US/Iran Tensions and Russian Port Issues Spark Grain Price Volatility

US/Iran tensions and logistical issues at Russian ports drove grain market surges on July 29, but this momentum was short-lived as values declined in the early morning hours. According to Sean Lusk of Walsh Trading, renewed fighting between the US and Iran, along with a joint attack between the US and Saudi Arabia targeting Iranian targets, led to a shift in managed money flow from several markets into the energy complex.

Lusk attributed this shift as contributing to the decline in grain prices, although weather models indicating a wetter pattern shift for the Corn Belt weighed on trade. Wheat movement out of the Black Sea remains minimal with no increase expected due to Russian and Ukrainian port stalling.

The December KC vs December Chicago wheat spread appears overbought, with funds still short on Chicago versus Kansas City. With harvest more than 80% complete, Lusk predicts that Chicago prices may tighten against KC in the coming weeks.