Grain Markets and Other Stuff

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🌽 Grain futures extended losses Wednesday, with Dec26 corn falling ~7 cents to $4.60/bu and Nov26 soybeans declining ~11 cents to $11.67/bu — both hitting multi-month lows. Wheat also sold off sharply, with Chicago July26 dropping ~16 cents to $5.87/bu as favorable Corn Belt growing conditions weighed on the complex.

🫘 Deputy Ag Secretary Stephen Vaden expressed confidence that China will follow through on its commitment to purchase 25mmt of US soybeans annually for three years. However, China has officially purchased zero bushels of US soybeans for 26/27 delivery so far.

📈 Treasury Secretary Scott Bessent called the recent rise in inflation transitory, attributing it to higher energy prices tied to the Iran war. April CPI came in at 3.8% — the highest since 2023 — while most economists expect the federal deficit to widen above 6% this year.

⛽ The Iran war has driven diesel prices to nearly double last year's levels in some regions, compounding elevated fertilizer and chemical costs for farmers. Rabobank estimates food prices could rise 4–6% over the next 12–18 months as input costs work their way through the supply chain.

🏭 US ethanol production hit a seasonal high last week at 1.1 million barrels per day, up 4.9% vs. the same week last year. Ethanol margins across the Corn Belt remain positive at 20–55 cents based on spot prices of corn, DDGs, and other inputs.

🐄 The USDA confirmed a New World screwworm case in a calf near La Pryor, Texas — the first detection in the US cattle herd. The USDA has implemented quarantines and a 12-mile surveillance zone, though questions remain about containment capacity heading into summer.

🚢 USDA reported a flash sale of 136,000mt (5 million bushels) of corn sold to South Korea for 2026/27 delivery. The sale offers a modest bright spot amid an otherwise bearish week for grain markets.

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Corn futures fell for a third straight session with the Dec26 contract settling near $4.67/bu—its lowest since late February—pressured by favorable Corn Belt weather and no Chinese buying since the mid-May summit. 🌽📉 Soybeans lost 11 cents to close near $11.78/bu and wheat followed lower, with Chicago July settling at $6.03 and KC July at $6.35. 🌾

The White House is cutting tariffs on imported farm and construction equipment from 25% to 15%, effective June 8 through end of 2027, with a possible 10% rate for equipment using 85%+ US steel or aluminum. 🚜 Separately, the administration is proposing at least 10% tariffs on imports from 60 countries over forced labor concerns, largely replacing the current 10% global tariff expiring July 24th. 🌍
US farmer sentiment slipped for the second straight month, with the 

Purdue/CME Ag Economy Barometer falling to 119 in May—well below last year's high of 158. 😟 A record 51% of producers cited high input costs as their top concern, and only 37% expect good times over the next five years. 💸

China issued lodging warnings for its wheat crop as harvest begins, mobilizing thousands of combines to limit losses. 🇨🇳🌾 The main worry is reduced milling-quality wheat, which could nudge the world's top wheat producer toward increased imports. ⚠️

CHS is closing or selling three grain elevators in southern Minnesota as farmers increasingly deliver directly to processors and river terminals. 🏗️ Expanded on-farm storage and more competitive pricing at larger facilities are accelerating the shift away from local elevators. 📦

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🌽 Initial US crop conditions came in below last year's ratings and analyst expectations across corn, soybeans, and wheat. Winter wheat hit its lowest good-to-excellent rating since records began in 1986.

📉 Corn and soybean futures moved lower Monday despite a rally in crude oil, settling near multi-week lows. Weak grain prices were driven by a favorable US Corn Belt weather outlook and ample global supplies.

☀️ A strong El Niño is increasingly likely to develop by late July, with an 82% probability of formation according to the US Climate Prediction Center. Historically, strong El Niño years have been associated with record or near-record corn and soybean yields.

🛢️ Middle East tensions escalated after Iran suspended peace talks with the US, sending WTI crude surging 5.5% to just above $92 per barrel. Israeli PM Netanyahu signaled military operations in southern Lebanon would continue despite calls for a ceasefire.

🚢 US corn export inspections came in strong at 1.7 million metric tons last week, up over 5% from the same week last year. Soybean shipments were near the lower end of expectations but jumped 64% year-over-year, with China accounting for roughly 42% of inspections.

