Russian wheat supply keeps pressure on grain market

Oil rose quite a bit yesterday after Trump’s remarks about Iran. Rapeseed and soybean oil followed that movement somewhat. In the grain market, however, traders paid no attention to developments in the energy market. Russia meanwhile has its own oil crisis that is likely not passing unnoticed by agriculture there. The weather remains another market mover on the grain market. Here it is warm and dry. In Ukraine, growers are instead worried about rain that is forecast for the country. The September wheat contract on the Matif closed yesterday €0.25 lower at €204.50 per tonne. On the CBoT, the September contract gave up a bit more and closed 10¾ cents lower at $6.07¾ per bushel. Corn fell 8¾ cents to $4.35 per bushel. Soybeans moved more sideways than the grains on the Chicago exchange, down ½ cent to $11.93¼ per bushel. U.S. President Donald Trump once again made strong statements about Iran yesterday. In Trump’s view, the ceasefire between the U.S. and Iran is over. Iran has attacked ships trying to pass through the Strait of Hormuz, and in response the U.S. carried out attacks on Iran. I don’t want to do business with them anymore, they are scum, Trump said about Iran at a press event at the NATO summit in Turkey. The oil market reacted quite strongly to Trump’s statements. Brent oil closed 5% higher yesterday at $78 per barrel. Rapeseed on the Paris exchange and soybean oil on the Chicago exchange were on the rise, but the grains and especially those on the CBoT did not react to developments in the energy market. Supply from Russia Pressure on the grain market is partly due to wheat supplies from Russia. SovEcon raised its export forecast for new-crop wheat from Russia by 200,000 tonnes to 46.5 million tonnes for the coming season. The fact that SovEcon lowered old-crop exports by 500,000 tonnes to 46.2 million tonnes made less of an impression on the market. Russian rail transporter Rusagrotrans reports that so far in season 2025/26 the company has exported 14% more grain compared with the same period a year earlier. Russia announced yesterday an export ban on diesel until at least the end of this month. The Russian oil industry is the target of targeted attacks by Ukraine, and not without success, we can cautiously conclude. Earlier this week the largest refinery in Russia was hit and nine tankers of the shadow fleet were hit. The Russian export ban on diesel comes at one of the worst possible moments. The war with Iran has already led to a significant decline in inventories to absorb disrupted supply from the Middle East, making diesel stocks in key markets scarce, said Abhishek Kumar, analyst at Sparta Commodities, to Reuters. He added that Russia and its buyers will now compete fiercely with Europe for diesel imports from other suppliers. The fuel shortage will probably also affect Russian agriculture. What the impact will be exactly is still difficult to estimate according to analysts. Price falls in Ukraine In Ukraine, the export price for wheat fell to the lowest level in a year according to some sources. Exports are moving at a slow pace while supplies of new-crop wheat are coming onto the market. Some grower groups do have concerns about the rain forecast for Ukraine in the coming days. That will temporarily stop the harvest and, more importantly, it is not beneficial for the quality of the wheat. In our part of Europe, there is at least no meaningful rain expected until mid next week. For now, warm and dry weather will continue. It does not really create sentiment on the grain market, but it does provide a certain floor to the market. If yields turn out to be more disappointing than previously expected, sentiment on the grain market could shift somewhat according to some analysts.