Soybean Oil Commodity Markets, Prices & Futures

Grains Explode on China's $17 Bi of Ag Buys: How High Will Prices Go and Why Livestock Didn't Follow

Mon, 18 May 2026 22:46:22 GMT

Grain and cotton futures were sharply higher Monday, livestock futures lower.

Grains and Cotton Explode on China’s $17 Bi Buys
The grain and cotton markets gapped sharply higher on the open after the White House released a fact sheet on Sunday providing further details of the trade outcome from the China summit including an additional $17 billion of ag purchases from China through 2028, prorated for 2026.

Mike Zuzolo with Global Commodity Analytics says this is above the 25 MMT of soybean purchases China committed to in October of 2025.

“So it looks to me like it’s going to be right around that $30 billion mark. That would get us back to, in terms of total beans and non-beans and ag in general, probably close to 2023 levels in dollar terms,” he describes.

More importantly for Zuzolo and the trade was the Chinese noting that there was going to be an increase in U.S. ag exports by more bilateral trade.

He says, “So I think that was the necessary piece of the puzzle to make the market believe that we were going to see an increase in demand coming out of the summit. Obviously, Friday, they weren’t buying into that mindset. They were, in fact, fearful that we were going to lose demand because nothing specific had been given.”

What Commodities Will China Buy?
There were no specifics on which commodities will be purchased, so what might be on China’s buying list?

Zuzolo says the market may have told the story.

“I’m going to go with what was up the most on Monday because I think there’s probably some of the commercials that probably understand what was on that list or going to be published on that list, I would guess. And so with the corn, July corn up almost 4.5%, July soft red wheat up over 4.2%. This was about the grains. The soybeans you’ve got to give them credit. They hung in there. They kept the whole thing together going into last week’s close and into the weekend trade but I think it was about the grains if you look at the percentage gainers,” he explains.

However, he says cotton, sorghum and other items are also on the plate.

“I think sorghum is on the table, but I get the impression. that the Chinese probably want more corn outright as opposed to sorghum. Maybe they have a little bit better stockpile of sorghum after the last couple of years, maybe not getting as much of the corn from the Middle East and not getting as much, especially from the Black Sea region at this stage,” he adds.

China to Lower Tariffs?
So will China lower the tariffs on ag products, including the 10% tax on soybeans?

China mentioned lower tariffs but President Trump denied even talking about it with Xi during the summit.

“Yeah, this is where it’s going to get a little bit tough to read in between the lines until we get more clarification, because the soybeans, especially going back to South Korea’s agreement, that never has really materialized. We got the original bump in the first, what, 12 million metric tons or so. And that then just kind of fell apart. So I think that’s a yet to be determined situation,” he adds.

How High Will Prices Rally?
So, how high will grain prices need to rally to factor in the China business?

Zuzolo says that may be dependent on what the dollar index does because it started moving higher last week because bond rate yields were going higher. “And the bond yields were going higher because the energy market was going higher. So now all of a sudden with this energy market rallying so long we’ve got it actually a double-edged sword when it comes to the commodity sector as a whole.”

He says the trade is starting to get more nervous about higher interest rates and investment money is starting to move.

Grain markets need to take out the old highs to continue to rally.

“That’s the $6.88 area in the July soft red wheat, $506 1/2 Dec corn, $12.14 November beans. I’d love to see that happen before we go home for the three-day weekend.”

China Soybean Buys Below Normal
The 25 million metric ton soybeans buys for 2026 through 2028 are not any more than China bought in past years and the trade thought there would be additional purchases above those levels.

“No, it’s not a huge victory, but we won’t slip anymore in export demand. And I think that was the biggest caution flag and fear that the trade has is we’ve been living off of that domestic biofuel policy in terms of keeping these prices elevated,” he adds.

Market Will Need to See Purchases
While this is encouraging the market will need to see purchases to continue to rally.

Plus, Zuzolo says investors will also need to see the dollar index stay under wraps. “So, that you can assume that our yields are not going to go higher, keep the investor and keep the export market alive. This is where the Russian ruble being so strong recently should help us
quite a bit as we go forward.”

Grains Also Add War Premium
The grains also added some war premium with crude oil prices continuing to be elevated and he thinks wheat is the most directly impacted by those prices.

Cattle Fail
Cattle futures ended lower on Monday as live cattle failed at resistance when nearing the May highs. This is despite last week’s record cash trade at $262.85 and the tighter numbers and drought which is lowering weights.

“You look at the spreads like the Jun/Dec spread that has gone essentially from zero at the end of February to a positive $15. That tells me that we’ve got a very current market and a very tight supply out there heading into the cattle on feed report,” he explains.

The real problem has been the feeders. Zuzolo says, “It’s the same old story almost every week. We get revved up. We want to go after that old
high around $258 in the fat cattle futures and the feeders give way. And whether it’s because of the same drought and the fear of seeing some yearlings come into the placements or whether it’s the corn market rally and the funds playing that spread, it just seems like the feeders can’t give us that push to keep the funds defending their long position.”

Zuzolo says cattle rallies for the last 25 to 30 years have been led by the feeder market.

He is also getting nervous about funds getting nervous about Wall Street as bond yields go up, as well as due to the border reopening to Mexican cattle or higher beef imports.

China Beef Buyer?
China did relist 425 U.S. beef plants to export to China but Zuzolo isn’t sure the U.S. has the beef to sell to them.

“I really question whether we have the supplies to send them. I was just looking at the the grocery store weekly retail activity and the activity index for the beef was up almost 21 last week and this is at these kind of prices even for hamburger were one of the biggest features out there from what the report discussed, So, if our domestic consumption remains so elevated in part due to this diet change that we have going for us.”

Hogs Unimpressed With China News
The lean hog futures were also lower on Monday seemingly unimpressed with the idea of getting any China export business.

However, Zuzolo is still hoping the summer low is in place, especially as June becomes the lead month.

“I really like the way the monthly chart looks. And I like also the fact that we’re starting to get some traction on the cutout values.”

He admits the market may have been concerned about Mexican import restrictions on U.S. offal, etc. due to pseudorabies.

Still he says China continues to see big hog producers or the government curtailing supplies which should eventually be supportive.

Another Week of Record Cash Cattle? Grains Soar on China Trade Details

Mon, 18 May 2026 15:40:52 GMT

Grain and hog markets were sharply higher early Monday, with cattle mixed.

Grains and Hogs Soar on China Trade Details
Grain and hog futures were sharply higher on Monday morning as the White House released details of the China trade framework on Sunday.

It includes ag purchases of $17 billion for 2027 and 2028, with 2026 prorated and totaling $8 billion. This is on top of the 25 million metric tons of soybean purchase commitments they made in October of 2025.

Brad Koomia of Kooima Kooima Varilek says the $17 billion dollar of ag products was non-specific. So it is not known which commodities it will cover but he thinks the likelihood is soybeans, feed grains and beef. However, he is less confident about pork purchases.

“My reasoning is based on the idea that they haven’t bought pork for years already. Plus, the China hog herd has expanded after being decimated by African Swine Fever. What they do need is feed,” he explains.

What About Beef?
China re-listed 425 U.S. beef plants to export after concerns about ractopamine in U.S. beef.

They have been a large customer of variety meats, not muscle cuts, according to Kooima.

“We’re talking about stuff that a lot of us don’t eat anymore. Tongues. brains, offal product, but they seem to like that sort of thing. So maybe we can get a little bit of that. I don’t see that that part would be a market changer,” he adds.

If the plants test positive the plants will get de-listed and even if the U.S. can certify the beef is ractopamine free will China be able to afford U.S. beef?

Will China Follow Through?
Kooima says the real key is will China follow through with the purchases?

“China’s not reliable. “The worry is, is that like before, you know, they continue to posture and they don’t live up to what they say they’re going to do. So it is a game changer if they actually uphold it,” he adds.

Will China Drop the 10% Tariff?
The other unknown is whether or not China will drop the 10% tariff on U.S. soybeans.

President Trump said tariffs were not discussed, while Chinese officials says there was an agreement to drop some tariffs, with no specifics released.

“Hopefully we can work through at least some of this deal. I just worry that we’ll have this high expectation and then there’ll be some other we stub our toe on some other matter. And then, you know, then we got to retrace again,” he says.

