Overnight, the grain trade exhausted itself on testing of the May highs in wheat and soybeans.
July 16, 2026
Grain Overview
Chicago wheat pushed to new annual highs overnight, as traders aggressively priced in growing uncertainty surrounding Black Sea grain exports. Ukraine expanded its attacks on Russian shipping, targeting tankers and tugboats, while Russia intensified strikes on Ukraine’s key export ports. At the same time, restrictions remain in place through the Don-Azov shipping corridor, a route that normally handles roughly one-quarter of Russia’s wheat exports.
With Ukraine estimating that repeated attacks have already reduced its Black Sea export capacity by about one-third, the market is beginning to question the reliability of grain shipments from both of the world’s largest wheat exporting regions. Those geopolitical concerns, combined with last week’s bullish USDA report and heavy fund short covering, propelled Chicago wheat to fresh highs for the year.
Corn futures are also finding support as it is difficult to find offers for corn and sunseeds out of the Black Sea region. With the ongoing tax war between Russia and Ukraine over vessels and each other’s ports, insurance rates are also exploding. It was also reported that an individual Ukrainian exporter had to declare a force majeure on several cargoes of Ukrainian corn. For now, it appears the Azov Sea and the Kerch Strait are shut down for the grain trade. If attacks continue to intensify on both sides, it seems that they are leveraging each other to win the war.
Yesterday afternoon, the Trump administration announced Section 301 tariffs of 25% on imports from Brazil. Beef, orange juice, and energy products were excluded from the new tariffs. A separate investigation into alleged forced labor practices in Brazil could result in an additional 12.5% duty, with a decision expected next week.
These tariffs are scheduled to take effect on July 22, and they could become an important factor for the soybean market. They reduce the ability to simply shift purchases to Brazilian soybeans whenever US prices rally sharply because of a domestic supply shortfall. If August weather creates a crop scare that trims production by even 1 BPA, the familiar announcement of Brazilian soybean cargoes heading into the southern United States is unlikely to occur.
After last night’s strong push to new recovery highs of 474.2 on December corn, 1206.6 on November beans, and Chicago wheat getting within a whisper of new highs near 7.00, the morning trade has stumbled on profit-taking and hedge anticipation. Further gains are likely as the US will be garnering better exports with a third of Ukraine’s export capabilities offline not for the weekend, but for a year at minimum. The loaders cannot be repaired and are damaged to the point where they must be rebuilt. The seasonality of grain pricing turns lower from July 20 to August 1. Old-crop grain sales will intensify over the next several weeks, and recent strength will be checked. Major lows were set on June 30, with trend reversals evident. This does not stop the market from being price-checked.
Cattle Overview
The cascading fall in the cattle trade continued yesterday, with a change in color. Feeder cattle were bull spreading heavily, with August trying to gain traction above weekly chart support, while deferred November-through-2027 feeder cattle contracts continued to trade at extreme discounts of over $40.00. The feeder index declined by $1.65 to 369.06 and is anticipated to decline again today. Meanwhile, box beef losses continued, with choice off $0.49 and select off $2.33.
The negotiated fed cattle trade did move lower as anticipated, with northern live sales declining $8 to 13 on the week, clearing at $235-240. Dressed sales also declined by $12-17, were at $3 to 75-380. Southern sales will come in this week, sharply lower as well. Even though the board was carrying big discounts prior to the rollover, the board is paying for the cash break in the size of its decline.
Per yesterday’s video, extreme support on the multi-year moving average support for live cattle should produce a ”catch the falling knife” potential low at 225- 226 for October cattle. Meanwhile, August feeders are right on top of their key support level formed yesterday at 346-347. These numbers can be violated for one day, but the next day, the market must recover sharply. If not, a long-standing five-year bull market will break bullish trends. If August cattle close lower today, it would mark a record 14th lower close and be lower on 19 out of 20 days.
Any Questions and to inquire about Livestock Risk Protection Insurance Call: 701-222-0221