Corn and soybeans retreat from repeated contract highs as record fund length encourages consolidation, while collapsing Ukrainian exports, renewed attacks on Odesa and hot, dry US finishing weather keep supply risks firmly in focus.
Global grain markets start Wednesday, 2 September, mostly lower as prices pull back from the recent surge. Heavy speculative positioning in corn and soybeans is increasing correction risk, but the underlying fundamental picture remains supportive as Ukrainian exports deteriorate sharply, US crops face difficult finishing weather and soybean demand continues to benefit from strong crush and Chinese buying.
Ukrainian Grain Exports Collapse as Black Sea Disruption Deepens
Black Sea logistics remain one of the most important supportive factors for wheat. Ukrainian food exports fell to 2.15 MMT in August, down 41.5% from June, while grain exports dropped to only 774,000 MT, down 67%. Ukraine’s largest farmers’ union is preparing for the possibility that deep-water ports remain closed until at least early 2027, highlighting how what began as a logistics problem could remain a structural constraint on regional grain availability.
Fresh Strikes on Odesa Offset Russia’s Export-Duty Suspension
Russia suspended grain export duties through the end of 2026, a move that should theoretically improve the competitiveness of Russian grain and increase export incentives. At the same time, Russian missile strikes targeted Odesa overnight and damaged infrastructure, reinforcing concerns over Ukraine’s ability to move grain through its principal maritime channels. The two developments pull wheat in opposite directions: cheaper Russian exports are bearish, while continued disruption to Ukrainian flows maintains a substantial geopolitical risk premium.
European Wheat Exports Recover Toward Last Year’s Pace
EU soft wheat exports reached 4.16 MMT as of August 30, leaving shipments only 3.7% below last year. The narrowing year-over-year gap suggests European wheat is becoming increasingly relevant as Black Sea availability remains constrained. This provides demand support for European origins, although Russia’s suspension of export duties could create stronger price competition if Russian grain can physically reach international buyers.
Corn Pulls Back as Record Fund Length Raises Correction Risk
Corn is retreating after December futures reached a new contract high for a fourth consecutive session overnight. Managed money is estimated to hold a record net long position of around 481,000 contracts, with open interest increasing by another 20,000 contracts in Tuesday’s trade. The market remains fundamentally supported, but increasingly crowded positioning and overbought conditions raise the probability of profit-taking, with $5.25 identified as an important area of support for Dec ’26 futures.
Ethanol Demand Remains Solid but Slightly Below USDA’s Required Pace
US corn use for ethanol reached approximately 475 million bushels in July, up 3.7% year over year, while total use through the first 11 months of 2025/26 reached 5.068 billion bushels, 1.8% above last year. To reach the USDA forecast of 5.550 billion bushels, August usage would need to reach 482 million bushels compared with 463 million a year earlier. Weekly ethanol production was nearly unchanged at 1.11 million barrels per day, while stocks declined by 171,000 barrels to 25.036 million, leaving the demand picture broadly supportive but not strong enough on its own to prevent a technical correction.
Soybean Crush Strength Reinforces Domestic Demand
July soybean crush reached 221.9 million bushels, exceeding expectations and rising 1.89% from June and 8.16% year over year. Soybean oil stocks fell 6.4% from June to 1.963 billion lbs, although they remained above market expectations of 1.878 billion lbs. Combined biodiesel and renewable diesel production reached a record 515 million gallons in June, while soybean oil use also hit a record monthly level of 1.556 billion lbs, maintaining a strong underlying domestic demand story for the soybean complex.
Chinese Buying Continues to Cushion the Soybean Correction
Another private sale of 202,000 MT of US soybeans to China was reported for 2026/27 shipment, adding to the recent run of Chinese purchases. This demand is particularly important as the market remains uncertain about final US production. Despite Wednesday’s pullback, poor finishing weather and continued Chinese buying are expected to limit the downside, with the $12.50–$12.75 range in Nov ’26 futures viewed as an important area of support until the size of the US crop becomes clearer.
Hot and Dry Conditions Keep US Yield Risk Alive
Recent storms brought meaningful rainfall from southeastern South Dakota through northern Iowa, southern Minnesota and central Wisconsin, but the central and southern Midwest remain hot and dry. Crops are being pushed rapidly toward maturity, potentially at the expense of final yield, while Central and Western Europe are also returning to a hot and dry pattern and drought is deepening in southern Ukraine. Weather therefore continues to restrict the extent of any correction in corn and soybeans while adding longer-term concern for Black Sea wheat production.
Stronger Dollar and Softer Energy Add Macro Pressure
Macro markets are providing some resistance to agricultural prices. October WTI crude is down $1.00/barrel at $89.20 after reaching fresh contract highs overnight, while heating oil is down $0.10/gallon and the US dollar has strengthened to a three-week high. A stronger dollar is a headwind for US export competitiveness, while softer energy prices remove some immediate support from soybean oil and the wider biofuel complex.
Wheat Futures
Wheat starts Wednesday under pressure despite the continuing Black Sea risk, with Dec ’26 Chicago wheat down $0.11 at $7.71 1/2/bu, Dec ’26 Kansas City wheat down $0.15 1/2 at $8.30/bu, and Dec ’26 Minneapolis wheat down $0.07 at $7.70/bu. Russia’s suspension of export duties adds competitive pressure, but renewed strikes on Odesa, Ukrainian grain exports down 67% in August and the possibility of prolonged deep-water port closures continue to limit the bearish impact.
Corn Futures
Corn is correcting after another overnight contract high, with Dec ’26 corn down $0.08 1/2 at $5.37 1/2/bu. Record managed-money length near 481,000 contracts and overbought conditions encourage profit-taking, while steady ethanol demand and continued concern over US finishing weather provide support beneath the market.
Soybean Futures
Soybeans are also retreating after reaching a new contract high for a sixth consecutive session, with Nov ’26 soybeans down $0.14 at $13.04/bu. Oct ’26 soybean meal is down $5.00 at $340.70, while Oct ’26 soybean oil is down 50 points at 71.95. The combined speculative long across the soybean complex is now just above 500,000 contracts and close to the all-time high, increasing correction risk, but record soybean-oil demand, strong crush activity, continued Chinese purchases and poor US finishing weather continue to provide substantial underlying support.