Market Report 28.08.2026

Black Sea risks, strong fund flows and El Niño fears keep grain and oilseed markets supported

General market overview

🚢 Black Sea risk remains a key driver for grain markets after renewed attacks. Ukraine struck Russia’s fifth-largest oil refinery, while Russian drone attacks continue to disrupt operations at Odesa ports. This keeps a geopolitical premium embedded in the grain complex.
📑 Macro trader interest in agricultural markets has increased this week, bringing more speculative capital into grain and oilseed futures. Combined with strong technical breakouts, this is supporting the rally, although it also raises the risk of short-term profit-taking ahead of the weekend.
🌎 Expectations for a very strong El Niño this winter remain an important medium-term factor. Markets are increasingly pricing production risks across South America and Asia.

🫛 Soybean complex

📈 Soybeans posted another high overnight, while the market has closed higher every day since Monday as buyers remain in control. The current rally looks strong even as early new-crop pressure approaches, although the market is becoming overheated in the short term.
🛢️ Soybean oil received support after reports that the White House is considering adding 500 million gallons to 2027 biofuel quotas to compensate for expanded exemptions for small refineries. Expectations for a strong El Niño are also increasing the risk of lower palm oil production in Asia.
🏭 Soybean meal is also supporting the complex. The December contract reached a two-year high this week, strengthening the broader bullish tone across soybean products.
🌦️🇺🇸 US weather remains supportive for soybeans. Warm and dry conditions may benefit excessively wet areas, but drier parts of the western belt remain under stress. The share of US soybeans under drought increased by 2 percentage points to 28%, compared with 11% last year.
🇨🇳 SinoGrain will auction another 68,000 t of reserve soybeans next week. This shows that China continues to actively manage domestic supply, although the volume itself does not materially change the bullish picture while import demand remains strong.
🚢🇺🇸 US soybean export sales for the week ended August 20 were strong: 73,900 t for the current marketing year and 2.478 MMT for the new crop, for a total of 2.552 MMT. Cumulative new-crop sales reached 31.7% of USDA’s forecast, compared with the 24.2% five-year average.
🚢🇺🇸 Soybean meal sales were also active at 427,500 t in total, including 322,800 t for the new marketing year. Soybean oil sales remained minimal at just 360 t for the current year and zero for the new crop.
📉 Soybean basis weakened across the Midwest yesterday as crush margins deteriorated. Processor bids in Decatur, Illinois, fell by $0.05, while bids in Lafayette, Indiana, and Lincoln, Nebraska, declined by $0.10. This is a local headwind for the physical market.

Bottom line: The soybean complex remains supported by strong export sales, soybean oil strength linked to biofuel policy, a two-year high in soybean meal, US weather stress and El Niño risks for Asia and South America. However, the rally looks overheated in the short term, leaving profit-taking ahead of the weekend as a key risk.

🌽 Corn

📈 Corn resumed its 13-day rally after yesterday’s pause as the market continues to reassess an increasingly bullish global fundamental picture. Technical momentum remains strong, while expectations for tighter balances are keeping buyers active.
🇨🇳 The possibility that China is waiting for lower tariffs before buying US feed grains has become an important demand signal for corn. Current US balance sheets do not include significant Chinese demand, so any purchases ahead of the late-September summit could trigger a noticeably bullish reaction.
🌦️🇨🇳 Weather problems across the North China Plain are increasing the probability of stronger corn import demand. If crop stress translates into actual purchases, the US could gain an additional export driver.
🇫🇷 French corn conditions fell another 1 percentage point to 28% good/excellent, compared with 62% last year, remaining the lowest on record. An expected farmer aid package in France highlights the scale of production stress.
🇪🇺 The EU’s 2026 corn import forecast was raised by 4% yesterday and may increase further once harvesting begins and drought losses are assessed more fully. This supports global demand for alternative origins.
🌽🇺🇸 The share of US corn under drought declined by 1 percentage point to 27%, but remains well above 5% last year. Warm and mostly dry Midwest weather through the end of next week keeps attention on the final stage of crop development.
🚜🇦🇷 Argentina’s corn harvest reached 88%. This adds South American supply, but so far it has not outweighed bullish signals from the EU, US and potential Chinese demand.
🚢🇺🇸 US corn export sales for the week ended August 20 totaled 31,200 t for the current marketing year and 1.066 MMT for the new crop, for a combined 1.098 MMT. Cumulative new-crop sales reached 15.3% of USDA’s forecast, versus the 19.9% five-year average.
📑 Today’s COT report is expected to show a Managed Money net long of around 345,000 contracts. This is already a substantial position, but remains below the record net long of 435,000 contracts, leaving room for further fund participation.

Bottom line: Corn remains supported by a strong technical trend, tightening global balance risks, record-low French crop conditions, potential Chinese demand and a large expected fund long. Profit-taking ahead of the weekend is possible, but the broader market direction remains higher.

🌾 Wheat

📈 Wheat set another contract high yesterday and again today as attacks around Black Sea infrastructure continue to sustain geopolitical risk premium. Repeated disruptions at Odesa ports following Russian drone attacks are increasing concerns over the reliability of Ukrainian exports.
🚜🇺🇦 Ukraine is expected to reduce winter wheat planting area, while dry conditions are already slowing sowing. This adds a medium-term production risk for the next Ukrainian wheat crop.
🌦️🇺🇸 Worsening drought across the southern US Plains remains a strong supportive factor. A heat dome over Oklahoma and Texas will sharply limit rainfall chances over the next 10 days, while temperatures from western Kansas southward are expected to regularly exceed 100°F from the weekend.
🌾🇺🇸 The share of US HRS wheat under drought jumped by 17 percentage points to 80%, compared with just 13% last year. This adds support to spring wheat, although better rainfall chances next week across the southern Canadian Prairies and far northern US Plains could partially ease stress.
🇷🇴🇧🇬 Romania and Bulgaria remain beneficiaries of Black Sea export disruptions, with wheat prices in both countries trading near 1.5-year highs. This confirms that buyers continue to reassess the availability of regional origins.
🇪🇺 The European wheat balance tightened after the EU ending stocks estimate was reduced to 11.3 MMT, down from 12.9 MMT last month. Lower stocks strengthen support for European prices amid Black Sea tensions.
🚢🇺🇸 US wheat export sales for the week ended August 20 totaled 402,500 t for the current marketing year and zero for the new crop. Cumulative sales reached 39.2% of USDA’s forecast, compared with the 42.9% five-year average, while the required pace is 239,000 t per week.
📈 Wheat technicals remain bullish. A Chicago December close above 767 resistance would mark another important victory for buyers. Both fundamental and technical signals continue to point toward further upside.

Bottom line: Wheat remains supported by Black Sea infrastructure attacks, disruptions at Odesa ports, expected reductions in Ukrainian winter wheat acreage, drought across the southern US Plains, sharply expanding HRS drought and lower EU stocks. As long as these factors persist, the path of least resistance remains higher.