Weather:

A cold front moved through the US Midwest bringing beneficial rainfall to immature summer crops still finishing under stress. Temperatures across the southeastern Plains remained scorching, continuing to weigh on immature crops, pastures and livestock.
Heavy rains over the weekend across the Canadian Prairies raised localised flooding concerns and the risk of harvest delays in canola-growing regions.
India’s cumulative monsoon rainfall stood 14 percent below normal as of September 7, a lag that continues to build through the season.

Markets
Chicago, Kansas City and Minneapolis wheat rallied on continued Black Sea shipping disruption and the lack of a diplomatic breakthrough between Russia and Ukraine.
Corn eased into Friday’s WASDE while soybeans firmed modestly on soyoil strength despite meal liquidation tied to record long positioning.
Canola and palm oil both advanced on spillover from a sharply higher crude complex, with canola getting additional support from Prairie rain and harvest-delay risk.
Crude surged and equities fell as the US-Iran conflict intensified with tanker strikes and a Houthi attack on Saudi Arabia, while Canada’s new retaliatory tariffs added fresh pressure on US agricultural input costs.

Day Ahead – Australia

Offshore higher – local markets largely unchanged is my pick. These are the most interesting days – US futures rally on Russia/Ukraine conflict. In that situation, Aussie values should firm given we are adding confidence to export parity vs the days were its a US-centric rally.

Question – have you seen any footage of oil spewing out of a damaged tanker…. no?….. why not?

Canola fundamentals are getting more supportive by the day – the interesting issue will be competition for the supply chain into 2027. Basis today, there will be competition for elevation so, despite there being great export margins, maybe converging this will be challenging.

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Wheat: Chicago, Kansas City and Minneapolis wheat all rallied Tuesday as the weekend diplomatic push in Moscow and Kyiv failed to produce a breakthrough. Witkoff and Kushner left the region with talks described as constructive but inconclusive, and strikes resumed within hours of their departure — Russia hit Kyiv with drones and missiles overnight while Ukraine struck refineries in Ryazan, Perm and Tatarstan. A Trump-Putin call floated closer US-Russia economic alignment as an incentive to de-escalate, but both sides reportedly expect the conflict to run into 2027.
Zelensky’s offer to put grain shipping protections on the table for further talks later this month drew a sharp rebuke from Lavrov, who called the proposal unworkable to monitor — a signal Moscow has no near-term intention of easing pressure on Black Sea and Azov shipping lanes.
That backdrop is showing up in trade flows: Rusagrotrans now sees Russian wheat exports falling to 1.6-2.0 million tonnes (Mt) in September versus 4.9Mt a year ago as elevated freight costs and the floating export duty push cargoes onto costlier, less economic routes.
Saudi Arabia’s cancellation of its 535,000-tonne tender reflected a similar dynamic in reverse — Riyadh had hoped a ceasefire would pull prices lower and is likely to return to the market shortly.
Kazakhstan moved to tighten its import restrictions to funnel purchases through a single state buyer, while Latvia’s proposed 300pc tariff on Russian and Belarusian grain threatens to close off a transit route that has absorbed volume diverted from the paralysed Black Sea and Azov corridors.
On the ground, Ukraine’s wheat harvest is essentially finished at 98pc of sown area for a 24.91Mt crop, and weekly grain exports jumped 80pc week-on-week to 433,700t as shippers work around the port disruption — still a fraction of the roughly 760,000t a week moved before the July blockade began.
Friday’s WASDE looms as the next catalyst, with the market broadly skeptical the report delivers the lower yield numbers some private estimates are now flagging.

Other grains/oilseeds: Corn gave back an overnight advance tied to the wheat and bean complex, settling lower as traders positioned into Friday’s WASDE. FC Stone trimmed its corn yield estimate to 182.9 bushels from 184.8, though that still sits above the 178.1 average trade guess for Friday’s number — a gap the market treats warily given the September report’s history of rarely undershooting trade expectations by that margin.
Export inspections of 1.66Mt beat both last week’s and last year’s pace, a firm start to the new marketing year.
Soybeans firmed modestly, supported by soyoil strength even as record long meal positioning triggered some liquidation that pressured meal and compressed October crush.
Yield anxiety is the dominant theme heading into Friday, with the hot, dry finish across the Midwest still working through the crop before cooler, wetter conditions arrive; FC Stone held its bean yield at 53 bushels against the USDA’s August 52.7, while the trade guess for Friday sits lower again at 52.4.
Export inspections at 422,000t were in line but down sharply year-on-year to open the marketing year, and Brazilian farmers have begun planting the 2026/27 soybean crop in Parana, tracking slightly ahead of last year’s pace.
China’s August soybean imports eased from a year ago but rose from July, with processors there facing a tightening fourth-quarter supply picture as Brazilian old-crop stocks draw down and the 10pc tariff keeps US cargoes largely sidelined pending any easing tied to Xi’s Washington visit.
Canola pushed toward contract highs, drawing support from the crude-driven vegetable oil complex and from heavy Prairie rainfall over the weekend that raised concerns about localised flooding and harvest delays; StatsCan’s ending stocks estimate for 2025-26 is due Wednesday ahead of new-crop production numbers the following week.
Palm oil extended a third straight session of gains on firmer biofuel demand tied to the crude rally, with Indonesian forest fires on Borneo and Sumatra adding a supply-side threat to harvest and processing operations.
Cotton was little changed on the day but remains under pressure on the week.

Macro: Crude extended its advance as the US-Iran conflict escalated further, with Central Command reporting the destruction of five Iranian tankers after two attempts to strike a US Navy vessel, on top of three tankers destroyed over the weekend.
Brent pushed toward the $100 mark on reports of explosions near Iran’s Kharg Island export hub, while Iran’s parallel negotiations with Oman over managing Strait of Hormuz shipping added a further layer of uncertainty to flows through the waterway.
A separate escalation saw Houthi forces strike four Saudi cities, wounding more than 70 people and setting oil infrastructure alight.
Equities sold off on the combination of Middle East risk and the start of Canada’s retaliatory tariffs on US goods — a package covering roughly $20 billion of trade including farm equipment, which adds further cost pressure onto an already stretched US agricultural input base.
AUDUSD held little changed on the day despite the broader risk-off tone.

Local: Canola bids were stronger yesterday, up A$5/t to $825, while wheat was steady at $354 and barley $297 track Geelong.
In the west, canola was bid $880, wheat $382 and barley $327 FIS Albany.
Logistics will be tested this harvest. With a large crop looming across SA and Victoria, growers will need every bit of storage and freight capacity available. Consumers know it too and will be looking to pick up cheap grain through harvest, particularly barley if China fails to return in a meaningful way.
Pulses are a mixed bag heading into harvest. Faba beans remain relatively well supported, with poor European production and expected Egyptian demand helping underpin values despite a larger Lithuanian crop. Lentils remain the heavier story, with Australia heading towards a second consecutive record crop of around 2.3Mt.