Ukraine’s Drone War Reaches Sea of Azov, Choking a Corridor that Carries a Quarter of Russia’s Wheat

Rumored July 10 U.S./China trade talks remain unconfirmed as tariff rollback details hang in the balance

Link: Farming’s Air Force: Drones Go from Novelty to Necessity
         in U.S. Agriculture
Link: Productive but Priced Out: What the U.S./Brazil Yield Gap Really
         Says About Corn Seed Value
Link: Subject Smallest U.S. Wheat Crop Since 1970 Headlines a
         Data-Heavy Day at USDA
Link: Why Tariff Relief Alone Won’t Close the Gap: Brazil’s 50-Cent Edge
         Over U.S. Soybeans
 

Link: Video: In the Ag Squawk PM July 10 video, Davis Michaelson was joined by Jim Wiesemeyer. They break down a market-moving USDA report and zoom out to the next yield milestones, weather risk, and the policy headlines that could steer farm prices for months.
Link: Audio: Ag Squawk PM, July 10

Note: Wiesemeyer’s Perspectives podcast will be available Sunday afternoon, July 12

TOP STORIES
 

— Ukraine’s drone war disrupts a major Russian wheat corridor: Drone strikes forced Russia to suspend traffic through the Kerch Strait and Don-Azov Channel, raising grain-shipping costs and adding a new risk premium to global wheat markets.

— U.S. presses Iran for a public guarantee of unrestricted Hormuz shipping: Washington is demanding assurances that civilian vessels can safely transit the strait, while continued military tensions threaten higher energy, fertilizer and transportation costs for U.S. agriculture.

— Iran sets conditions for renewed U.S. negotiations: Tehran wants its oil exports restored and prior understandings implemented before talks resume, prolonging uncertainty over Hormuz shipping and global energy supplies.

— Rumored U.S./China trade talks remain unconfirmed: Neither government has confirmed that July 10 negotiations occurred, leaving proposed reciprocal tariff reductions on U.S. agricultural goods and Chinese imports unresolved.

— Canada concedes bridge profits to secure Detroit crossing opening: A side agreement sharing early Gordie Howe Bridge profits with the U.S. clears the project to open July 27, expanding capacity along a critical North American trade corridor.
 

FINANCIAL MARKETS
 

— Wall Street ends a choppy week higher as the AI trade strengthens: The Nasdaq and S&P 500 advanced for the week as enthusiasm surrounding artificial intelligence and semiconductor stocks outweighed geopolitical and inflation concerns.

— Fed testimony, inflation data and earnings lead a high-stakes week: Markets will focus on Fed Chair Kevin Warsh, June inflation reports, Middle East oil risks and earnings from major banks, technology and health-care companies.
 

AG MARKETS
 

— Grains surge as USDA trims corn and soybean stocks below expectations: Tighter U.S. and global balance sheets, Chinese soybean buying and Black Sea shipping concerns powered strong weekly gains in corn, soybeans and wheat.
 

ENERGY MARKETS & POLICY
 

— Oil ends the week higher as Iran conflict sustains supply risks: Crude gained roughly 4% for the week as disrupted Hormuz traffic and military tensions outweighed hopes that continued negotiations could prevent a broader conflict.
 

DEFENSE
 

— AI defense startups redefine modern warfare: Munich-based Helsing is using battle-tested autonomous drones and low-cost AI weapons to challenge traditional defense contractors and accelerate military innovation.
 

WEATHER
 

— Severe storms, flash flooding and dangerous heat threaten broad areas: The National Weather Service forecasts repeated storms from the Plains into the east-central U.S., with extreme heat building across northern and western regions.
 

