The grain market experienced significant shifts following President Trump's declaration that the Iran ceasefire was "over" due to renewed Iranian strikes on Hormuz shipping. This geopolitical development fractured the soy complex from the rest of the grain market. WTI crude surged to a 2½-week high near $74.25, influencing soy oil prices positively due to improved biodiesel economics. However, corn and wheat faced bearish pressures ahead of Friday's USDA supply-and-demand update. Old-crop soybeans and soy oil saw increases, while new-crop soybeans experienced selling pressure.
Soybean prices rallied, with August soybeans reaching $12.01¾, up $0.08, a six-week high, and July crossing above $12.00 to $12.02¼. This upward movement was largely driven by robust Chinese demand, including a USDA flash sale of 472,000 MT of US soybeans to China (136,000 MT for 2025/26 and 336,000 MT for 2026/27), following an earlier purchase by COFCO. This confirmed demand validated a competitive FOB positioning shift for US soybeans. However, the Reuters WASDE survey's expectation of a 20 million bushel increase in 2026/27 new-crop soybean stocks to 330 million capped the new-crop rally.
Energy-related agricultural products saw distinct impacts. Soy oil surged, with August-26 soy oil up 133 points to 69.92, a three-week high, as crude oil's price increase directly benefited biodiesel economics. Corn's ethanol margins recovered modestly, although this was partially offset by below-pace ethanol production reported by the EIA. Wheat, having a more indirect relationship with energy, underperformed. Soybean meal, however, dropped as much as 2.7%, significantly impacted by Iran being a key importer and concerns over expanding US production and rising freight rates.
