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Happy Friday,
Second consecutive full-green week — and this time not just one driver. Iran flared up (WTI back above $80 for the first time in 30 days), Ukraine attacked Russian refineries pushing Russia from diesel exporter to potential importer, and Black Sea Ukrainian port infrastructure got hit — a direct shock to world wheat shipments. Layer in a monster June NOPA crush at 214M bushels and it’s wheat +45–56¢, energy up nearly $10, and full green across the board.
How the Week Closed
| Commodity |
Weekly Change |
| Corn (December) |
+6.5¢/bu |
| Soybeans (November) |
+12.25¢/bu |
| Canola (November) |
+$6.50/MT |
| Spring Wheat (December) |
+43.5¢/bu |
| HRW (KC) Wheat (Sept) |
+56.5¢/bu |
| SRW Wheat (Sept) |
+45.25¢/bu |
| Crude Oil (WTI) |
+$10/bbl (over $80) |
| Heating Oil (ULSD) |
+38¢/gal |
Second consecutive full-green week. Wheat carrying the biggest moves — this is stacking on top of last week’s WASDE-driven rally.
Canola November approaching $800 again as bean oil and meal firm up crush margins.
What Drove Markets This Week
Iran escalation. Tensions ramped again around the Strait of Hormuz. WTI crossed $80/bbl for the first time in 30 days, and the war premium is back in energy and oil seeds.
Ukraine-Russia escalation was arguably the bigger story. Ukraine attacked Russian refineries — and Russia, normally a major diesel exporter, is now curbing exports and reportedly importing to fill a domestic supply shortage. That’s a real S&D shock: subtracting supply and adding demand in one move. ULSD +38¢/gal reflects it.
Black Sea port attacks. Ukrainian export infrastructure got hit — direct impact on world grain (particularly wheat) shipments. That’s the reason wheat led the complex higher.
June NOPA crush at 214M bushels vs. trade expectations of just over 200M — plus a reduction in bean oil stocks. Renewable diesel margins have exploded in the last week or two, and crush is running at max. That kept oil seeds bid alongside the geopolitical premium.
Fund Positioning (CFTC as of July 14)
Fully bullish week — every commodity moved in the bullish direction. Corn flipped back to net long, canola length more than tripled, and wheat shorts got covered aggressively:
| Commodity |
This Week |
Last Week |
W/W Change |
| Corn |
+11.5K |
-15K |
+26.5K |
| Soybeans |
+75.2K |
+69.5K |
+5.6K |
| Bean Oil |
+108K |
+85K |
+23K |
| Meal |
+46.5K |
+18.7K |
+28K |
| SRW Wheat |
-35K |
-60K |
+25.5K |
| HRW Wheat |
+14K |
+8.7K |
+5K |
| HRS Wheat |
-5.7K |
-7.5K |
+1.8K |
| Canola |
+38.6K |
+12K |
+27K |
Positions in thousands of contracts, net managed money. Positive change = bullish shift. Cutoff Tuesday, July 14.
Canola addition of ~27K is a huge shift for that market — nearly a full flip from the reductions we saw a few weeks back.
Export & Demand Update
U.S. Inspections & Sales
| • | Corn: Inspections 1.539M MT (vs. 1.734M). Sales 395K, netted to 315K — expected as we’re in the last weeks of the crop year. New crop 11K. Commitments now 1.82M MT above USDA’s projection. |
| • | Soybeans: Inspections 418K MT (vs. 542K). Current-crop sales 223K, netted to 188K. See callout below on new crop. |
| • | Soybean meal: 279K gross, netted to 177K. New crop 57K. |
| • | Wheat: Inspections 373K MT (up from 146K). New crop sales 252K, netted to 235K. |
| • | Ethanol production: 1.040M barrels/day (vs. 1.093M). Margins still holding as energy caught a big bid. |
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Soybean New-Crop Sales: 1.809M MT
Massive new-crop print — the biggest since the Trump-Xi commitment weeks and confirmation that Chinese demand is showing up in real sales, not just headlines. Explains why beans finished +12.25¢ even after last week’s +43¢ run.
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Canadian Exports & Domestic Use
| • | Canola exports: 305K MT — big jump from last week’s 53K. Domestic disappearance also big at 292K MT. |
| • | Wheat exports: 447K MT. Domestic use 106K MT. |
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Renewable Diesel Margins Have Exploded
Canola board (Nov): $366/MT — holding strong even with CAD firming. Soybean crush: $3.12/bu (Aug), $3.09/bu (Sept) — a $0.30/bu jump on the week. Ethanol: high 60¢/gal. The RD margin surge over the past 1–2 weeks is doing the heavy lifting for the whole oil seed complex.