TOP STORIES—Ukraine’s drone war reaches the Sea of Azov, choking a corridor that carries a quarter of Russia’s wheatMoscow halts shipping on the Don-Azov Channel and shuts the Kerch Strait after a week of strikes on vessels and port infrastructure, jolting wheat futures just as the new-crop export season opens A sustained Ukrainian drone campaign against shipping in the Sea of Azov has forced Russia to suspend traffic on one of its most important grain arteries, marking the first time in more than four years of war that Kyiv’s strikes have directly shut down a major channel for Russian wheat exports. Russia’s FSB-controlled Border Guard Service on July 10 stopped accepting vessel applications for passage through the Kerch Strait, the narrow chokepoint linking the Azov and Black seas, and authorities separately halted shipping on the Don-Azov Channel, the waterway that connects the Don River system to the sea. No date was given for when either closure would be lifted. The moves came after Ukrainian naval and aerial drones struck at least 21 vessels in a 72-hour span earlier in the week, most of them tankers tied to Russia’s sanctions-evading “shadow fleet,” and after fires at oil storage facilities at the ports of Taganrog and Azov in Rostov region. The attacks have not stopped: Rostov Governor Yuri Slyusar said drones hit four more vessels in the Gulf of Taganrog overnight into July 11, including a tanker carrying methanol. The grain trade felt it immediately. Euronext wheat futures jumped as much as 4% on July 10 as traders priced in the risk that a corridor handling roughly one-quarter of Russian wheat exports could stay closed into the heart of the shipping season. The timing is the point: the winter wheat harvest is just getting underway across southern Russia, and July is when new-crop supplies from Rostov and Krasnodar — the country’s two premier grain provinces, both fronting the Azov — normally begin flowing to buyers in Turkey, Egypt and the broader Middle East on the shallow-draft coasters that work the Azov’s small river ports. The strategic logic behind the campaign is oil, not grain. Ukraine’s Unmanned Systems Forces have made the shadow fleet and Russia’s refining complex their priority targets, with at least 194 refinery strikes since January 1 — an elevenfold increase from a year earlier — and named tankers such as the Venera-3 and Penelopa hit in the Azov raids. But grain is collateral, and deliberately so in effect if not in stated intent. The same shallow sea that shelters Russia’s tanker traffic from Black Sea patrols is the export outlet for the wheat surplus of the Don basin. When Moscow closes the Kerch Strait to protect its tankers, it bottles up its grain coasters too. Every vessel that cannot clear the strait is a cargo that must either wait, reroute overland to the deepwater Black Sea ports, or stay in the elevator. For world wheat buyers, the practical question is whether this becomes a price event or merely a headline event. The bearish case is well rehearsed: Russia has absorbed drone attacks, insurance scares and port fires throughout the war without a sustained interruption of grain flows, and analysts were quick to note that no major disruption to the trade has yet materialized in four and a half years of conflict. Novorossiysk and the other deepwater Black Sea terminals, which handle the bulk of Russian volume, remain open. And forecasters still peg Russian wheat exports around 45 million metric tons for 2026/27, enough to keep Russia comfortably atop the world export table. The bullish case rests on accumulation rather than any single strike. Russian farmers are already contending with fuel rationing in dozens of regions as refinery attacks bite, rising logistics costs during harvest, and the return of the wheat export duty on July 1. Layer an Azov closure of uncertain duration on top of that, and the marginal cost of moving Russian wheat rises across the board — trucking to Novorossiysk is more expensive than barging to Rostov-on-Don, freight and war-risk insurance premiums for the Azov trade will climb even after any reopening, and shipowners willing to work a sea where drones have hit two dozen vessels in a week will demand to be paid for it. Cheap Russian wheat has been the anchor holding global prices down for three seasons. Anything that raises the cost of getting that wheat to water loosens the anchor.  Bottom line: The wild card is duration and escalation. Analysts note that if the Kerch Strait reopens within days and strikes taper, the futures pop of July 10 will fade the way previous Black Sea scares have. But Ukraine has signaled the tanker campaign is a permanent feature of its strategy, and Russia’s decision to close the strait suggests Moscow believes it cannot reliably defend Azov shipping. A corridor that reopens under drone threat is not the same corridor it was in June — and the world wheat market, which has priced Russian reliability as a constant, may need to start pricing it as a variable. —U.S. presses Iran for public guarantee of unrestricted Hormuz shippingWashington’s demand seeks to restore confidence in a critical oil corridor, but the threat of further military action keeps energy, fertilizer and transportation costs elevated for U.S. agriculture  The United States is demanding that Iran publicly declare every shipping channel through the Strait of Hormuz open to commercial traffic and pledge that civilian vessels will not be attacked. Senior administration officials warned that Tehran could face unspecified consequences if it fails to provide the assurance, even as Washington expects indirect negotiations to continue through Oman. The ultimatum follows several nights of U.S. strikes on Iranian targets and retaliatory attacks on American facilities in the region. President Donald Trump said Friday that he considers the previous ceasefire over, while the administration imposed additional sanctions and revoked a waiver that had allowed Iran to sell oil more broadly on world markets. Iran has denied responsibility for attacks on vessels, with U.S. officials saying Tehran blamed rogue elements within the Islamic Revolutionary Guard Corps. The immediate U.S. objective is to remove ambiguity surrounding