🥛 A whey protein shortage is emerging as food companies aggressively add protein to a wide range of products, pushing prices up 30–40% in recent months. Because whey is a byproduct of cheese production, supply can't easily expand, forcing manufacturers to explore alternatives like soy and pea protein.

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🕊️ President Trump says he's in no rush on an Iran deal but warned military action remains on the table if negotiations fail. A tentative 60-day ceasefire extension was agreed upon, though Trump reportedly sent back a revised framework with tougher terms.

⛽ Oil prices tumbled more than 9% last week on deal optimism, hitting a six-week low, while the national average for regular unleaded gasoline remained elevated at $4.34 per gallon. WTI crude posted its steepest weekly decline since mid-April.

🌽 Corn futures fell roughly 7 cents Friday, with the Dec26 contract settling at $4.75—its lowest since mid-April—pressured by weak crude oil and favorable Corn Belt growing conditions. Soybeans edged lower while wheat took a sharp hit on ample global supplies despite ongoing Plains drought damage.

🌧️ Weekend rains hit the western Corn Belt, Plains, and Southeast, but the central Corn Belt saw little to no moisture. The 7-day forecast calls for widespread Plains rainfall and decent coverage in the western and central Corn Belt, though the eastern Corn Belt may stay dry for another week.

📦 Weekly corn export sales came in at 40 million bushels, down 52% from the prior week, while soybean sales totaled 11 million bushels and wheat posted a marketing year low. Notably, China has yet to book any new-crop US soybean purchases.

📊 Money managers were heavy sellers last week, offloading 82k corn contracts, 14k soybean contracts, and 13k SRW wheat contracts. Since early May, funds have shed a total of 133k corn contracts.

🐛 A New World screwworm case was detected just 31 miles from the US border in a sheep, marking the closest confirmed detection yet. If the parasite enters the US cattle supply, it could further tighten already historically low herd numbers and push beef prices even higher.

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🌧️☔ Excessive rainfall across major agricultural regions in China is raising concerns about potential crop damage, with heavy precipitation expected to persist through the end of May and into early June. Prolonged wet conditions have delayed wheat development, flattened fields, and are creating favorable conditions for pests and disease. 🌾📉

🤫🌽 Unconfirmed rumors suggest China may reduce tariffs on grain imports, potentially increasing the likelihood of US purchases. A White House fact sheet from May 17th indicated China could buy $17 billion in US non-soybean ag products annually, and Bloomberg previously reported discussions around possible corn purchases. 💵🤝

📈🫘 Soybean futures rallied Thursday, with the Nov26 contract gaining nearly 13 cents to settle at $11.94/bu, while the Dec26 corn contract rose roughly 5 cents to settle near $4.82/bu. Wheat futures were narrowly mixed, as traders appear to have largely priced in poor US winter wheat conditions and are shifting focus toward ample global supplies. 🌍⚖️

🕊️💣 The US and Iran have reached a preliminary agreement to extend their ceasefire by 60 days, though President Trump has yet to approve the deal. Key US demands include reopening the Strait of Hormuz and a halt to Iran's nuclear program, while Iran seeks sanctions relief and access to frozen assets. 🛢️📜

🛢️📊 Crude oil prices edged higher early Thursday following overnight clashes but faded during the session, with WTI rising just 0.3% to around $89/barrel. Ongoing military exchanges between the US and Iran continue to highlight the fragility of the ceasefire. ⚔️😬

🌵🗺️ The USDA's weekly drought monitor showed improvements in Kentucky, southern Ohio, and southern Indiana following heavy Ohio Valley rainfall, while conditions worsened across northern Indiana, Illinois, Wisconsin, Minnesota, and northern Iowa. Severe drought continues to grip much of the High Plains, with roughly 90% of Nebraska experiencing some level of drought. 🌾😰

⛽📉 US ethanol production dipped last week but remained at a seasonal high, with weekly output at 1.09 million barrels per day — up 5.1% vs. the same week last year. Ethanol stocks climbed to 24.97 million barrels, and margins across the Corn Belt remain robust at 10 to 45 cents positive. 💪🌽