Cash Cattle Continue to Set Records?
Live cattle futures put in higher weekly closes last week on the heels of record high cash trade in the country at mostly $265.

However, the futures continue to lag or show a big discount to the cash market. So when will that narrow?

Kooima says it may not. “I feel like the signal that we’re nearing the end of this thing is the change in basis, where the the cash much outperforms the futures and that’s happened. I mean we just put on $10 at the same time that the futures market, depends on which month,
but even the front month is below the contract high that we made two and a half weeks ago. And some of the back months are more like $5 below those highs.”

He says while the market is really good now due to tight supplies and May being the best demand month.

“There is a bit of a problem with the Choice boxes at only $389 and having no premium to the select is weird, seasonally completely wrong, which is a warning flag, I think, from a demand standpoint,” he explains.

So, while the cash may go up but the futures may not retest the highs.

Funds Liquidating in Cattle
The reason is the funds are liquidating in the cattle futures and open interest is declining, due to fears of increased beef imports.

“So it looks like you’re getting some of these fund managers or whatever that are saying, you know what, I’m thinking about taking my ball and going home. I don’t want to. want to be out here exposed to an announcement out of the White House, about fine-tuning a potential
executive order to alleviate the domestic beef shortage,” he adds.

He says the assumption is that will include relaxing the tariff rate quota on Brazil beef.

“We’ve been getting a ton of stuff out of there already to get this grinding meat,” he says, “Every time they get that blurb, the algorithms react to it and you get a futures reaction to it.”

The market is also concerned about the reopening of the Southern border to Mexican cattle or the possibility of a case of New World Screwworm (NWS) in the U.S.

CME Raising Cattle Futures Limits
On top of that, the CME raising cattle futures limits is also chasing out the funds.

“Bigger limits require bigger margin requirements, chases further the small speculator, increases volatility, all sorts of things. Some traders at least don’t like the algorithms, because they prey on that sort of market activity,” he says.

Cattle on Feed on Friday
The market is also gearing up for this Friday’s Cattle on Feed report which will likely start showing higher placements according to Kooima.

“Sure, because we’re comparing to such a small number from a year ago because the border has been closed that long now. I would say, yes, you’re going to see a marketing number that looks pretty dreary because we’re feeding cattle longer. And you’re going to see an on-feed number that’s above a year ago, too, for that matter,” he states.

Ft. Morgan Vote
Monday and Tuesday the Fort Morgan, Cargill plant workers will be talking about a deal and voting on whether they will strike or not.

However, so far the market does not care says Kooima.

“We’ve been on strike for or they haven’t been killing for a month for four weeks. And the market just does not even care about it. It barely gets
a mention. The numbers are that tight, okay? You know, in a different environment where we have more cattle to go around, this would be a much, much bigger and more bearish thing. One almost gets the feeling that management isn’t really bothered by the fact that they’re not killing,” he adds.

Grains Soar on China News, Iran War
The grains gapped higher over night and are soaring during the day session on the China trade details but also the Iran war rhetoric heating back up. That has energy markets higher leading to some inflationary buying.

“The sense that we’re back into this, what do we do when we go into an inflationary type of an economy? Corn, beans, wheat, those things seem to benefit in that kind of an environment,” he says.

Monumental Week: Grains Top After China News Fails to Excite

Sat, 16 May 2026 01:51:05 GMT

For the week July corn was down 15 ½ cents, December corn fell 12 ½, July soybeans lost 31, November soybeans were 18 ¾ lower, July soybean meal was $14.60 higher, July bean oil was down 44-points, July soft red winter wheat was 16 ¾ higher, July hard red winter wheat gained 12 ¼ and July hard red spring wheat tacked on 7 cents.

Corn and soybeans were lower for the week on technical selling and profit taking following disappointment over the lack of details regarding U.S. agricultural purchases out of this week’s China summit.

Recently, Jerry Gulke, president of The Gulke Group, had been talking about the building uptrend in the grain markets which made higher highs for two consecutive months. The key to keeping that uptrend intact was for the market to make new highs again in May. However, that trend fell apart with the lower closes in corn and soybeans this week.

Grain Bull Market Stalls
“Yeah, we were watching it very closely, and we kept getting new news ever since January 2 when the market started to go higher. There were some bumps in the road, but the market, especially soybeans, recovered from that,” he says.

The corn and soybean markets kept attempting to make new highs the last two months according to Gulke and even recovered from the selloff on from the shock of the WASDE on January 12 when USDA increased corn production to a record 17 billion bu. and found another 2.4 million harvested acres of corn.

Gulke says the market continued to shake off bearish trade headlines and rallied to close higher for February and above the January high.“March took out the February high and April took out the March high. So, there was no doubt about what the trend was.”
And then, according to Gulke, market analysts started getting bullish.

China Optimism Fueled Rally
“Many were recommended buying calls in case China came in to buy the additional 8 million metric tons (MMT) of soybeans or even corn.That was before we even knew the number of acres or the yield of this year’s crop, which could really make things exciting, “he explains.

Gulke says the market’s job is to digest all the information and make a price commensurate with what it hears or anticipates coming down the road, including optimism about the China meeting.

“It failed a couple of different times where we had key reversals up, key reversals down. We just couldn’t extend. And when you go sideways for a while, and say, if you ever extend to the upside and you break out to the upside then Katie bar the door,” he adds.

At that point Gulke says the markets go up just because they haven’t gone down for such a long time and it brings people into the market. “I even heard on CNBC that some people were selling some socks to buy commodities because of inflation,” he describes.

Monumental Week in Grain Markets
This week several markets, including new crop corn, soybeans and bean oil made contract highs and then reversed.

“What happened this week was monumental in my mind,” says Gulke, “The market tried to get higher again and there was enough information out there. Not so much what we heard, but what we didn’t hear.”

He says the lack of news on China ag purchases really topped the market from a technical standpoint.“I’ve seen this happen before. Markets tops are made on the most bullish news,” he says.

The same is true of lows, which are made when the news is the worst.Gulke says a prime example is the lows made in corn and soybean markets in August of 2024 on massive forced farmer selling ahead of first notice day for September contracts.

“And then we turned around and went higher from there. So, the reverse is true.”

Market Ripe for Profit Taking
Gulke says the correction wasn’t a huge surprise because the grain markets were due for a correction, especially as traders get caught leaning the wrong way as push the market farther or higher than it fundamentally should trade.

Has the Grain Market Topped?
So, with lower weekly closes on corn and soybean have those markets topped?

Gulke thinks from a technical standpoint it is possible, “I’ve got to ask myself, what is it going to take now for the market to go back up to those price levels and make new highs?”

He says the market started falling apart overnight Wednesday when President Trump and President Xi were meeting in China.

“You could just see that this thing was unraveling because things weren’t what we thought they were going to be. So, now the market looks at the prices on Tuesday and Wednesday and by Thursday morning thinks we were way too high, and sells off,” he says.

USTR Jamieson Greer stated China will buy double digit billions of dollar of U.S. ag goods over the next three years.

However, Gulke says the 25 MMT of soybeans China verbally agreed to buy is the only framework for bushels the market currently has to work with as no agreement has been signed.

“Once you harvest the crop, we’ll find out whether China wants to buy at a cheaper price. You know, if I were China, no way in the world I would step in and buy $12 soybeans after they’d been $9.50, 18 months ago. And you’ve got Brazil still selling cheaper beans. Same way with corn,” he says.

So, until more details are known about China trade, he adds the only hope for a recovery in the grains markets is weather.

For more information you can contact Jerry at info@gulkegroup.com .

Grains Slide Further After China Summit: Is the Long Term Uptrend Still Intact?

Fri, 15 May 2026 21:25:56 GMT

Grain and cotton markets continued lower on Friday with cattle higher.

Grains and Cotton Slide Further After China Summit
Grain and cotton markets saw follow through selling and fund liquidation for a second day.

Shawn Hackett with Hackett Financial Advisors says the market was removing China premium after the disappointing summit as the market wanted more details on ag purchases.

“I just think the concept here was that most people believed, including myself to some extent, that we were going to have some tangible,
concrete evidence of increased purchases of other ag products whether it’s corn, whether it’s cotton and such forth. We just felt that for him to go out there and come back empty-handed was not a likely scenario and he came back the way it looks pretty empty-handed without anything
tangible anything concrete,” he explains.