navigation through the strait, which is the principal maritime outlet for Persian Gulf oil and liquefied natural gas exports. A formal Iranian guarantee could reduce the geopolitical risk premium built into crude prices, lower marine insurance costs and encourage tanker operators to resume more normal traffic. But words alone may not be sufficient. Shipping companies and insurers will judge conditions by actual vessel movements, the absence of attacks and whether naval forces can keep the corridor secure. The dispute over Hormuz is also tied to broader and more difficult negotiations involving Iran’s nuclear program, frozen Iranian assets and enriched uranium believed to remain at facilities struck by U.S. forces. Washington says no final agreement is possible until Iran turns over that material. That linkage makes a quick settlement less likely and increases the risk that a shipping dispute could become part of a prolonged military and diplomatic confrontation. For U.S. agriculture, the most immediate exposure is through energy prices. Higher crude oil raises the cost of diesel used in planting, harvesting and grain transportation, while increasing freight charges for trucks, railroads, barges and ocean vessels. Even farms far from export terminals would feel the effects through higher machinery operating costs and more expensive delivery of seed, fertilizer, feed and chemicals. Fertilizer markets are another major vulnerability. Natural gas is the primary feedstock for nitrogen production, and the Persian Gulf is an important supplier of nitrogen fertilizers and other crop nutrients. Disrupted Gulf shipping, higher gas prices or increased tanker insurance costs could lift global ammonia and urea prices, eventually feeding into U.S. farm input bills. Potash and phosphate markets could also strengthen indirectly as buyers compete for alternative supplies and freight routes. The consequences for crop prices are more mixed. Higher petroleum prices can support corn and soybean values by improving the economics of ethanol, biodiesel and renewable diesel, particularly if gasoline and diesel prices rise faster than feedstock costs. However, those benefits could be offset by weaker global economic growth, higher interest rates and rising transportation expenses. Livestock producers would receive little direct benefit from stronger energy prices and could instead face higher feed, electricity and hauling costs. U.S. agricultural exports could also confront more expensive ocean freight and greater volatility in container and bulk shipping rates. The Strait of Hormuz is not a major route for U.S. grain exports, but a sustained disruption would absorb tanker capacity, raise bunker-fuel costs and ripple across global freight markets. Import-dependent countries facing larger energy bills could also have less foreign exchange available for purchases of U.S. corn, wheat, soybeans, meat and dairy products. The central question for agriculture is therefore not simply whether Iran issues the statement Washington is demanding, but whether the declaration produces a verifiable and durable reopening. A credible guarantee would likely ease oil and freight markets. Continued attacks, military escalation or restrictions on Iranian petroleum exports would keep the risk premium elevated, adding another layer of uncertainty to already strained U.S. farm margins.—Iran sets preconditions for U.S. Talks as Hormuz standoff deepensTehran demands restored oil exports and implementation of prior understandings before negotiations resume, keeping energy markets and global trade on edge  Iran has rejected resuming direct negotiations with the United States unless Washington first meets several conditions, including ensuring unrestricted transit through the Strait of Hormuz and restoring Iran’s ability to export oil. According to Iran’s semi-official Fars news agency, Tehran insists the U.S. implement previously agreed understandings before any new talks can begin. The demands came just hours after the Trump administration publicly called on Iran to declare that all shipping lanes through the Strait of Hormuz are open and to pledge it will not attack civilian vessels. U.S. officials warned there would be consequences if Tehran refused, underscoring the widening gap between the two sides despite ongoing diplomatic contacts. The dispute follows several days of U.S. airstrikes and Iranian retaliation that effectively ended the fragile mid-June ceasefire, according to President Trump. The administration has also tightened pressure by revoking a waiver that had allowed Iran to continue exporting oil, further raising the stakes in any future negotiations. Despite the tougher rhetoric, both governments have left the door open to expert-level discussions. Iranian Foreign Minister Abbas Araghchi traveled to Oman for talks on the future of the Strait of Hormuz, signaling that back-channel diplomacy remains active even as public positions harden. For global markets, the immediate concern remains energy security. The Strait of Hormuz carries roughly one-fifth of the world’s seaborne oil, making any threat to navigation a key driver of crude oil prices and shipping costs. Continued uncertainty could keep energy markets volatile, raising diesel and fertilizer costs that directly affect U.S. agriculture while increasing transportation expenses throughout the food supply chain. Political tensions also intensified after President Trump warned the U.S. would respond with overwhelming force to any Iranian assassination attempt, while Iran’s newly installed Supreme Leader Mojtaba Khamenei publicly vowed revenge for the killing of his father, former Supreme Leader Ali Khamenei. The increasingly confrontational rhetoric suggests prospects for a broader U.S./Iran agreement remain difficult even if technical negotiations continue.