Grains are mixed to start Thursday, with exports seen as friendly.
August 6, 2026
Grain Overview
Grain prices are mostly mixed this morning. Wheat futures posted only a modest bounce in the overnight session after reports that a civilian grain vessel carrying wheat was struck in the Black Sea, resulting in casualties. That only reinforces the growing risk surrounding commercial shipping and the continued rise in freight and insurance costs. In our view, the wheat market is still undervaluing the risk of a prolonged disruption to Black Sea exports.
West African and Middle Eastern countries are steadily drawing down wheat supplies that could become uncomfortably low over the next two months. As inventories tighten, they will have little choice but to seek wheat from other origins to keep their mills running. German and French wheat will likely be the first alternatives, lifting European values. Since wheat is a global commodity, rising world prices eventually pull US wheat values higher as well, or they encourage stronger US export demand.
The greatest risk remains further damage to a major deepwater Black Sea export terminal. Even if a peace agreement were reached tomorrow, rebuilding one of those facilities would take many months, if not a full year. As we’ve discussed before, the Black Sea exports roughly 61 MMTs of wheat annually, with more than half of that volume typically shipped between now and December. Very little is moving today, and it’s only a matter of time before importers begin sourcing wheat elsewhere.
Quietly and without much fanfare, China continues to buy US soybeans, and there is growing anticipation of another flash sale involving 12-15 cargoes. China has already purchased more than 4.5 MMTs of US soybeans, with expectations that Pres. Xi could lower China’s remaining 10% soybean import tariff ahead of his September meeting with Pres. Trump to encourage additional private-sector purchases.
Reports continue to show the European Union’s corn crop deteriorating, with production now estimated to be down roughly 20% because of the historic drought. That represents a loss of nearly 400 million bushels and will have a meaningful impact on global corn balance sheets. USDA will eventually need to reconsider its assumption that new crop US corn exports decline by 325 million bushels from the current year, particularly when old crop exports still need to be raised to a new record. Corn remains competitively priced, Europe will need imports from multiple suppliers, and USDA’s current carryout math still appears overly optimistic.
Crude oil is firmer again this morning as uncertainty continues over whether the Strait of Hormuz will reopen anytime soon. As of today, there are no official reports that an agreement has been reached, and vessel traffic remains restricted, despite expectations earlier this week that shipping could normalize by Thursday. Talks and tweets do not move oil or fertilizer. Open shipping lanes do. Much like wheat, the energy market continues to trade on hope rather than results.
Cattle Overview
After a one-day stall on Wednesday, cattle kept climbing yesterday, pushing new recovery highs in the feeder cattle market. Cash cattle reportedly traded at $370 dressed, up $8.00 on the week, while live sales of $235 were seen in Nebraska and Kansas, up $3.00 from last week. Southern bids continue to be passed. There was also a tweet circulating yesterday afternoon reporting trade at $238. Midweek cattle slaughter was estimated at 96,000 head, up 1,000 from the previous week but still 27,000 below a year ago.
There are rumors that restaurant traffic is being impacted by the parasite outbreak, making consumer demand somewhat inconsistent. If that proves true, boxed beef values could begin to stall over the coming week. Even so, it is the exceptionally low slaughter numbers that continue to provide the underlying support behind the rebound in cattle prices over the past week.
The cash feeder cattle index slipped $0.48 yesterday to $348.65. Spot September feeder cattle have now rallied nearly $20.00 from last week’s lows, while January feeders are up roughly $15.00. This has largely been a short-covering rally following the announcement that the Mexican border which will gradually reopen to feeder cattle.
The sharp break in feeder cattle, along with the bearish structure of the deferred contracts that continue to trade more than $9.00 lower in a ladder effect in the contract months, reflects the market’s expectation of a slow but steady reopening of the border. Any disruption or delay in Mexico meeting the required New World screwworm protocols would be the wildcard bullish factor. For now, feeder cattle have reached major technical resistance near yesterdays highs (but could still see a bump of another dollar or so higher if they want) which could lead to a period of sideways, congestive trade after what has been a nearly vertical seven-day recovery.
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