Market Wants Proof
Despite USTR Jamieson Greer stating that China would commit to double digit billions of dollars of agricultural goods for the next three years the market discounted it.

Hackett says the market now wants proof of sales.

“It needs proof. It needs to know how much of which markets. When are those purchases going to start in earnest? Is it going to be a quarterly thing? Is it going to be just an annual thing? Can they do it whenever they want? So much of that has to do with what’s the appropriate pricing
discovery mechanism for today based upon the nature of these purchases.”

He points out that during the Phase One there were exact quantities.

“And that gave the market clarity on how to handle the supply demand equation in each of those markets. We’re left guessing and guessing isn’t going to bring confidence into our markets to bid them up from where they were prior to this meeting.”

How Much China Premium Left to Remove?
So the markets have been extracting China premium, especially cotton and soybeans and there was way more premium than people even thought.

Many observers thought the recent run up in grain and cotton markets was tied to weather and war or geopolitical premium, not trade premium.

“And given the way things. have played out the last couple of days it’s becoming clear that a lot of that late rally we saw leading into this meeting was more about the trade premium than anything else and I think the market got surprised in misdiagnosing what the premium was coming from and hence you know the big knockdown and the big surprise,” he says.

How Much Lower Will Grain Prices Fall?
So how much more fund selling will those market see and how low could grain prices fall?

He says, “Maybe we have another day or two, but I think most of the heavy selling is behind us. I say that because it’s so early in the growing season. I think the market, in order to get the funds to liquidate more, will want to see that we’re going to have a good growing season.”

Funds Stay Long Through Early Growing Season
He says it’s still too early for the speculator to give up on their long positions and the weather.

“In fact just if you look at cotton today it was kind of hard down lock limit through most of the day but then did come off limit here as we approach the end of trading and so that says to me that we might have gotten most of those short-term aggressive traders out of the market and we might at least stabilize next week,” he adds.

Chart Damage
Still cotton, soybean oil, corn and soybeans posted lower weekly closes and reversed from new highs early in the week and scored reversals.

So, how much technical damage was done?

“It’s a strong reversal but if you look at the up trends that we that began at the beginning of the year we’re still holding those up trends even after today but barely meaning we’re at a point where if we’re going to maintain any technical. credibility, we need to dig our heels in here and at least abide by the upward trend line,” he explains.

So it was a warning sign but he thinks as long as the uptrends hold it will prevent any additional technical selling.

Iran War Not Over
Plus, he says the Iran war is not over and energy prices are still going up, even though the grain futures ignored it on Friday.

“There’s too many uncertainties that’s going to want to keep the speculators holding some ground here,” he states.

That inflationary concerns are not going to go away. So at some point is that going to come back to be supportive for grains and cotton?

Hackett says, “Absolutely. I don’t see that this Iran situation, anything has really changed. The fertilizer situation is definitely not changed. The further we get on into the year, the more this fertilizer situation, especially in places like India and Brazil, where they really don’t have to import so much of this fertilizer, are going to start to show themselves into needing higher prices to effectuate the outcomes that we need. And so that’s a good long-term supportive mechanism.”

Near Term Weather More Favorable
Near term weather is looking for favorable with some rains in dry areas of the Western Corn Belt and Southern Plains.

“Good rains in Texas, the deep South, the Southeast areas that haven’t had a drop of rain in months. No doubt that the weather in the next couple of weeks is going to be quite productive. Doesn’t mean it ends the drought scenario there, but it takes the pressure off. It allows some planting to accelerate where they haven’t been able to plant because it’s been too dry,” he says.

So that is not going to give the speculator any reason to want to add weather premium.

Has Wheat Topped?
The wheat market has already been removing weather premium he says and may have put in a spike top the day of the USDA report.

“It looks like it traded the worst news you could trade on the bad U.S. winter wheat crop,” he says.

The results of the Kansas Wheat Tour confirmed the 54 year low in the wheat crop USDA printed but that even failed to move the market so the worst news is priced in.

“They didn’t say it was good, but they said it was a little better than the USDA said. And remember, we are only the fifth largest producer in the world and we’re only the fifth largest exporter in the world. Russia, Ukraine looks great. They look like they could have a record wheat crop and others don’t look so bad either. So I think you have to say, how much premium can we add onto the market?”

Bullish Grains for 2027
So Hackett says he is still bullish for 2027 grain and cotton futures, especially with the weather set up.

“Our view is we have this significant El Nino weather pattern coming for the U.S., which means very good crops. But once we digest this crop, everything that I see going forward on weather, everything that I see on cost of production says to me that in 2027, we should be looking at prices considerably better than what we’ve just seen before this big break.”

Cattle Rally With Cash and Futures Discount
Cattle futures were higher on Friday with another week of record cash and continued tight supplies. So how long will that hold prices at these high levels?

Hackett says, “We don’t have the animals. And so unless, you know, somehow we’re able to import some higher quality beef. I mean, we’re bringing the lower quality side, but the higher quality we’re not. Unless the Mexican border opens up, or Brazilian tariffs are cut, it’s just hard to see how you could get a big break in this market.”

Plus, grilling season demand should continue to support.

He adds, “The cattle situation will take years to get ourselves out of this, not three to six months.”

China to Re-List U.S. Beef Plants
News also out on Friday afternoon that China is relisting 425 U.S. beef plants for export.

Hackett says the U.S. doesn’t have a whole lot of beef to export and prices may be too high for them to buy anyway.

“I would argue, do we really need to be importing beef to China? I mean, I’m sure every cattle producer wants the highest price he can possibly get, and I understand that. But at the same time, I mean, we’re dealing with a terrible prolonged structural shortage of very, very high beef prices. The president wanting and demanding that beef prices come down. It just seems to me like we’re at odds.”

Cattle Higher as Cash is King, How Crazy Could it Get? Hogs and Grains See Fund Selling

Fri, 15 May 2026 16:02:42 GMT

Cattle were higher early Friday with the rest of the ag markets lower.

Cattle Rebound Friday
Cattle futures took a breather Thursday but were back higher early Friday with volatility reigning supreme according to Scott Varilek with Kooima Kooima Varilek.

He says the cattle futures are getting tougher and tougher to trade because of the choppy action. “Because there’s no bids, no offers. The volume is hard. I mean, you try to sell five feeders at the market and all of a sudden it kicks the order back because there’s too much movement.”

That is making it tough for hedgers to use the board.

“So and as we’re doing these hedge strategies, we said, OK, we would like to use a spring rally to try to get some long term protection on. Now,
putting that on is really hard in these markets and you have to be ready. It’s not going to be cheap to get some floors on in the feeder cattle market,” he says.

Record Cash but How Crazy Could it Get?
The futures market is still at a discount to this week’s record cash trade which continues to look bullish.

The volume of cash in the North was in the $265 area but the South also saw $260 to $262 as packers seem hungry for cattle according to Varilek.

“I mean, just the hunger from certain majors and all the packers out there buying these cattle is really wow to me. We get some $265 trade, you know, getting this really wide basis normally this is our widest basis is in May and at record prices,” he says.

And packers are buying at these prices for delayed delivery into even the middle of June which is also bullish.

“They’re just grabbing a bunch of inventory so that way they can sit for a while and then it seems like then they’re back the next week already. So still tight supplies up front. It feels really good. And I love it that some of these majors are out front. You know, for the north, that means a lot.”

He says usually Northern feed lots have a hard time getting bids from certain packers but that isn’t the case this year as the cattle market is into its tightest supplies.

“But we’re turning over to this calf crop where these weights are a lot lower, and we’ve got cattle on feed that we might not want to sell yet and packers are calling bidding on them,” he adds.

So next week he expects asking prices will be higher at $268 to $270.

Higher Cattle Limits
Part of the break in the futures on Thursday was news the CME Group was raising limits on cattle again to $8.50 on live cattle and $10.75 on feeder cattle.

Varilek says that only benefits the big fund traders and they are pushing for it, to the expense of producers.

“We do not want that as producers. It’s hard to see our bottom line change by that much just in the matter of seconds. It doesn’t feel like we need that,” he adds.

Ft. Morgan Union to Vote on a Strike on Monday
The Fort Morgan, CO Cargill beef plant union is expected to vote on whether they are striking or not on Monday.

However, Varilek says it may be a non-event because the plant has been dark and the market hasn’t cared.

