Volatility Returns as Weather and Geopolitics Drive Grain Markets

A round of new contract or at least recent highs for all three markets was the overnight feature before several pieces of news came out about sunrise to quickly move the market from solid gains to sharp losses. Wheat was the most volatile as an erroneous report came out that Ukraine’s port at Odessa was part of a plan for re-opening and a potential cease fire to allow all Black Sea traffic to sail. That report was later denied by the Ukrainian Ag Minister, which kept the markets on their daily roller coaster. Wheat’s 52-cent morning range caused enough heartburn for all the bulls to take profits in corn and wheat. While the markets closed well off their lows with beans scraping out decent gains and corn finishing flat, wheat traders remained cautious. US weather forecasts are showing a return of WCB and Plains heat next week, so the US production potential is still very debatable regardless of the other world events.

News and Notes:

• Hotter and drier conditions for the WCB and Plains will remain into early August with several major models now taking that hot/dry outlook further east across the Mississippi in the next 7-10-days.This would be toward the end of the US pollination cycle and continue to take top end potential from many corn acres. Bean weather becomes more important with each forecast as a hot/dry August would reset all US yield expectations and prices.
• The charts on Page 2 are concentrating on Dec corn. The daily, weekly and monthly for the contract show the daily broke out earlier this week, while the weekly chart had its own breakout and best close in more than 7-weeks. The monthly is truly impressive and shows July ’26 is shaping up to be the best monthly gain in the life of the Dec ’26 contract. If corn just does not collapse next week, all three charts will be showing a green light for the funds, who are still only holding a modest 600 MBU position for a bullish trending market. Funds can double their length and still only be holding 80% of the record spring length earlier this year. The last chart is the weekly chart for Sep diesel, and it shows the last two weeks breakout over $5 on the second closure of the Stratis and another key route being closed at the Red Sea. Russia’s diesel refining capacity is only running about 50% as both sides of their war are targeting shipping and energy infrastructure in the past week. It is hard to see a clean fast retreat of energy prices heading into late summer.
• The July Cattle on Feed report is slightly bearish with a third consecutive monthly herd increase. After the brutal collapse in futures and cash prices over the last several weeks, the cattle market is simply looking for some firm footing to begin to heal. Inflation concerns are part of the issue as higher gas prices will cut into demand for some of the beef cuts at the higher end of the price scale.
• The option positions that were recommended in June were rolled over during this week’s rally as futures Sales Targets were hit. The trading profit added to the sales prices and will continue to be used as a way to add premium in an increasingly bullish market. Please call us with questions about reactivating a dormant account at another broker or getting your questions answered about potentially opening a new account. This year’s marketing plan will need all the tools in the toolbox.
• Weekly Changes: Corn + 19 1/2 (Sep ‘26), + 20 (Dec ‘26), Beans + 36 3/4 (Sep ‘26), + 50 1/2 (Nov ‘26), Wheat – 4 3/4 (Sep ’26), Crude + 682, Diesel + 340, Dow - 251, US Dollar + 716, Cattle + 264, Feeder Cattle - 62, Hogs  + 120 , Cotton + 135, Milk - 61 (17.21).

Our apologies about the lack of a daily comment on Thursday despite a very busy day of news and trade. Hackers compromised my laptop and tried to drain my bank accounts and charge about a dozen IPads to my travel credit cards. Fortunately, the fraud system at our banks and credit card company stopped them, but after they froze my accounts, both my laptop and desktop had to have emergency attention and taken off-line, so there was no way to get out the update. Be careful with your information. This week was much appreciated for everyone’s on-farm income and highlights just how many factors can move our daily prices. The big three drivers will remain US weather (better but still not great), Chinese demand (improving gradually) and the world political climate (seemingly getting worse by the minute). This week also highlights why rallies should be sold and sales targets set with your buyers. The overnight gains followed Friday’s early morning vicious break lower shows how fragile the traders have become on any unexpected news. Please see the updated Sales Targets and have a great weekend.