—Rumored July 10 U.S./China trade talks remain unconfirmed as tariff rollback details hang in the balanceNeither Washington nor Beijing has issued a readout or even confirmed a meeting took place, leaving traders to parse a week of speculation about dueling 10% tariff cuts on ag goods and fentanyl-linked imports Speculation ran hot all week that U.S. and Chinese officials would sit down in Beijing on or around July 10 to hammer out details of a tariff rollback covering American agricultural exports. But as of this writing, there is no evidence the meeting happened. Neither the Office of the U.S. Trade Representative nor China’s Ministry of Commerce has published a schedule, a delegation list, or a readout, and USTR’s press office has posted nothing on China since early July — its most recent releases, dated July 1-2, deal with the USMCA joint review and domestic manufacturing, not Beijing. The July 10 date did not come out of thin air. It coincided with the close of USTR’s public comment period on proposed tariff modifications tied to the “Board of Trade” framework that Presidents Trump and Xi Jinping agreed to at their May 14 summit. Trade analysts had long flagged completion of that review as the likely trigger for a coordinated announcement, reasoning that neither side wants to move first on tariff reductions. Adding to the anticipation, China signaled on June 25 that the two countries would discuss “reciprocal tariff reductions,” and a July 1 phone call between officials confirmed agricultural products would be on the table. Bloomberg reported July 2 that the two governments were specifically targeting tariff reductions on farm goods. The substance of the rumored deal is well defined even if the meeting itself is not. Under the framework circulating in trade press reports, China would drop its 10% retaliatory tariff on U.S. agricultural goods — soybeans, corn, wheat and other grains — while the United States would reciprocate by ending its 10% fentanyl-related tariff on Chinese imports. An Oct. 1 effective date has been widely floated, which would put the relief in place just as the U.S. harvest moves to market. None of this has been confirmed by either government. Analysts at Trivium China have cautioned that Beijing is unlikely to move until Washington moves simultaneously on its roughly $30 billion in corresponding reductions, and they put high confidence on that sequencing. Trivium also expects a visible uptick in official engagement — USTR meetings or Board of Trade discussions — just before any cuts are formally announced. By that logic, a genuine Beijing meeting would itself be a strong tell that an announcement is near, which is precisely why the unconfirmed July 10 reports drew so much attention. For now, the next firm date on the calendar is July 27, when rebuttal comments close on the separate USTR public docket. Until one of the two governments issues an official readout, the July 10 talks remain what they were all week: informed speculation. —Canada concedes toll profits to secure Detroit bridge openingSide agreement ends cross-border standoff, underscores Trump’s willingness to reopen long-settled infrastructure deals with implications for North American trade and agricultural freight  Canada and the United States have resolved a weeks-long dispute that delayed the opening of the C$6.4 billion (approximately $4.5 billion) Gordie Howe International Bridge by striking a side agreement that gives the U.S. a share of the bridge’s early operating profits while leaving the original ownership agreement intact. The bridge, now scheduled to open July 27, is one of the most important new pieces of North American trade infrastructure in decades, providing a second major Detroit River crossing alongside the privately owned Ambassador Bridge and strengthening the busiest commercial border gateway between the two countries. The compromise reflects the Trump administration’s increasingly transactional approach to cross-border economic agreements. Rather than reopening the underlying treaty governing the bridge, Canada agreed to direct the equivalent of half of the bridge’s net operating profits into a U.S.-controlled regional economic development fund for 15 years. Canada also agreed to consult Washington on certain toll increases that are not driven by market conditions. President Trump quickly declared the arrangement “a much better deal for America,” while Canadian officials emphasized that the original ownership structure remains unchanged. For agriculture, the bridge matters because roughly one-quarter of all U.S./Canada merchandise trade moves through the Detroit-Windsor corridor. The crossing serves as a critical artery for food products, livestock, meat, grain ingredients, fertilizer, machinery, automotive parts and other just-in-time manufacturing inputs. The additional crossing should reduce congestion, improve supply-chain reliability and provide redundancy during accidents, inspections or weather disruptions that periodically slow traffic across the Ambassador Bridge. The agreement also illustrates how infrastructure has become intertwined with broader trade negotiations. Commerce Secretary Howard Lutnick reportedly delayed the bridge opening to seek improved financial terms, demonstrating that even projects negotiated years earlier are subject to renewed bargaining under the administration’s broader effort to extract additional economic concessions from trading partners. That approach mirrors the administration’s handling of tariffs, market-access negotiations and the evolving annual review process replacing the traditional long-term certainty of the U.S.-Mexico-Canada Agreement. The practical impact on freight costs should be limited in the near term because the side agreement affects the distribution of profits rather than day-to-day bridge operations. However, the new requirement for U.S. concurrence on certain toll adjustments introduces another layer of bilateral oversight that could influence future pricing decisions if governments seek to use tolls as an economic or policy tool. For U.S. agriculture and agribusiness, the immediate takeaway is positive. The bridge opening removes uncertainty surrounding a major trade corridor and expands transportation capacity between two deeply integrated agricultural markets. Over the longer term, however, the episode reinforces that cross-border infrastructure, like trade policy itself, has become another negotiating lever in the broader U.S./Canada economic relationship, increasing the possibility that commercial issues once viewed as settled could be revisited as political priorities evolve.