” And it just feels like we haven’t traded that real hard just because it’s been closed for four weeks and yet we’re still seeing cash move higher. Packers are still very aggressive buying cattle. It’s like, OK, I guess I guess nothing happened. So if there’s some more new news next week, maybe we’ll see if it really dives into the market.”

He’s doubtful it will but the bigger concern is another plant closure.

China Beef News
Conflicting news reports on China re-listing nearly 400 U.S. beef plants for export ended with China still not accepting U.S. beef.

However, Varilek says the market did not trade it.

” I feel like we brushed it off, you know, just because, number one, we know Trump’s saying beef prices are too high and he wants to import a bunch of beef to try to handle this tight supply. So we know we don’t have just a large amount of beef to sell, to export, you know, so we don’t really have it. So then the fact that it came out that they’re not, I don’t think we’re trading that real hard,” he adds.

Hogs Spiral on Mexican Export Resistrictions?
Lean hogs saw a nice rally on Wednesday but failed to get follow through buying on Thursday or to start Friday.

Varilek says the inability of the market to find a bottom may be tied to Mexico putting some export restrictions on U.S. pig semen, live breeding animals and offal due to pseudorabies.

“A negative flag that it’s raising there just because Mexico is our number one customer there for pork and and we desperately need it and this adds value to some of the lower quality pork products,” he says.

He says this doesn’t impact muscle cuts but Mexico does take a large amount of variety meats and this accounts for 10% of all their imports.

That is offsetting some of the positive news in the market including that two to three packers aren’t killing on Fridays because they can’t find enough hogs.

Funds Sell in Grains on China Disappointment
Grains are lower again Friday after funds sold hard in the grain and cotton markets on Thursday.

It was in response to the lack of tangible agricultural purchase commitments from China during the summit in Beijing.

Will the funds continue to liquidate in the grains after the technical damage done?

He says, “Yeah, we’re doing some short-term chart damage here and things just are trading pretty ugly today despite the higher energy markets. The grains had rallied on hopes of China business and just the fact that we did not get any news the funds didn’t like it,” he says.

How Low Will Prices Fall?
Varilek sees the grains slipping back into the recent trading ranges but there is good chart support on the bottom side of the ranges that should hold going into the growing season.

“So I’ll be looking for Sunday night’s trade to kind of start to hold as funds usually liquidate in three day waves. We might try to find some value buyers, some end users in some of these markets. So not ready to write it off and say, we got to go find some new lows here,” he says.

Grains Collapse on China Disappointment: How Low Will Prices Fall?

Thu, 14 May 2026 21:46:09 GMT

Grains were sharply lower on Thursday with livestock also seeing pressure.

Grain and Cotton Markets Fall on China Disappointment
Grain and cotton markets crashed on Thursday with profit taking and fund liquidation tied to disappointment over the lack of agricultural purchase agreements during day one of the U.S. China summit.

Don Roose with U.S. Commodities says soybeans saw the brunt of the selling.

“We had some optimism that we were going to get some kind of a big trade deal with China. So, we went in with a lot of optimism and I think as we look at it so far there just really isn’t anything new or anything concrete. In fact, it seems like some of the other bigger focuses on like jets and some of these outside things versus the ag products,” he says.

U.S. Treasury Secretary Scott Bessent said while China does not need old crop soybeans the original 25 million metric ton agreement on soybeans struck back in October is still in place. Still there is nothing in writing.

Roose says, “Yes, that’s the only thing that we’ve picked up here so far is that the old agreement, the verbal agreement that they had, the 25 million metric tons for the next three years each year is going to be in place. And by the way, that’s pretty much what we’ve had over history or at least the last 10 years. So nothing really big on that one either.”

And he adds that now the U.S. faces big competition from South America’s record crop.

“And now we have to compete in the world market and it seems like China is pretty well bloated with soybeans. So that makes it tough for new sales. You look at the balance table for next year, 26, 27 the government took the liberty to up the exports 100 million in the WASDE. So let’s call that one iffy here so far.” he adds.

No 8 MMT Old Crop Soybean Purchases

Many in the trade had questioned the idea of China buying 8 million metric tons of old crop soybeans when President Trump posted the news on social media on February 4.

Roose says it made no economic sense for China to buy U.S. soybeans with Brazil so much cheaper.

“Yeah, you know, I mean, during that time frame, and even now, Brazil’s sitting somewhere, let’s just call it 80 cents cheaper than we are at the Gulf. So, yeah, economics. And that’s what the Chinese, so far in the meeting, they say that they’re really looking forward to trade, fair trade, and trade that makes sense for this around the world from a price standpoint. So it looks like to us that they’re very price cautious and conscious and that means that our soybeans probably are not the first choice here right now,” he says.

Tariffs to Fall?
The one question mark is whether or not the tariffs might be lifted between the two countries for the next six months.

Roose says those are still just rumors. “We’ll see if the tariffs come off 10% on each side and get back to more of just a normal type of a trade.”

He points out that even if the tariffs come off South American soybeans and corn are still a lot cheaper than the U.S.

“So from a soybean standpoint, we’re still going to have to compete in the world market, which right now is a little bit tough with South America coming as heavy with some big sales,” he adds.

Technical Damage to Grain Charts
So with the big wash out how much damage was done to the grain charts?

Roose says new crop soybeans had been in an uptrend for nearly a month but with the close the technicals now show the market in a downtrend.

“So from our standpoint, we did a lot of damage.”

He says the corn and soybean oil markets also show chart damage.

“It started already Wednesday in soybean oil. The corn market, old and new crop, turned into a downtrend. Soybean meal, a downtrend. The one that’s still holding on the ventilator and that’s the wheat market.”

How Low Will Grain Prices Fall?
On top of that the funds are record long across all the grains according to Roose, so will that trigger follow through selling?

He says, “When you have a market turning into a downtrend and you’re overbought, which we still are, and back to the funds and you’ve got them moving, you know, you’ve got to be pretty concerned here. So not a good close, not the type of close you’d want to see. Needs to bounce back at the end of the week significantly.”

If not how low will grain prices go to take out the China premium in the market?

Short term he doesn’t think the market can take out too much premium because of the war and the outside markets.

“I think we take it in steps. Let’s look at these crop ratings. They’re going to be coming out here soon. So ultimately, if everything goes perfect and with big South American competition or the war gets straightened out. You could see balance sheets swell.”

Longer term he’s watching acreage in June and weather but still thinks there is downside risk.

“In the $4.00 to $4.20 are on Dec corn from our standpoint and maybe even $3.80 to $4.00. Soybeans, we think we have more of a target in this $10.00 to $10.50 area, and maybe $9.80 to $10.00. We’ll just see as farmers aren’t going to want to sell it.”

So Roose says the market is in risk management territory.

Weather and Rain Chances
The extended forecast has some rain for the Corn Belt which would help some of the dry areas, especially in the West.

“It looks like a bulls eye that we’re going to have in the gut slot of the Corn Belt. Some timely rains, if you will, you know, getting a little dry for some of the people that just planted. Who’s going to be shut out yet? Looks like western Texas, Oklahoma, parts of far western Nebraska and such. But a lot of these dry areas are going to get hit too in the Dakotas and Nebraska, so that’s good,” he adds.

Wheat Falls as Well
Wheat futures were also lower on spillover from lower soybean and corn markets. The soft red winter wheat contracts hit new highs then reversed lower and scored a hook reversal.

Does the market also have the winter wheat production cuts all factored into prices?

Roose says the market may have priced in the shock of the 54 year low in the U.S. crop with the limit up close on Tuesday.

“I think the real issue when you look at the demand side of the market are the importer or the exporters are, you know, just really not interested here at this price. We’re just priced out of the market is the real issue on the wheat,” he explains.

Kansas Wheat Tour Results Better Than Expected
The Kansas Wheat Quality Council Tour wrapped up on Thursday but the daily yield summaries came in a bit better than the trade had expected says Roose.

“Sometimes we dial in, you know, a lot worse than we think and its starting to show up a little bit better. So, you know, that’s probably, you know, another factor. You know, we always say, I always say this, Michelle. The numbers are the numbers, but it’s more important how you react to the numbers. And certainly, so far, the market’s told us that we’ve got plenty dialed into the market,” he adds.

Cattle Fall in Disappointing Finish
Cattle futures were higher on Wednesday on the heels of record cash and continued to see buying on Thursday morning. However, the market could not sustain those gains and ended lower which was disappointing.

