The markets turned their eyes back to the ongoing conflict between Russian and Ukraine the later part of this week. There has been a marked escalation on attacks on both Russian and Ukrainian ports. The Russian Novorossiysk port was attacked resulting in a large fire at an oil terminal. Approximately 1.6-2.1 MMbbl of crude oil are shipped out of the Novorossiysk port. Ukrainian drones hit central Moscow before being shot down by Russian air defense.
All eyes are on next week’s ProFarmer crop tour. Many are wondering what next week’s forecast effect will be on yield. Most of the crop is mature enough to avoid major damage, but conditions will decline. Last week’s U.S. Drought Monitor Map showed improving conditions in the corn belt but revealed declining conditions in the Northern Plains. There has been some talk of increased Chinese interest in U.S. corn. Private exporters reported a sale of 112,000 MT of corn for 2023/2024 to Mexico.
Prices have been driven all week by forecasts for high temperatures and no rain for the oncoming week. The heat dome that appears to be setting up in the central states will increase chances of yield loss in areas where they haven’t seen rain. With the tight U.S. carryout, any reduction in yields could have a large effect on the supply and demand for soybeans in the U.S. There is also talk that China is showing interest in U.S. beans.
Wheat moved higher the end of the week on reports of damage caused by a Ukrainian drone in Moscow’s central business district. Harvest is slowly beginning to start across the CHS Northern Grain area. It was hampered early in the week by rain. Protein is coming in all over the board. India is seeing it’s driest August on record since 1901. This has prompted them to ban exports and they are expected to import up to 10mmt of Russian wheat and tightening world supply. News from the Polish Institute of International Affairs are proposing to ban Russian ships from entering EU ports if merchant ships in the Black Sea are attacked.