—U.S. equities Fri., July 10, and weekly change: Wall Street ends choppy week higher as AI trade reasserts itself

Tech-heavy Nasdaq gains 1.7% for the week on blockbuster SK Hynix debut; Dow slips 0.5% as blue chips lag the rally

U.S. equities closed out the week on a positive note Fr., July 10, with all three major indexes advancing. The Dow added 149.60 points, or 0.29%, to finish at 52,637.01. The S&P 500 led the day’s gains, rising 31.75 points, or 0.42%, to 7,575.39, while the Nasdaq climbed 74.72 points, or 0.29%, to 26,281.61.

Friday’s session as expected was dominated by the Nasdaq debut of South Korean chipmaker SK Hynix, the world’s largest producer of the high-bandwidth memory chips that power AI processors. The offering raised $26.5 billion — the largest-ever U.S. listing by a foreign company — and served as a fresh referendum on investor appetite for the artificial intelligence trade. The verdict was clear: demand remains robust, even as some analysts warned the global semiconductor space has become “the most crowded trade in the world.” The successful debut lifted sentiment across the tech complex and helped the market shake off a cautious open.

The weekly scorecard tells the real story of a bifurcated market. The Nasdaq surged 1.74% and the S&P 500 gained 1.23%, while the Dow lost 0.50% — a divergence that underscores the renewed rotation into AI and semiconductor names at the expense of old-economy blue chips.

Rate-sensitive and cyclical stocks struggled against a backdrop of elevated geopolitical risk, as the U.S. and Iran exchanged their heaviest attacks since the ceasefire was signed, keeping crude prices firm (WTI near $72, Brent above $76) and raising concerns about the Strait of Hormuz.

