Wheat Ignites a New Grain Rally as Bulls Take Control

After US envoys in Russia were dismissed after President Putin took a more aggressive stance on the war with Ukraine, the wheat market erupted pulling corn and beans higher as wheat finished the day with near 50-cent gains, a fresh round of new contract highs and gains of nearly $2 a bushel since the 2026 low. Corn also made another round of new contract highs as prices follow the bullish drumbeats of higher wheat prices and declining US yield while beans also punched to new contract highs. After a streak of slow and steady daily advances without the mid-summer violent pullbacks or daily trade, today’s massive volume and across the board new contract highs has the entire trade on alert as the speculative community is fearing missing out on a larger commodity bull market while end users are terrified, they missed their opportunity to secure their end of year and early 2027 needs. Fear and panic are just slightly ahead of greed in the current market emotional scale.

News and Notes:

• Dry weather into Labor Day is prevalent for most of the Corn Belt with the southern tier growing hotter and falling deeper into the dry pattern. The bean crop still needs water in most areas to realize the potential found in the crop tours, but for now the US is dry.
• Today’s action in the wheat market made it the best candidate for the daily chart. Front month wheat moved to new 26-month highs today and is just a few cents from making a new 32-month monthly close if prices hold through Monday’s close. With the funds still only holding just a small net long position, there is still significant upside if European yields continue to fall and Russia and Ukraine further shutdown Black Sea wheat exports. Both of the grains have strong bullish fundamental and technical foundations into year-end.
• With today’s attention on Russia/Ukraine and wheat it is time to revisit some of the things that sent wheat to $13+ shortly after the war started 4 ½ years ago. The world wheat trader was scared that a complete shutdown of Black Sea region exports would occur, and while it did effect grain movement and prices, it did not have the long-term dire effect many thought it might. But move ahead to August of 2026 and there are significantly more problems with destroyed port facilities and ship traffic than there were during the first year of the war. A further escalation of infrastructure attacks could make the trade’s early war fears come to pass. It should be noted that today’s close at $7.48 December is within 8-cents of the price just before Russia invaded Ukraine in February of 2022. Do not underestimate the wheat market as record low US acres, record EU drought/yield loss and severe restrictions on Black Sea exports are rapidly curtailing world wheat availability.
• China purchased another 10 MBU of beans in today’s flash sales report with weekly ethanol grind improving from last week. High margins for the bio-fuel producers continue to push their production. It has been noticed around several big ethanol plants that they are improving their basis to have enough corn to take advantage of these profits.
• Today’s rapid continuation of the recent bullish trade and wheat’s explosion higher have triggered three Sales Targets. 2027 beans, 2026 wheat and 2027 wheat Sales Targets were all hit and the Sales Targets table on Page 2 has been updated with new price targets and new average prices.

What a 2-week stretch. Just 14-days ago the trade was sweating out the August USDA report with the bears winning the argument that the summer rains and expanded US planted acreage would be found with lower prices to come. Not so fast. Since the report release, Dec corn has rallied 78-cents, November beans have rallied 96-cents and September wheat has advanced $1.00. Although the funds were already holding a huge net long position and beans and big bullish position in corn, their near panic buying spree since the 12th has not quite been historic, but it has been shocking and very much appreciated. The trend is your friend and while several Sales Targets were hit this week, rallies must be rewarded especially at these new bottom line friendly levels. The market does not have any signs (yet) of exhaustion that could trigger a sizable pullback but be prepared if it does. Be ready to buy more upside-call price protection and secure your end user needs.