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The Wheat Setup: Structural Bullish Case Building
Wheat had another huge week (+45¢ to +56¢ across contracts) — and it’s stacking on top of last week’s WASDE-driven rally. The setup going forward has multiple concurrent bullish inputs:
| • | Lowest US wheat carryout in ~50 years (per last week’s WASDE). |
| • | Lower Canadian wheat production & carryout (StatsCan cut to 34M tonnes). |
| • | Lower expected Aussie wheat production. |
| • | Black Sea port infrastructure hit this week — direct shock to global wheat shipments. |
| • | EU yield/production losses from record heat (France especially). |
Watch for basis appreciation in North America. Futures have run hard; basis starting to follow would confirm the fundamental setup is real, not just fund positioning. If basis moves, futures likely have room to keep firing.
U.S. Crop Conditions
| • | Winter wheat harvest: 67% (in line with 5-yr avg 68%, last year 68%). Pace normalized. |
| • | Spring wheat headed: 72% (matching 5-yr avg, below last year 76%). Conditions 58% G/E, up 1 point in G/E — but poor category also up 3%. Bipolar move. |
| • | Corn: 34% silking (vs. 30% 5-yr avg, 32% last year). Conditions 68% G/E vs. last year 74%. 1% shift from fair to good and good to excellent — quality improving. |
| • | Soybeans: 50% blooming (vs. 44% 5-yr avg, 45% last year). Pod-setting 19% vs. 13% avg — well ahead. Conditions 65% G/E vs. 70% last year. 1% quality improvement. |
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Above-Normal Temps Ahead in the Midwest
Corn is at 34% silking — entering the critical pollination window. Overnight lows in the low-to-mid 70s F failing to give plants relief. Western Corn Belt looks warmer/drier; Eastern Corn Belt gets favorable rains and cooler temps. Watch for a step-back in conditions in next week’s report, particularly in the western states.
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Canadian Crops & Forest-Fire Smoke
| • | Saskatchewan: Canola 76.5% G/E (down from 79% two weeks ago). Spring wheat 85% G/E (unchanged). Moisture 80% adequate, 17% surplus — surplus dropped 2% from evaporation. |
| • | Alberta: Spring wheat 69% G/E (slight bump). Canola 56% G/E (unchanged). All major crops 64.1% G/E vs. 64.2% last week — deterioration slowed. |
Western Canada also facing high temps with high humidity from a Northern Ridge. Interesting angle: forest-fire smoke from Manitoba and Northwest Ontario is blanketing skies, and in prior years that smoke cover has actually helped protect yields by moderating direct sun/heat stress.
The catch this year: the smoke is drifting east, so Western Canada may not get much of that protective effect — but Ontario producers could see some benefit. Worth thinking about if you’re farming in Ontario and expecting a heat hit.
Canola Watch: Bid on Crush, Not (Yet) Weather
Canola +$6.50/MT on the week, approaching the $800/MT level on the Nov contract. The bid this week came from crush margin strength (bean oil, meal, renewable diesel demand) rather than weather — Alberta conditions are unchanged and Sask deteriorated modestly.
Funds added ~27K to net length this week — a huge shift for canola’s market size. If the July heat over Western Canada actually starts damaging the crop, or if the Aussie situation deteriorates, there’s momentum here. Canada also had a big export week at 305K MT after the previous week’s dismal 53K.
What to Watch Ahead
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Weather — July Makes the Crop
US corn is at 34% silking with above-normal temps and warm overnights forecast. Canola gets made in August — but July heat sets up the plant. Western Corn Belt and Western Canada are the two areas to watch.
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Black Sea Escalation Aftermath
Port infrastructure hits directly affect world grain shipments. Watch for Russian response to the refinery attacks — further escalation flows to both energy and wheat.
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North American Basis
Futures have led hard. If basis starts to appreciate, that’s confirmation the fundamental setup is real — and typically a signal futures have more room. Worth watching on both wheat and canola.
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Iran & Energy
WTI back above $80 and Russian diesel supply flipping is a big S&D shift. Renewable diesel margins are riding it. Any further escalation compounds; any de-escalation reverses fast.
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Bottom line: Two consecutive full-green weeks with geopolitical shocks stacking on top of tight fundamentals. Wheat setup is structurally bullish; corn stocks sub-2B into pollination; canola crush is building on RD margins. Watch for basis to confirm the futures move. Preserve profit and protect when you can. No one ever went broke making money.
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Have a great week and reach out with any questions.
Stephen
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