Delta Air Lines exemplified the pressure on the industrial economy, sliding after flagging substantial fuel-cost headwinds despite beating earnings estimates. Small caps also sat out the rally, with the Russell 2000 down about 0.6% on the week.

The takeaway: the market’s leadership remains narrow and decidedly tech-centric. Year to date, the Nasdaq is now up roughly 13.1%, the S&P 500 10.7%, and the Dow 9.5% — and with earnings season ramping up and Middle East tensions simmering, the durability of the AI-driven advance will be the question hanging over the weeks ahead.

—Fed testimony, inflation data and earnings lead a high-stakes week

Markets will weigh Middle East oil risks against June inflation readings, Fed Chair Kevin Warsh’s congressional testimony and a heavy slate of bank and technology earnings 

Investors enter the week of July 13 focused on renewed U.S./Iran hostilities and the risk that further escalation could disrupt global oil supplies and intensify inflation pressures. Federal Reserve Chair Kevin Warsh’s testimony before House and Senate committees on Tuesday and Wednesday will be closely watched for signals on monetary policy, possible Fed reforms and whether higher crude prices could support an interest-rate increase as early as September despite softer labor-market data.

The U.S. economic calendar is led by the June consumer price index, with headline inflation expected to ease from May’s three-year high of 4.2% while core inflation holds near 2.9%. Retail sales, industrial production, producer prices, housing starts, building permits and preliminary July consumer sentiment will provide additional evidence on the strength of demand and the economy’s ability to withstand elevated borrowing costs.

Second-quarter earnings season also begins in force, with JPMorgan, Bank of America, Citigroup, Goldman Sachs and Wells Fargo reporting Tuesday. Results from Netflix, Johnson & Johnson, Morgan Stanley, BlackRock, UnitedHealth and several major industrial and health-care companies will broaden the picture of corporate profitability and consumer conditions.

Outside the U.S., the Bank of Canada is expected to hold interest rates steady, Britain will report May GDP, and China will release second-quarter GDP along with trade, industrial production, retail sales, unemployment, credit and housing data. Together, those reports will offer an important reading on global growth as geopolitical and inflation risks remain elevated.

—Ag markets Fri., July 10, and weekly change: Grains surge as USDA trims corn, soybean stocks below trade expectations

Friday’s Crop Production and WASDE reports deliver tighter-than-expected balance sheets, powering corn, soybeans and wheat to strong weekly gains while cattle pause

Grain and oilseed futures closed out the week with a report-driven flourish on Fri., July 10, as USDA’s Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports painted a tighter supply picture than the trade had penciled in. Corn, soybean and wheat futures all finished near their daily highs, with wheat notching six-week highs and cotton riding the grain rally to a technically bullish weekly high close. Livestock markets were quieter, with cattle pausing after a rough week and hogs posting a modest rebound.

• The headline surprise came in corn. USDA pegged 2026-27 corn ending stocks at 1.790 billion bushels, well below the average pre-report estimate of 1.873 billion bushels and a sizable cut from the June projection. Old-crop 2025-26 ending stocks were lowered 125 million bushels to 2.020 billion, also about 50 million bushels under trade expectations, reflecting stronger-than-anticipated usage revealed in the quarterly stocks data. USDA left the 2026 corn crop at 16.0 billion bushels on a trendline yield of 183 bushels per acre — the second highest on record and essentially in line with the trade’s guess of 15.975 billion bushels. Notably, the bullish tilt came from the demand and stocks side of the ledger rather than production. World corn carryout for 2026-27 came in at 275.3 million metric tons, below the roughly 279 million expected and nearly 24 million metric tons under the prior year, aided by a 3.7-million-ton cut to the heat- and drought-stressed European Union crop. Analysts called the drawdown in world stocks the friendliest element of the corn report.

December corn rose 9 cents to $4.61, near the daily high, and gained 19 1/2 cents for the week. The corn bulls rebounded smartly to restore fresh technical momentum after shaky trading days Wednesday and Thursday.

