December corn (ZCZ26) futures on Friday rose 3 cents to $5.36 1/2, hit a contract and three-year high, and for the week were up 28 cents. November soybeans (ZSX26) rose 20 cents to $12.88, hit a contract and 2.5-year high, and for the week gained 48 1/2 cents. December soybean meal (ZMZ26) futures rose $8.00 to $348.90, hit a more-than-two-year high for the contract, and for the week rose $23.10. December soft red winter (SRW) wheat (ZWZ26) on Friday rose 23 1/4 cents to $7.84, hit a contract and three-year high, and for the week were up 84 3/4 cents. December hard red winter (HRW) wheat (KEZ26) gained 22 cents to $8.44 1/4, hit a contract and three-year high, and for the week rose 67 3/4 cents.
An uncommon convergence of bullish fundamental elements, as well as bullish technicals, are driving the rip-roaring bull runs in the grains.
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Presently, the grain market bears are unwilling to stand in front of a steaming locomotive. However, veteran grain traders are keeping in the back of their minds an adage that asks: “When is a market the most very bullish?” The answer is: “At the very top in price.”
Corn and Wheat Taking Turns at Daily Price Leadership
The corn futures market bulls indeed had another very good week, including a technically bullish weekly high close in December corn on Friday. However, the market is now technically short-term oversold and due for a routine downside price correction soon. Traders will keep watching the weekly USDA crop progress reports on Monday afternoons.
Heavy rains in the eastern U.S. Corn Belt over the past few weeks have leaned price-bullish for the corn and soybean markets, as some yield reductions likely occurred, supported by the Pro Farmer annual crop tour showing reduced yield potential for both corn and soybeans.
Meantime, high temperatures and excessive rain have battered China’s key corn, soybean, and cotton-growing regions since mid-July, according to reports. The weather has threatened crop quality and yield losses, potentially boosting imports of feed grains and cotton, including from the U.S. Those weather risks are compounded growing concern that a strengthening El Niño weather phenomenon could trim output in key Southern Hemisphere crops in the coming months.
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Wheat Supplies Coming Out of the Black Sea Region Continue to Be Sharply Reduced
The winter wheat futures markets Friday saw more strong buying interest amid worries about grain supplies coming out of the Black Sea. Consulting firm SovEcon further cut its estimate of Russian wheat exports in August by 300,000 metric tons to 1.9 million MT. That compares with 4.5 MMT a year ago and an average of 5.0 MMT. More than 95% of Russia’s combined Black Sea and Sea of Azov grain export capacity is currently shut down, the firm noted, alongside damage to Ukraine’s Black Sea ports. HRW futures have received extra support from the Black Sea situation as alternative origins are not an easy substitute, especially in the wake of a weaker EU crop.
Good harvest weather has been occurring in the northern U.S. Plains and Pacific Northwest. Most other U.S. wheat harvesting is complete. Planting of 2027 wheat in the southwestern U.S. Plains should begin soon, but rain and cooler temperatures must fall first before planting begins even in some of the irrigated fields.
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Soybeans Supported by Good Export Demand for U.S. Beans
The soybean complex futures on Friday got more support on fresh export demand from China, as well as from other countries. The USDA reported 182,000 MT of U.S. soybean sales for delivery to China and 226,000 MT to unknown destinations, along with 100,000 MT of soybean meal to Germany and 100,000 MT to the Netherlands all during the 2026-27 marketing year.
Technical buying from the speculators has been featured in the soybean and meal markets. The concern is that bullish traders have quickly moved to one side of the boat.
Most soybeans in the northwestern Corn Belt will benefit from at least some rain during the next two weeks and some small increases in yields are likely with the rain too late for a major boost in production.
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In the coming months, cuts to Malaysian palm oil production, a substitute of soy oil, will be monitored as well as any impacts of the El Niño weather phenomenon. Meantime, recent tensions between the U.S. and China over trade will also heighten concerns about continued China buying of U.S. beans. President Donald Trump and Chinese leader Xi Jinping are scheduled to meet in Washington, D.C. in September.
Let me know what you think. I enjoy hearing from my valued Barchart readers all around the globe. Email me at jim@jimwyckoff.com.
On the date of publication, Jim Wyckoff did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