“Kind of what I call a disconnect. You know, we’re watching the supply side of the market. And of course, the numbers just aren’t there. Now that said. I think this front end cattle market is bloated. I think that we have bigger numbers coming at us than we may think. We’ll see over the next 30 days. I think we put more weight on these cattle and consequently we’ve got a bunch of numbers coming at us,”

Record Cash Cattle
It was still discouraging consider the record cash trade in the North from $265 to $268, the volume in the South at $260 to $262.

“The market couldn’t really respond again here to follow that up.”

He thinks beef demand is still in question as the boxed beef rally has stalled out and the majority of the best demand is fading.

Still this has been a cash led market and it will continue that way he says.

“So the futures can only go down so far. The basis is already a little bit wide here right now,” he adds.

Lean Hogs Stumble
Despite the lower price of pork compared to beef the hog market can’t seem to get any traction or find a bottom.

Roose says the numbers are bigger than the market anticipated. “Of course, a lot of the premium we put in when we went up to that $112, $113 for the summer months was that the big disease issues, they’re there, but I think numbers may be a little bit bigger. Let’s give it a chance to see if these seasonals can kick in and demand can pick up,” he adds.

Grains Tank on Lack of China Ag Purchases: Cattle Rally on Record Cash

Thu, 14 May 2026 15:36:18 GMT

Grains were sharply lower on Thursday morning, with cattle higher and hogs seeing losses.

Grains Fall on Lack of China Ag Purchases
The grain markets were sharply lower Thursday morning with soybeans seeing 30-cent losses on disappointment the China summit has not produced any agricultural purchase agreements.

Randy Martinson with Martinson Ag says, “Bessent came out with a comment earlier this morning and said that China’s needs are taken
care of as far as the soybeans are concerned. And I think that really sent the shockwave through the soybeans starting that market to trend a little bit lower. That spilled over, you know, cotton was lower. And we’re also seeing it hit the corn and the wheat market as well.”

No Old Crop Soybean Purchases From China
So it looks like China will not be buying any of the additional 8 million metric tons of old crop soybeans President Trump posted about on February 4.

“We were hoping that we could see, you know, there was talk about that 8 million metric ton more, you know, that we heard in this winter. We were hoping that we would see at least a portion of that come for soybeans. And of course, now with it kind of slipping and looking like there’s not going to be anything, that they’re going to kind of stay with their original agreement. That kind of has taken some of the wind out of the sails.”

Martinson says the hope is the U.S. will still get some type of signed agreement with China and they will commit to the 25 million metric ton a year they talked about in late October.

“I mean, with this meeting right now, it would be nice to get that in writing so that it’s clarified and then we can basically then feel comfortable with it. Now, Trump did invite China’s president to come to the U.S. in September, I think September 24th. Maybe that’ll be a trade deal done there. But, you know, this is kind of dragging out. This has already been almost, you know, nine months since they started talking. And it would be nice to get the trade deal actually in ink.”

The talks are not completely done and there was a flash sale Thursday morning for 9.3 million bu. of soybeans to unknown destinations, so maybe there is some business from China.

Weekly Exports Anemic
Meanwhile, the weekly export totals showed a marketing year low for old crop soybeans at only 3.8 million bu. while corn was at 27.0 million and wheat was at 4.9 million.

Martinson says, “I think, you know, corn came in also at like a 14-week low or something like that. So, I mean, yeah, they were dismal. I mean, we’re getting to the end of the marketing year for wheat, so you kind of expect to see exports start to slow down in that market and switch to the new crop. But for corn and soybeans, we would like to continue to see that move forward. And we have had a pretty good run up in prices, and that probably slowed down some of the sales.”

The weekly export report also indicated no new soybean business to China either old crop or new crop.

Martinson says there is still time for new crop sales. “We have not, you know, and most were anticipating we wouldn’t see them come in and start buying the new crop until probably the August, September timeframe. So that kind of leads into why we’d like to see a signed trade deal now, but that might coincide more with the September meeting if China’s, if Xi does accept Trump’s invitation.”

Grains Take Out Chart Support
Grain markets were seeing some support areas violated on Thursday morning with July corn under the 20-day moving average and July soybeans were below the psychological $12 mark.

“One day it doesn’t make a trend, but, you know, we see follow through tomorrow likely and that would then start to make us wonder a little bit that maybe we have rolled over. We close below $12 and we don’t see the market pop above it again tomorrow. Then I think the party’s basically over for the growing season. We could likely see some pressure until we see the crops done planting and we start to see a little bit more weather issues during the growing season,” he explains.

Corn was flirting with support on the July contract at the 20-day moving average and he says the market could hold up better than soybeans because it did not have as big a rally coming into the China summit.

December corn and November soybeans had just made new highs and new high closes for the move on Wednesday so the reversals there are also disappointing.

“I mean we’ve actually been seeing the new crop push pretty good because we have some concerns about the growing season you know you know and we kind of saw that in the USDA’s report on Tuesday you know and corn stocks are comfortable, but if we see some sort of a hiccup in
production, whether acres come down or yield gets adjusted, you know, things can get to be fairly, you know, get a little tighter pretty quick. With soybeans, you know, we lose two bushels off the national average yield, which is estimated at 53 record again. You know, then all of a sudden we cut our stocks in half.”

House Passes E15 Bill
The House also passed the year round E15 bill yesterday and it now goes to the Senate. If it passes will it be a big demand push for corn?

Martinson says it is positive but it will take a while to see a big impact on corn demand.

“A lot of the plants are pushing capacity or close to it. You know, we’ve got a few that are expanding there. You know, this year they’re doing the construction to expand. Overall, you know, it’s going to take a while to get to the point where we could do an E15 blend year round consistently. I don’t think we’ll get to an E15. I think we could get probably to an E12, E13 as kind of be the national blend and that would still chew through a few more bushels. I mean, we probably would still add about a billion bushels to the corn demand at that point,” he adds.

EU Rejects Argentina Meal
Soybean meal was up over $10 on Wednesday on news the EU had rejected another cargo of Argentine meal on quality and genetic concerns.

However, that was a short lived event and Martinson says it won’t be a big market mover unless it happens more consistently.

“I do think it’ll help increase some of our meal demand in the U.S. as EU, which is now on a timeline to get their trade deal done with the U.S. I think that’ll help kind of calm some of the nerves on that.”

Production Cuts Priced Into Wheat Market?
The wheat market was lower on Wednesday and seeing follow through selling with spillover from the lower soybean and corn markets.

However, USDA’s big production cut in the WASDE by 36% on the hard red winter wheat crop may be factored in according to Martinson.

“It was a shock to the market and they weren’t anticipating it to be that big of a cut. You know, what was interesting is that with USDA making that big of a cut, you know, there’s going to be more cuts coming forward, you know, coming in later months because they normally don’t make that big of a one and then not follow through with something. So I do think we’ll still see that crop get trimmed. But at this point, you know, I don’t know if it matters. I think, you know, with corn and beans kind of coming under pressure, it’s going to pull wheat with it.”

Pressure should be limited though by the tighter new crop ending stocks.

Demand Destruction
The other key is are pricing getting high enough it is choking off demand?

He says, “What was interesting is when you looked at the world numbers from Tuesday, every single major exporting country is cutting
production or seeing a reduction in their crop size going into 2026. So what we saw as a run up in 25 is coming back out of the production side in 26. So everybody is looking at cutting back on production.”

Kansas Wheat Tour Results
Day two of the Wheat Quality Council Tour in Kansas showed a yield of 39.3 versus 53.3 BPA last year.

However, the results of the first two days have failed to move the market.

He says, “It seems like, you know, it’s even hard to find them in the press, you know, because it’s, you know, it seems like everybody’s attention has just been so focused on, you know, the E15 year round and then also with the China-US summit that we’ve kind of put this wheat quality tour to the back burner.”

Cattle Futures Rally With Record Cash
The cattle futures were higher Wednesday and seeing follow through buying Thursday with record cash trade breaking.

The North came in at $265 to $268 live and $405 to $410 dressed. The South traded $260 to $262.

“Cash is king. I mean, that’s what’s leading the market. That keeps increasing and that keeps bringing the market back or kind of breathing life into it. We had a little bit of a concern earlier in the week with the idea that we were going to lower the import tariffs and increase imports from other countries to kind of bring the price down for the average consumer,” he adds.