•The soybean numbers leaned friendly as well. USDA put 2026-27 soybean ending stocks at 310 million bushels, about 20 million below the average trade estimate of 330 million, while old-crop stocks were trimmed 10 million bushels to 330 million — also under expectations. The 2026 crop was estimated at 4.475 billion bushels on a record trendline yield of 53 bushels per acre, slightly above the trade’s 4.459-billion-bushel guess, but the modest production bump was overshadowed by a 30-million-bushel increase in the export forecast to 1.66 billion bushels. World soybean stocks of 124.2 million metric tons also came in about 1 million tons below expectations. Fresh confirmation of Chinese purchases of U.S. soybeans added fundamental fuel to the fire.

November soybeans rose 9 1/4 cents to $11.90 3/4, nearer the daily high, and surged 43 cents on the week. September soybean meal gained $2.80 to $317.20, near mid-range after hitting a five-week high, and finished the week up $14.10. September bean oil rose 44 points to 69.92 cents, nearer the daily high, and climbed 358 points for the week.

• Wheat’s report card was arguably neutral against expectations — all-wheat production of 1.536 billion bushels and 2026-27 ending stocks of 722 million bushels both came in about 10 million bushels above the average trade estimates — but the raw numbers remain historically bullish. The all-wheat crop is the smallest since 1970, with winter wheat production of roughly 990 million bushels down 29% from last year on drought and reduced planted area, and spring wheat at 475 million bushels, down 4%. USDA raised its season-average farm price forecast to $6.00, up 94 cents from 2025-26. The winter wheat markets got a double-barrel bullish boost Friday as escalating tensions between Russia and Ukraine spurred rumblings of shipping disruptions in the Sea of Azov, including reports Russia may close the Don Canal — a move that could strand a sizable tonnage of grain exports.

Wheat prices: September SRW wheat rallied 20 1/2 cents to $6.40 1/4, nearer the daily high and a six-week high, for a weekly gain of 40 1/2 cents. September HRW wheat rose 22 cents to $6.76 1/4, also a six-week high, up 37 3/4 cents on the week. September spring wheat added 22 cents to $6.76 1/4 and notched a 33 3/4-cent weekly gain.

• Cotton was the one row crop where USDA’s numbers ran bearish against expectations — production of 13.70 million bales on an 872-pound yield topped the 13.42-million-bale trade guess, and 2026-27 ending stocks of 4.10 million bales exceeded the expected 3.77 million — yet the market shrugged it off.

December cotton rose 91 points to 81.54 cents, near the daily high, posting a six-week high close and a weekly gain of 442 points on spillover support from the solid gains in grains, including a technically bullish weekly high close.

• Cattle futures took a breather. August live cattle slipped $0.05 to $235.20, finishing nearer the daily high after carving out a 3.5-month low early in the session, and lost $3.90 on the week. August feeders fell $1.55 to $354.60, near mid-range, down $5.775 for the week. Mild technical selling left both markets with bearish weekly low closes that set the stage for possible follow-through chart pressure early next week.

Lean hogs bucked the softer livestock tone. August hogs rose $0.85 to $99.00, nearer the daily high, recovering from Thursday’s pressure to finish the week up 25 cents.

Upshot: With USDA holding corn and soybean yields at lofty trendline levels, the trade’s attention now pivots squarely to summer weather. Current heat and moisture concerns across parts of the Belt mean the 183-bushel corn yield and record 53-bushel soybean yield are far from locked in — and with balance sheets tighter than expected on both old and new crop, the market has less cushion for a weather stumble than it thought a month ago. USDA’s next supply and demand update arrives Aug. 12.

—Oil ends week higher as Iran conflict keeps supply risks elevated

WTI crude settled near $71 a barrel, with disrupted Hormuz traffic and fears of prolonged tensions outweighing hopes for continued U.S./Iran talks

Oil prices slipped Friday but still posted a weekly gain of roughly 4%, with WTI settling near $71 per barrel as the U.S./Iran conflict continued to inject a geopolitical risk premium into global energy markets. Brent crude close at around $76 per barrel. 

