• HEADLINES: Chicago leaks lower on the hope for improved Midwest rain amid liquidation; First notice looms on Monday for soy; GFS midday weather forecast offers scattered showers.

• It has been another volatile Chicago session with values swinging sharply lower following the morning reopening which triggered sell stops below last Friday’s low. The stop loss selling was buffered by end user/commercial demand which rallied prices back to unchanged in the grains. News that Ukraine had attacked Russia near a grain export port helped accelerate the morning rally. Concern is building on an escalation of the war, and the potential that Ukraine will strike back on Russian export capacity for ending the Black Sea Grain Pact. China remains active in cleaning up Brazilian soybeans for August/September and securing US soybeans for October/November. The break enticed additional Chinese demand with their domestic crush margins positive.

• We look for a mixed Chicago close as volume wanes, but resting sell orders above the market are lacking. End user pricing rests below $5.20 Dec corn, $13.75 Nov soybeans and $6.90 in September Chicago wheat. The escalating Russian war against Ukraine makes traders reluctant to sell Chicago price breaks. We would suppoprt buying of breaks with seasonal lows in place for world wheat/corn prices.

• Chicago brokers estimate that funds have sold 1,600 contracts of Chicago wheat, 3,100 contracts of corn, and 4,400 contracts of soybeans. In soy products, funds sold 4,300 contracts of soymeal while buying 1,100 contracts of soyoil.

• Initial Argentine farmer response to the NEW Corn/Dollar sales program has been better than expected with more than 1.2 million mt selling since the Peso offer was made on Monday. The Corn/Dollar program runs through the end of August, and we would raise our expected farm sales to 4-5.0 million mt. Much of the Argentine cash sales are hedged in Chicago, which helps explain the bump in open interest on Thursday.

• India has banned the export of deoiled rice into November according to trade sources. We understand that the Indian ag ministry is having meetings to lower import duties on wheat, following last week’s ban on 10 million mt of non-basmati rice. Domestic wheat/rice prices continued to rise this week and heading into the next presidential election, rising food prices will be a political talking point. Rumours persist that India has purchased 1.5 million mt of Russian wheat in a direct Government purchase, but confirmation from all sides is unavailable.

• The Russian Government is preparing a draft decree to price its ag exports in Roubles rather than dollars to help circumvent western nation sanctions/SWIFT payment system. The shift to Roubles for energy payment is also in the works. Historically, world ag exports are priced in dollars in the international market and converted back to local currencies. Due to the length of the Russian war against Ukraine, the Russian Government wishes to use its own currency as the payment method. Russia continues to offer wheat in $/mt today, but it could shift to Roubles/mt soon. There are no Ukraine fob price offers for corn or wheat/sunoil since the Black Sea corridor pact ended on July 16.

• The midday GFS weather forecast is like the overnight solution with limited Midwest/Delta rain as ridge riding storm systems are not good producers due to the eastward shift of the Bermuda high pressure cell in the Atlantic. There will be areas of severe weather and localised heavy rain this weekend across the North Central Midwest. Highs will range from the 90’s to the lower 100’s through Saturday and then drop to the 80’s to lower 90’s next week. Ridge riding rains will produce afternoon thunderstorms, but the coverage of the rain will be disappointing. This is a below normal Midwest rainfall pattern into August 10. The 11–15-day forecast allows the South-Central US high pressure ridge to progress north and east into the Midwest. Other models are not showing a Midwest ridge and questions abound as to its correctness.

• China continues to be an active soybean buyer in Brazil for September and the US for October/November. The rapidly expanding El Niño looks to delay the start of the rainy season across Northern Brazil with record heat in early August. World crop production is in decline with the harvest slowed in Russia by too much rain. Look for extreme market volatility to persist with the trend of early week rallies to persist on falling crop conditions.

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