But higher cash trade rallied the board and consumer demand has stayed strong...so far.

“I mean you look at the report on Tuesday the per capita consumption of beef is expected to increase,” he adds.

China to Register Beef Plants?
Conflicting news wire reports out of China indicated they had agreed to re-register 400 U.S. .beef processing plants.

“They were ready to do it, but then an hour later they rejected it and reversed their decision to register them. You know, at this point, I don’t know if we’ll see much exports anyway, because our exports actually have been decreasing for this year because of the higher cost. And I think if they’re going to import some protein, they’re going to import something that’s a little cheaper than beef is right now.”

Row Crops See Slight Gains Wednesday, Cattle Soar on Record Cash

Thu, 14 May 2026 01:44:35 GMT

Corn and soybeans ended slightly higher, with wheat lower. Cattle and hogs both soared.

Row Crops See Slight Gains
Corn and soybeans were slightly higher on Wednesday with fund buying tied to inflation concerns and some optimism heading into the China summit.

Sam Hudson with Cornbelt Marketing says corn got help from limit up moves in the wheat market after the WASDE but Wednesday traded its own fundamentals.

“USDA data paints a picture where we don’t have a lot of downside, you’re looking at a trend yield, you’re looking at pretty solid acres here. And with that, we still see stocks to usage go backwards about 1% year over year. And there’s just not a lot of breathing room for any errors. I think the fertilizer aspect of it also paints, you know, the idea that you could actually lose a few more acres at the end of June. So with all that going on, it’s just it’s hard. to get tied to a short position, especially when you continue to make new highs. And it was nice to see us press through the $5 mark, but not fade it off real hard. We’re going to probably find some support here now at that level until we can learn about what some of these geopolitics do into the weekend.

December Corn Makes New Highs
December or new crop corn made new highs on Wednesday and posted new high closes. So how much higher could the market rally?

Hudson says, “Well, the $5.08 to $5.13 zone is kind of one I’ve been watching and waiting for here for quite a while. I would say this is a successful more or less test of that. If you can exceed those levels, though, Michelle, and continue to keep a bid in that wheat market and optimism on soybeans and energy markets in general, then I think it’s possible you could track up to that $5.45 to $5.65 zone.”

However, he thinks it will be more of a grind to get to that level with plenty of old crop corn available.

“Demand is big, but we’ve got enough supply to service it. I think where you really get concerned is if you have to pull back. that supply number, whether it’s in acres or yield here down the road,” he says.

E15 Optimism
Some lightly buying could have been tied to hopes the House would pass a year-round E15 bill in the House on Tuesday afternoon.

“There’s certainly plenty of opinions to be had on that but it’s a lot of hype. I don’t know if it matters a ton for demand. I’ve probably been in that camp for quite a while. The adoption process, the pace of that is all filtered back into that. And my issue with it is, you know, whenever we get legislated demand, I’m always wondering about what’s coming along with that in the fine print. You know, thus far, over the last two or
three years, I think the biggest growth and benefit I think that we’ve seen without that is the fact that other countries around the world have adopted it at a much faster pace and that really helps facilitate our exports, especially in an energy pinch like this.

When Does Weather Become a Factor in the Corn Market?
So when will the corn market stop chasing headlines and start trading weather? Hudson says seasonally the market is getting into that window but so far there is no threat.

“It’s really hard to hurt the corn crop between now and, you know, July 1st at this point. It seems like we’re putting that cold weather in the rear view. You might have a few places that are still struggling to get stuff replanted and kind of filtered in here. But on the whole, you know, it’s only the 13th, 14th of May here. We typically plant our best corn, at least in central Illinois, during that time frame anyways. And so I don’t think there’s a lot of concern unless you go cold again or if we’re still looking at persistent rains for the next two weeks,” he says.

The Western Corn Belt is seeing some dry conditions but he says states like Nebraska have irrigation to get the crop up and going.

Soybean Market Awaits China Summit
The soybean market has been trading optimism of a China deal out of the summit this week for some time now. So what are the bulls looking for in the deal and what is already programmed into soybean prices at this point?

Hudson downplayed the meeting. “You know, I don’t know if it’s going to be a big deal as what we want to make it out to be. And the reason I
think that is I don’t I think you could have a lot of frameworks for some of those deals, especially when it’s pertaining to soybeans and some of these ag commodities like that. But we need to see details to see a lot of follow through buying. You probably need to see details,”

He says with the gains in the soybean market going into the meeting there is 30 to 50 cents of risk on the knee jerk reaction if the meeting doesn’t go well.

“But in the same breath, if that meeting doesn’t go well, it probably means you don’t have any more progress in the Middle East. And that’s going to keep our energy markets supported and that inflationary aspect still well alive.”

Soybean Meal Rally Supports Soybeans
Soybean meal was up more than $10 on Wednesday with some unwinding of meal/oil spreads which Hudson says is affecting soy processing margins and company stock.

“ADM would be a perfect example. Some of these biofuel companies, keep in mind the hedges they have to hold during all this. A lot of these margins were locked in initially when we shut the oil flow off from Venezuela, those margins improved. And ever since then, they’re just using their profits to feed their margin calls. I think those profits are going to be even wider here as you get into the fall months and they have new supplies to capture that on,” he explains.

Crush margins had been running at record levels at soy processing plants across the Midwest but especially in Illinois.

November Soybeans to New Highs, July Eyes March Highs
The November soybean contract made new highs on Wednesday and posted a new high close, while July soybeans are still trying to reach the March high of just over $12.50.

Hudson says there have been no soybean shortages yet requiring a push in prices.

“There’s plenty of supply to meet the demand. Those crushers can’t get it in and crush it fast enough. In the meantime, you know, if China wants to buy beans, I still think if it happens it’s going to end up on the new crop balance sheet. I don’t see them knee jerking to buy any old crop beans. And let’s face it, they haven’t really committed to a lot of new crop. So even if we get a positive announcement here, again, you have to look at the details and the volumes of it. And I just don’t know if we’re going to have all that this early in the game.”

Wheat Eases After Limit Up Moves
Winter wheat futures made more new highs early Wednesday still trading the 54 year low in production printed in the WASDE.

However, the market ended lower on a combination of profit taking and some farmer selling.

“We probably all knew this was coming anyways but I don’t think anyone knew the USDA was going to make early adjustment like this
and this instantly has me thinking and probably a lot of other people that you’re going to continue to see additional supply cuts and the first question I have is if the abandonment is going to be that high where do those acres go,” he says.

Options include milo or soybeans and that could impact the acreage numbers at the end of June.

Markets Watch Kansas Wheat Tour Results
The market also faded day one results from the Kansas wheat tour which came in at 38.3 bu. per acre compared to 50.5 bu. for the Day 1 estimate in 2025.

While the tour reinforced USDA’s estimate and there were plenty of visuals to go with it.

“Some of those pictures are just horrendous and just, you know, underscores how bad things are.”

Wheat Pausing Before Next Leg Higher
So was the wheat market just pausing to get more bullish information before taking the next let higher?

Hudson thinks it is possible for wheat to move higher but it is likely to happen in the deferred contracts.

“Because think about acres for next year. You know, not only, you know, we raise wheat all around the globe simultaneously. That’s one of the first markets you could lose acreage somewhere in like a third world country if they can’t get fertilizer or the cost structure gets too high.”

Cotton Hits New Contract Highs
Cotton futures were back higher on Wednesday and nearing the 90 cent mark but will the market get there?

Hudson says, “At this point, why not? You know, we’re looking at two year highs now at this point. I think you’re, you know, this is two prong.
I think you’re looking for more acres, but also the energy pinch that we’re seeing, you know, makes cotton a lot cheaper compared to a lot of this polyester we’re wearing anymore. All those leggings out there.”

Cattle Correct
Cattle futures were higher on corrective buying and with help from higher cash and easing fear about the administration lowering the TRQs on beef imports to increase supplies.

Hudson says, “These headlines took some of the length and took the edge off, but the cash markets are putting it right back in.”

Still he thinks it will be difficult to keep the funds in the market as they will lack confidence in being long with if the administration starts talking
about lowering beef prices again. Funds were still long over 138,000 contracts as of last Tuesday.

He points out that the fundamentals have not changed.

