Market Report 4th August 2026

Headlines
Ukraine is stepping up air attacks on Russia, with nearly 20 regions reportedly targeted overnight. Meanwhile, a former top military commander says it is "impossible" for Ukraine to join NATO.

BP's $5.7bn profit highest since 2022 as Iran war pushes up oil price.

Twenty five states sued President Donald Trump's administration on Monday over a wave of tariffs against dozens of countries.

Iran negotiations slow with president trump ‘Iran trying to play hardball with no cards’.

Daily Market Update

Wheat
A strong recovery after Friday's false-peace-signal sell-off. London November 2026 gained £2.25 to £198.75 on a £7.75 intraday trading range, and Paris/Matif December added 5.50 euros to €232.25. Markets correctly identified that Friday's optimism about Black Sea export route reopening was premature — tensions remain as palpable as ever and Russian attacks on Ukrainian Black Sea ports have if anything intensified. Oil fell below $80/barrel on Iran optimism but grain markets absorbed that bearish signal and closed higher regardless — a sign of genuine underlying strength when a market rises against a headwind of lower energy prices.

Only 6 vessels per day are reportedly passing through the Strait of Hormuz against a pre-conflict normal of 100-135. Trump described Iran as "trying to play hardball with no cards" — not the language of imminent resolution. The situation in the Black Sea is equally unresolved with Russia increasing attacks on Ukrainian ports and Ukraine retaliating with drone strikes. Reports that some Russian banks are running low on cash adds an economic dimension to the pressure on Moscow — but has not translated into any softening of military posture.

Algeria has returned to the market with a milling wheat tender — a significant purchase given Russia, its primary supplier, can no longer guarantee reliable supply. French origin remains unwelcome in Algerian tenders for political reasons, but international supply pressures may yet force greater flexibility. This tender will be closely watched for origin and price signals.

EU Crop Picture — Confirmed Damage
The latest EU crop report confirms what field data has been signalling all season. Total EU grain production is down 8% to 266 million tonnes from 289 million tonnes last season. Wheat down 8% to 133.8 million tonnes — though last year was a record crop providing a high comparison base. Corn at 52.5 million tonnes would be the lowest since 2022/23. These are significant production reductions that the USDA's more optimistic figures have not yet fully captured — the gap between private estimates and official USDA numbers will close in coming months and when it does it will be price positive. Indian monsoon rainfall below average will affect production particularly in oilseeds — a developing story that adds to the global supply tightening picture across multiple commodities simultaneously.

Norfolk & East Anglian Context
With EU wheat production confirmed down 8% and Algeria actively tendering away from its traditional Russian supply, the global market is tightening in ways that support UK grain values. The domestic picture — NFU warning of food shortages, AHDB suggesting yields 15% below expectations nationally — means quality East Anglian grain is in genuine demand. Norfolk harvest results will be closely watched by merchants and end users seeking reliable non-Black Sea supply. Poor outcomes elsewhere in the UK and EU directly increase the commercial value of whatever specification grain comes off East Anglian fields.

Rapeseed
Rebounded from technical support back toward €525/tonne on the November Euronext contract, erasing last week's losses. Structural supply support from EU crop downgrades and sunflower crisis remains intact — the energy-driven correction last week was excessive relative to the fundamental picture.

US Markets
A two-phase session — opening lower on energy market weakness before fundamentals reasserted and all products closed higher. Corn crop ratings fell another 2 points to 61% good/excellent against 73% last year — a deterioration that is accelerating. Soybeans steady at 63%. Spring wheat up 2 points to 55% with 86% of the crop now harvested. Flash soybean sales of 488,000 tonnes to China confirmed — rumours suggest the total pipeline could reach 1 million tonnes — with an additional 136,150 tonnes to an unknown destination. US corn exports remain strong with the USDA report next week potentially raising export estimates further.

Opinion
Grain markets rising against falling oil prices is the clearest signal yet that the fundamental supply story has achieved independence from the energy narrative. For months grain followed oil tick for tick. Monday's session — oil below $80, grains sharply higher — suggests the physical supply reality is now the primary driver rather than the geopolitical premium. That is a more durable foundation for elevated prices.

EU total grain production down 8% to 266 million tonnes. Let that settle. Last season the EU produced 289 million tonnes. The difference — 23 million tonnes — has to come from somewhere. With Black Sea exports severely disrupted and the US running at 1957-low wheat production, the question of where those 23 million tonnes come from does not have a comfortable answer.

Algeria tendering away from Russia is the physical market signal that supply chain diversification is underway at sovereign level. When import-dependent nations start actively sourcing away from their traditional suppliers, the trade flow changes are structural rather than temporary. The diplomatic reluctance to take French wheat may fade quickly when the alternative is empty silos.

Russian banks reportedly running low on cash is a detail that matters for the duration of the conflict. A country under financial pressure makes different military calculations than one with unlimited resources. Not a market mover today — potentially very significant over the coming months.

Corn at 61% good/excellent against 73% last year with the deterioration accelerating. The USDA report next week will need to reduce yield estimates — the 183 bushels per acre forecast looks increasingly optimistic against the crop condition trajectory.