from larger small-refinery exemptions, with a decision on the exemptions expected Monday. Soybean oil is lower this morning and crush margins have pulled back $0.14 to $2.30/bu, showing that policy uncertainty remains an important counterweight to strong soybean export demand.

Hot, Dry US Weather Keeps Late-Season Yield Risk Alive

US finishing weather remains one of the most supportive fundamental factors entering September. Weekend rainfall favored the northern Midwest, but much of the central US stayed dry, with temperatures above 100°F across the central and southern Plains and far western Corn Belt. The South is expected to remain hot and dry this week, accelerating maturity at the expense of yield potential, while soybean ratings are expected to fall another 2 percentage points to 58% good to excellent and corn ratings another point to 56%. Higher crude oil near $86.25/barrel and a moderately weaker US dollar offer additional background support, although neither has prevented Monday’s grain-market correction.

Wheat Futures

Wheat starts Monday sharply lower after last week’s surge. Dec ’26 Chicago wheat is down $0.12 at $7.72/bu, Dec ’26 Kansas City wheat is down $0.12 1/2 at $8.31 3/4/bu, while Dec ’26 Minneapolis wheat is down $0.07 at $7.62 1/2/bu. Turkey’s attempt to revive a Black Sea shipping corridor is encouraging profit-taking, but Russian exports of only 2 MMT in August and expectations for similarly weak September shipments continue to provide fundamental support beneath the market.

Corn Futures

Corn is modestly lower after setting new contract highs overnight, with Sep ’26 corn down $0.01 at $5.11/bu and Dec ’26 down $0.01 at $5.35 1/2/bu. Month-end pressure and extremely large speculative length are encouraging consolidation, while expectations for lower US and European production, less favorable finishing weather and potentially stronger usage continue to limit the downside.

Soybean Futures

Soybeans are also retreating from overnight contract highs, with Sep ’26 soybeans down $0.04 1/2 at $12.71 3/4/bu and Nov ’26 down $0.05 at $12.82 1/2/bu. Oct ’26 soybean meal is down $3.90 at $338.60, while Oct ’26 soybean oil is down 82 points at $0.70/lb. Strong Chinese buying and increasingly unfavorable US finishing weather provide underlying support, while profit-taking, weaker crush margins and uncertainty around Monday’s refinery-exemption decision are limiting the market at the start of the week.