Cash at Record Levels
Cash trade had already developed early in the week at $260 in the South and bids were renewed at higher levels while the futures were trading.

After the board closed the North saw cash trade ranging from $263 to $265 late and dressed prices as high as $410.

Hogs See Short Covering
The lean hog futures were also higher seeing short covering after hitting new lows for the move on Tuesday.

Hudson says the market got oversold. “Things got a little cheaper than I would have expected. Maybe I had a bit of a bias there but with the capitulation you saw on the chart today, maybe that’s enough to put a bottom in this market, at least for a little while until we see how some of this geopolitics play out that we talked about.”

The back months also continue to price in disease concerns and are chasing the higher priced beef market.

Row Crops Extend Gains Wednesday: Is a Bull Market Emerging?

Wed, 13 May 2026 16:25:01 GMT

Grains were mostly higher early Wednesday. Livestock started mixed then turned higher as well.

Has Wheat Priced in Production Cuts?
After limit up closes on Tuesday, the winter wheat market started mixed Wednesday under expanded limits.

Jamie Gieseke with Paradigm Futures says futures were pausing to digest USDA’s big production cut on winter wheat to the lowest level since 1972.

He thinks additional upside is limited as the market has factored the cuts into the market. “I think for the time being, yeah, it’s priced in. We’re struggling to get the European wheat complex to follow along. I think we’re going to need some support from that market to extend this rally on the U.S. wheat side.”

Kansas Wheat Tour Results
Meanwhile the Wheat Quality Council is holding their annual tour through Kansas this week with a summary on Thursday. The first day of the tour, showed a 38.3 bushel per acre yield versus 50.5 last year.

That surprised Gieseke. “I mean 38 isn’t too far off from the five-year average closer to 45. It’s just been extremely dry, I mean it started out hot and low moisture and then you throw in a frost and a freeze and now it’s still staying dry. So, I would have expected a bigger deeper cut than you know six to seven bushels.”

Abandonment rate will be the big key he says especially with higher diesel costs providing little incentive to harvest the crop, even with higher wheat prices.

“Higher diesel costs. I mean, that’s that’s something that the farmer is going to get charged with fuel surcharges. We all know feed trucks are charging fuel surcharges and anything with transportation is going to be higher input costs. If you have a marginal wheat crop, I just kind of really question how much they’re going to be anticipating going to get it,” he explains.

Global Wheat Numbers
Digging into global wheat numbers in the WASDE he was looking at the data on Australian from the Foreign Ag Service regarding 2026 production and Canada.

“They were going to cut production in Australia due to lack of fertilizer or diesel they accounted for some of that but more so they the bigger side of the cuts that they made for the 26 crop was due to weather shifts accounting for El Nino. The WASDE actually did a pretty good job of funneling that into yesterday’s report. I think the Foreign Ag Service cut Australia production about 7 million metric ton year on year. I believe the WASDE cut it about six. So they did a good job of incorporating that into yesterday’s report. Canada actually also got cut. Foreign Ag Service also cut Canada’s production here beginning of April. So they did a good job of accounting for that in yesterday’s report.”

Corn Trading Higher, Global Stocks Tightest Since 2013
The WASDE did not provide much bullish fodder on the domestic balance sheets with new crop ending stocks at 1.957 billion bu. However, the global stocks were down 19.4 MMT from last year says Gieseke.

“I think the price trend will continue to push higher here from a world perspective that was the real story yesterday. I think it’s the stocks to use number once again we have to account for demand when we talk about total supplies here on grain moving forward because demand has increased so much on all these commodities with these lower prices. So, I mean a 21.1% world stocks to use number is as tight as it’s been since going back to 2018, which if you remember that’s pre-China finding 60 million metric ton of corn in their stocks,” he explains.

So, stocks are as tight as it’s been since 2013 and the corn market doesn’t have a ton of wiggle room.

Chart Breakout in Corn
Gieseke thinks the market is on the verge of a bull market or a chart breakout as the front month continuation chart shows higher highs for the last two months.

“I just pull up a monthly continuation chart and I just kind of look at that chart structure and say, you know, a monthly close at $5 or higher is probably going to be that next indicator for us, whether we’re stuck in a range. So the range would be, you know, 2024 low. The 2025 low is actually higher than the 24 low. But if we can get that close above $5, that would be a step in the right direction compared to the 2025 high, which was made last February. A close above $5 on front months would kind of set the stage for that next leg higher here,” he adds.

Corn demand has been strong, especially with record exports but what is the catalyst to get old crop corn above $5 with carryout still over 2.0 billion bu.? Would China business be the key or a weather issue?

“Given the time of year that we’re in, it’s without a doubt going to be supply side. You know how the Brazilian crop finishes off here or you know the Western Corn Belt here is very dry. I know this weather system moving in in the next week we’ll we’ll cover the I states pretty good but you got to remember last year’s crop was ultimately pushed higher because of these the Western Corn Belt actually had some very good yields last year. So, if this dry weather persists it’s going to be a supply lead rally,” he says.

E15 Vote in House
The corn market is supported not only by hopes of China business but the possibility of year-round E15 as the House votes on that bill on Wednesday.

However, Gieseke doesn’t see it as a huge market mover. “I think the market, it’s just going to get muted by everything else going on here this week. I’m not anticipating much of a move from it.”

Soybeans Gear up for China Summit
The soybean market has been gearing up for the China summit for several weeks now. The key will be will agriculture be a focus and it looks that way from the leaders traveling with the President.

“Yeah, it was a powerhouse roster that he brought over there, including the Cargill CEO. You know, today’s this week’s meeting as far as it leads to soybeans I’m not anticipating much more. So, I’m more so continue to watch the just the FOB price in Brazil and how it compares to the U.S. and that spread has closed here the kind of tightened up here the last month or so but the trend on both of those prices that continue to be higher. So, to me I think that’s more of a market mover than, you know, today’s or this week’s discussions in China.”

Market Anticipating 25 MMT of Soybeans
Still the market has been gearing up for 25 million metric tons of soybeans to be confirmed by China for this year. So it that isn’t part of the deal will soybeans sell off due to disappointment?

He says, “Only to the extent of Brazilian prices. Brazil is going to continue to be the floor of the market, and we shouldn’t need to be the cheapest soybean in the world. We just need to be competitive with Brazil’s exports. Again, if that spread between U.S. and Brazil stays within 50, 60 cents of each other here during our harvest or if the gap can close, I think we can meet that 25 million metric ton. It’s just way too early to write it off as we won’t.”

July Soybeans Take Out March High?
From a technical standpoint, July beans have not taken out the March highs although November keeps making some new highs for the move here.

Will July make new highs if China confirms any U.S. soybean business? He says,"There’s a gap on old crop beans in the $12.32 area, interday chart. So if we close that, that’d be a good check in the right direction.”

How high could November soybeans climb? “I mean, as far as new crop beans, $12.30 is going to be an area of interest for us to start hedging
some more.”

Soybean Oil Rally Stalling?
The soybean market has also rallied on the back of the soybean oil rally and the 60% increase in the RVO levels for biomass based diesel blending volume.

However, Gieseke says that rally is getting mature. “We’re going to date this back to January when it started to break out. A lot of the commodity indexes actually started to break out in January. Soybean oil was kind of the first of the ag sector or the grain sector to start to break out.Technical projection was just that weekly cup and handle formation that we’ve talked about before. It actually met that target here last week. So we’re actually not anticipating too much of a sell -off here in soybean oil. The rally has been extensive, but we’re really looking at meal kind of taking a little more of a leadership role here going forward for the next few weeks.”

Commodity Index Hits 2.5 Year High
The rally in bean oil has been on the heels of the surge in the diesel fuel heating oil and crude oil markets. Retail diesel prices hit record highs on Wednesday and coincide with inflation figures heating up with both the PPI and CPI rising.

So that continues to bring money into the commodities and grain markets.

He says, “The Bloomberg Commodity Index, we tracked that pretty closely. That took out 2022 highs. We really don’t see it slowing down. Typically, it might slow down, but we don’t see that trend reversing yet. To slow that down, you need something like, again, higher interest rates, unemployment picking up some sort of breaking point.”

Start of a Bull Market in Grains?
So do he anticipate money will continue to come into the grains because of that inflation risk and start a bull market like we saw back in 2020 after COVID?

“Yeah. I mean, I don’t see anything from a technical standpoint or monetary standpoint that says it’s short-lived. For right now, I’m just kind of staying out of the way and along for the ride.”

