Wheat Futures Higher on Risk of Kerch Strait Closure — Daily Grain Highlights

By Kirk Maltais

-Wheat for September delivery rose 3.2% at $6.39 1/4 a bushel on the Chicago Board of Trade on Friday, with traders eyeing the potential for Russia to close key shipping lanes in response to Ukrainian drone strikes.

-Corn for December delivery rose 1.8% to $4.60 1/4 a bushel.

-Soybeans for November delivery rose 0.7% to $11.89 1/4 a bushel.

HIGHLIGHTS

Lowest Since 1970: The USDA moved its latest wheat-production forecast lower Friday, projecting the smallest amount of wheat grown in the U.S. in over 50 years. In its monthly WASDE report, the USDA said that projected U.S. wheat output for 2026 is 1.536 billion bushels, down 7 million bushels from what the agency forecasted in June. If this estimate holds true by the end of the year, then it is the lowest for U.S. wheat production since 1970. Overall, the market took the results of the report as anywhere from "neutral" to "slightly friendly" for the U.S. agricultural market. "Weather will be the market's concern next week as this report did not have a deviation significant enough to be a major market factor," said the Hightower Report in a note following the WASDE's release.

Battling at the Strait: A rumored closure of a major canal in Russia supported CBOT wheat futures higher Friday. "The talk is that the Russians will close the Azov-Don canal and the Kerch Strait after Ukraine attacked several oil tankers in the Azov Sea this week, with an announcement by the Russians expected tonight," said Charlie Sernatinger of Marex. "The talk is that some 20 million tons of Russian wheat exports would be bottled up by the move."

Nuggets of Hope: The WASDE didn't contain much in the way of surprises, but did show upticks in the amount of U.S. corn and soybean exports expected for this year. The USDA lifted its estimate for corn export sales by 50 million bushels to 3.2 billion bushels in the 2026/27 marketing year, and increased its soybean export sales projection by 30 million bushels to 1.66 billion bushels. This is a positive sign for those grains for this marketing year, and may support prices going forward.

INSIGHT

Controlling the Narrative: With the WASDE report widely viewed as neutral for the market, trader attention shifts back to developments in the Russia/Ukraine war. "The main story ... remains putting some risk premium into the wheat market ahead of the weekend due to the Kerch Strait closure," said Arlan Suderman of StoneX in a note. The potential closure of key exporting infrastructure comes after elevated Ukrainian strikes hit Russian energy sites. The risk of Russian counterattacks disrupting Ukrainian wheat supplies is also a concern for traders.

Line Items: China may have removed some of the barriers to agricultural trade between itself and the U.S., but the U.S. remains at a disadvantage on its soybean prices when competing with Brazil. "South American soybeans remain 50 to 60 cents below comparable U.S. pricing," said Jim Wiesemeyer of Ag Bull in a note. "Tariff relief, in other words, is necessary but not sufficient to unlock the 25 million metric tons of annual purchases China has promised through 2028." Wiesemeyer added that the average cost for Brazil to produce a bushel of soybeans is roughly $1.20 per bushel below the U.S. average, which gives it the edge in competition versus domestic supplies here.

AHEAD

-The USDA will release its weekly Grain Export Inspections report at 11 a.m. ET Monday.

-The USDA will release its weekly Crop Progress report at 4 p.m. ET Monday.

-Conagra Brands will release its fiscal 4Q and full year 2026 earnings before the stock market opens on Wednesday.

-The EIA will release its Weekly Petroleum Status Update report at 10:30 a.m. ET Wednesday.

Write to Kirk Maltais at kirk.maltais@wsj.com

(END) Dow Jones Newswires

July 10, 2026 15:20 ET (19:20 GMT)