Reports that Washington and Tehran plan to continue technical and peace talks offered some reassurance that the renewed military exchanges may remain contained. Even so, uncertainty surrounding the ceasefire and sharply reduced tanker traffic through the Strait of Hormuz are preventing prices from retreating further.

The strait normally handles about 20% of global oil and gas trade, making even partial disruption a significant threat to supply flows, shipping costs and insurance rates. Markets are currently assuming the conflict will not escalate into a prolonged regional war, but that outlook remains vulnerable to additional attacks or further restrictions on commercial shipping.

The International Energy Agency added to the caution, warning that sustained tensions could slow the rebuilding of global oil inventories and upset the supply-demand balance expected later in the year. That leaves crude prices caught between diplomatic hopes and the continuing possibility of meaningful supply interruptions.

—AI defense startups redefine the business of modern warfare

The New York Times reports that Europe’s most valuable artificial intelligence defense start-up, Helsing SE, has become a symbol of a rapidly changing defense industry in which venture-backed technology firms are producing low-cost autonomous weapons at Silicon Valley speed, reshaping military procurement and attracting billions of dollars in investment as governments prepare for an era of AI-driven warfare 

Based in Munich and founded in 2021, Helsing has quickly emerged as one of Europe’s fastest-growing defense companies by developing autonomous drones and unmanned aircraft designed to complement or replace traditional military platforms. The company says its AI-powered HX-2 loitering munitions can be mass-produced for as little as €17,500 (about $20,000) — far below the cost of conventional weapons systems — and require only minimal operator training while remaining operational even when GPS and communications are disrupted by electronic warfare.

The company’s highly secure drone factory in southern Germany reflects the growing strategic importance of defense technology. The undisclosed facility can reportedly be dismantled and relocated within a day to reduce sabotage risks, while many of its employees are former German automotive workers who have shifted into defense manufacturing. Thousands of Helsing drones have already been deployed by Ukrainian forces, giving the company continuous battlefield data to improve software, autonomy and targeting capabilities.

Ukraine has become Helsing’s proving ground. Company executives say the HX-2 has achieved mission success rates of roughly 70% while identifying and striking Russian armored vehicles, artillery and air-defense systems despite heavy electronic jamming. That operational experience has become a key selling point for investors, providing a real-world testing environment that few Western defense firms can match.

Helsing is also expanding beyond drones. The company is developing the unmanned CA-1 Europa combat aircraft, targeted for deployment by 2029, which would fly dangerous strike and electronic warfare missions without risking a pilot. Company officials argue that fleets of lower-cost autonomous aircraft could perform missions traditionally assigned to expensive manned fighters, fundamentally changing air combat economics.

The shift is being reinforced by rising military budgets. The Pentagon’s proposed budget includes roughly $55 billion for unmanned and AI-enabled systems, while the European Union has launched funding programs to accelerate AI defense technologies. President Trump’s calls for Europe to sharply increase defense spending, coupled with Russia’s continued war against Ukraine, have further accelerated venture capital investment. According to reports cited by the Financial Times, Helsing’s latest fundraising could value the company at roughly $18 billion.

Despite intensifying competition among defense technology startups, Helsing recently secured a €220 million (about $257 million) German military contract to develop additional AI systems, while drones produced at its factory are now being supplied not only to Ukraine but also to German forces stationed in Lithuania near the Belarus border. Analysts say the rapid expansion of autonomous weapons reflects expectations that Europe is entering a prolonged period of heightened military competition, with AI-driven systems becoming central to future defense planning.

Bottom line: A major competitive advantage for Helsing is that its systems are continuously battle-tested in Ukraine. Thousands of deployed drones generate operational data that allows engineers to rapidly improve software and autonomous targeting capabilities, creating a feedback loop that traditional defense contractors—whose platforms often take years to develop—struggle to match. The result is a new model of defense innovation where commercial technology companies, backed by venture capital and powered by artificial intelligence, are increasingly setting the pace of military modernization.

— NWS outlook: Repeated threats for strong to severe thunderstorms and flash flooding from the central/southern Plains eastward to the east-central U.S into the weekend… …Dangerous heat is forecast to build over portions of the north-central and western U.S. this weekend while the heat lingers over the Southeast.