Wheat Limit Up as USDA Slashes Crop: Corn, Soybeans See Surprises

Tue, 12 May 2026 22:07:23 GMT

Grains ended higher Tuesday with limit up moves in winter wheat, livestock were mostly lower.

Wheat Limit Up as USDA Slashes Production
Both classes of winter wheat ended limit up on the day as USDA shocked the market with their aggressive production cuts in the May WASDE according to Arlan Suderman, chief commodities economist, StoneX.

USDA lowered wheat yield by 5.8 bu. per acre to 47.5 bu. and lowered all wheat production to 1.561 billion bu. which is below last year by 424 million bu. and the smallest crop since 1972.

Total winter wheat production was pegged at 1.048 billion bu. down 25% from 2025 drug down by a 36% cut to the hard red winter wheat crop.

He thinks production could be cut even further in the future. “I think we’ve seen quite a bit of deterioration here over the last couple of weeks. These are May 1 numbers, so we may see a little bit lower number. Industry tour this week should give us a bigger idea on that.”

Plus, his experience is when USDA makes a big jump on its first estimate, that typically means that there could be more moves coming. “Because they tend to be fairly conservative and don’t want to overshoot. They don’t like correcting back the other way.”

Abandonment is the Key
Suderman says the key is the percent abandonment of winter wheat acres.

“Now, the USDA’s abandonment number is pretty close to what we modeled, but how might high diesel prices affect that? Because as diesel prices increase, they increase the cost of running the combine over those acres, raising the break-even level at which you decide, is it worth actually taking the combine into the field? So we may push that abandonment a little bit higher.”

He thinks for Kansas a 17% abandonment rate is pretty reasonable but it may be much higher in Texas and Oklahoma, maybe Colorado than it will be elsewhere.

How High Do Wheat Prices Rally?
Hard red winter wheat made new highs on Tuesday and closed limit up but how high will prices run? Can futures get above $7.50?

Suderman explains, “Well, the interesting thing about wheat is it doesn’t necessarily trade supply and demand fundamentals so much as it trades headlines and emotions. We saw back in 2010 when there were headlines of fires and drought-stricken Russia, and we doubled the price of Chicago wheat in five weeks and then it came collapsing down. We realized, oh, we traded that story. The fundamentals aren’t that tight after all. So you can just run with emotions and the funds can go with it.”

Plus, he says funds can take wheat prices too far in either direction. “If you get a headline out of Iran saying the war is over type of a thing, you could see a collapse of crude oil really suck the air out of these grain and oil seed markets as well.”

Global Wheat Stocks Fall
Global wheat stocks also fell 4.2 MMT to 275 MMT but could those supplies shrink further with the talk of lower production and yield due to higher fertilizer prices and lower use?

“I think some of it comes down to do we actually see reductions in fertilizer application. One of the things we are seeing is a reduction in area because of high fertilizer and fuel prices. As we go into Argentina and Australia in the Southern hemisphere, we’re there in the middle of planting now. It looks like a 5% to 6% reduction in area.”

Corn Ending Stocks Down Slightly
USDA lowered corn production nearly 1 billion bu. to just under 16 billion bu.

New crop ending stocks were estimated at 1.957 billion bu. which is down 185 million bu. from last season and under the psychological 2.0 billion bu. mark. Still it was above trade estimates.

Suderman says his estimate was lower than that, “I was at 1.833 billion bushels. So I do think there’s some downside to this. But regardless, once you slip below 1.5 billion, that’s when the market starts caring, it wouldn’t take much of a yield drop in order to do that with this acreage.
I do think there’s a chance that we could see a little bit more of an acreage shift from corn to soybeans, maybe another million acres or so, helping to bring that down,”

He also thinks exports could get stronger moving ahead unless Brazil’s crop is further increased and cut U.S. exports.

Global Corn Stocks Fall
The bigger bullish factor is the huge draw down in global supplies in the new crop marketing year.

USDA estimates 277.5 MMT carryout for 2026-27 which is down 19.4 MMT from last season and could continue to decline next year.

“I think this is a pattern that we’re going to see more of the next year is drawing down supplies with high fuel, high fertilizer, increased uses for biofuels. The biofuel story, I think, is one that we’re just starting to tell now, going to use more feedstock,” he explains.

Brazil and Argentina Corn Production Hike
The impressive part was global corn stocks fell despite an increase in the Brazilian and Argentine crop by a total of 10 MMT.

Suderman says, “I think the market’s already priced a lot of that in. USDA just hasn’t put it into its balance sheet yet. So you look at Argentina,
USDA was holding down at 52 million metric tons or far too long. Many private estimates are 64 to 65 million metric tons. I think it’s probably closer to 60 million metric tons. USDA is now at 57. We’re at 58. Brazil could go a little bit higher as well.”

He stresses that Brazil is using a lot more corn for ethanol and is increasing its blend from 30% to 32%.

USDA Cuts Soybean Ending Stocks
USDA lowered old crop ending stocks for soybeans down to 340 million bu. with new crop down to 310 million bu. despite 3.5 million more acres.

Suderman says biofuels demand helped to push the crush figure up to 2.730 billion bushels for 2026-27 and there is a possibility that number could go higher.

“The question is going to be exports. As I said, USDA went up on their exports, so 1.603 billion bushels for exports next year, up 100 million bushels.”

He thinks that’s a stretch. “China only buys about 12 million metric tons. I don’t see them buying the 25 million metric tons because A, these numbers show that we don’t have it and they don’t have the room in their reserve for it. As high prices our beans are relative to Brazil beans, that’s where they would go is in their reserve and they don’t have the room for it.”

So, Suderman predicts China will buy soybeans but 12 MMT or less. “How much less is the question.”

China to Buy Corn and Wheat, Not Soybeans?
USDA in the May WASDE pegged China’s soybean stocks nearly steady, but other crops are expected to see draw downs.

“When you look at their wheat stocks at about a 10-year low, their corn stocks at about 13-year low, could we possibly see wheat and corn in the trade deal rather than all the soybeans everybody’s talking about? I think that’s a real possibility. We should learn that in a couple of days.”

If China only buys 12-13 MMT that is half of what they said they would purchase and that would be a disappointment to the market. So could it weigh on prices?

Suderman says, “I think with a strong biofuel program in the end, we would end up with ending stocks similar to where they are now. And I think domestic demand is what’s really going to be driving it. If they didn’t buy anything, then that would be a problem. If they buy 12 million metric tons, I think that keeps us well balanced in here, particularly with fuel prices staying high, the demand for biofuels.”

He doesn’t expect China to buy cotton as part of the deal because they are able to source those needs from Brazil.

Beef may also be off the table as President Trump wants to keep U.S. prices down especially ahead of the mid term elections.

Cattle Market Fears Imports
The cattle market has been down the last couple of sessions on fears of increased beef imports.

President Trump has backed off his executive order to eliminate the tariff rate quotas on beef imports but the market is not convinced.

He says, “A little over a 26% tariff that Brazil has to pay on what it exports to the United States right now. If you wipe that out, that suddenly drops their beef prices well below where we’re at currently here in the United States and would be expected to significantly increase exports to the United States.”

Suderman says President Trump is focused on bringing down food prices and the CPI data Tuesday did not support that goal.

“We once again saw those food prices being a significant significant contributor to inflation and beef is right at the top of the list there. And so he’s trying to do that ahead of the elections. I wouldn’t be surprised if we see that at all,” he says.

Cattle Market Top?
The administration has also announced stepped up efforts on anti-competitive practices with a DOJ investigation of the big four meat packers.

So is that going to top the market like it did back in October of 2025 and cause fund liquidation?

“I’ve been wrong on that so many times this year. I hate to say it again. It certainly does suggest maybe a near-term top. But every time we expect that, we come back to the reality of tight domestic supplies,” he says.

The consumer is still spending, and the data has really been supporting the consumer continuing to spend he says.

” The question is, is how much we are effectively able to increase the supply with those increased imports. We’re already importing record levels. What’s our capacity for further adding to that? Because it looks like the consumer’s going to continue to buy if we can. significantly increases imports. Then we can see those beef prices come down and we start to see the reduction then in the prices for the live cattle.”

The key is cash and after record prices last week for cattle the packers are already paying $260 and $400 already this week.