Crude Oil

Grains See Profit Taking on Doubts on China Deal, Crude Oil Collapse

Wed, 20 May 2026 22:44:59 GMT

Grain and livestock futures were lower on Wednesday except for feeder cattle.

Grains and Cotton Futures Fall as China Denies Purchase Amounts
Grain and cotton markets saw profit taking and speculative selling on Wednesday after China’s Commerce Ministry denied the the $17 billion of agricultural purchase amounts released in a White House fact sheet on Sunday.

Mark Schultz with Northstar Commodity says the market was skeptical about the lack of specifics in the framework before China denied the purchase amounts.

He says that likely triggered some speculative long liquidation. “I think the other part of it is it’s now day number three since we’ve had the announcement that they were going to do some more business with the U.S. And we have yet to see any type of purchases being made of any sort being announced. Maybe the trade looked around and said, we’ve got three days. We got a lot of length in this market. No confirmation.”

Why Would China Confirm the Deal?
Why would China top their hand and confirm what they were going to buy? That would just make prices go up and make U.S. ag products more expensive for them to buy.

Schultz says, “I would hold that card closer to my chest all the way along as well. I would not relinquish what we agreed to. If the U.S. wants to tell what we did, fine. But I don’t need to make that as a forecast of what we did as well.

So will the purchases start showing up as flash sales or quietly under the radar in the weekly export sales?

“Well, you could see that happen, but I would say right now the trades probably wants to see something being announced. And if you go back, I mean, we haven’t, other than 150,000 metric tons of meal to Italy in the last two weeks, we haven’t seen anything in the daily reporting service of any kind from any country. So all of a sudden our export business has just shut down quietly,” he says.

He attributes that to the high energy prices making shipping more expensive.

Crude Oil Collapse Also Pressures Market
The crude oil market also collapsed later in the day with President Trump sounding once again like a peace deal with Iran may be close at hand.

He says, “Today, with the energy dropping 20, 22 cents on gas and diesel and crude down $6 a barrel, I mean, it just also cast a little bit more of a negative tone across the board.”

Will Funds Liquidate More?
So if there is a peace deal in Iran and energy prices fall and China sales don’t start to materialize soon will the funds liquidate? They currently old a near record long position in the grain complex combined.

“Well, they could,” Schultz speculates, “I thought last week’s technical action for the corn and the beans did cast a negative tone. Now, we’re still some eight to nine cents higher than we were last Friday on the corn, December corn from the close.”

He says soybeans have had a longer rally. “The soybean market has made a pretty good push. I think it’s 17 or 18 weeks. We put the bottom in on this January 12th report. We’ve been going up every since. I think we only closed lower three or four times during that. 17 to 18 weeks and barely had a correction of 20 cents was the biggest correction we saw. So I just think that market’s been, if you look at it on a weekly basis, it looks like it’s just been another market straight up on here. So I just think when you get up to this level and the funds have this much length into the market, you have to keep having friendly to bullish news almost on a daily basis to sustain the rally.”

Weather and Fast Planting
Also adding some pressure is the fast U.S. planting pace at 76% on corn and 63% on soybeans, which is ahead of average.

While there are some problem areas, the weather forecast is non-threatening.

“Yeah, it’s getting favorable because most of this crop is now going to be in the ground. It looks like the heavy rains are going to track further South into the Delta and the Ohio River Valley. Now, that’s an area that probably would entertain having more moisture because they’re still pretty dry underneath. And there, too, the crop is much further along than it is up in the upper Midwest. So they can handle the water. They need more of the water,” he explains.

The upper Midwest would like to see more warmer, drier conditions, at least for the short term and Schultz says that is what they’re going to get.

“It was affecting maybe up to 40% to 50% of the safinha corn. That has been narrowed down to maybe 20%. But the rest of it has got picked up enough moisture that I think it offsets whatever that 20% is going to lose on yield,” he adds.

Problem Areas
There are a few problem areas that have had too much rain in the Eastern Corn Belt and there is even some frost damage in the North that will force replant.

However, he thinks that is a small percentage of the crop.

Wheat Crop Still Shrinking?
The one exception may be the hard red winter wheat crop which saw the worst crop ratings this week since 1989.

Still, much of that may be factored into prices he says because there isn’t much of a problem elsewhere in the world.

“Now, how that changes is if by chance, all of a sudden, the Chinese or somebody else comes in and starts buying U.S. wheat. We’re the most expensive wheat in the world, so that’s going to be a little bit tough to do. But if there is some type of a purchase, then I can see where that becomes a bigger issue,” he says.

He is also watching for disease and quality problems in the soft red winter wheat crop where they have had excessive rains. “Better chance of quality issues going into feed quality wheat,” he says.

Plus he’s watching the spring wheat in Canada and the Dakotas for dryness that could start to curb yield

Live Cattle See Pressure
Feeder cattle futures rebounded to close higher with the lower corn market. However, the live cattle futures closed lower.

The headline of the lockout at the Fort Morgan, CO beef plant may have triggered some early fund selling. However, the plant has been dark for nearly a month without a market reaction.

He says, “Well, it didn’t care, and it certainly hasn’t cared about a shortage or a plant being shut down because the rest of the packers were still out and bidding up last week for cattle.”

Cash Trade Improves Wednesday
Last week cattle traded at record levels but some early week sales were steady to lower. “I heard a few cattle going yesterday in Nebraska, $264, maybe a buck lower, steady to a buck lower. The bid’s out yesterday at $260, not much for takers.”

So by Wednesday cash improved to $264 to $265 live in the North and $415, which pulled cattle off their lows.

Futures are trading at a huge discount to the cash, which is not uncommon, but that will narrow closer to June 5 or June 6.

Cattle on Feed Coming with Bearish Expectations
The market was also positioning ahead of the USDA Cattle on Feed Report on Friday with expectations for larger on feed numbers and placements compared to a year ago when the border was closed to Mexican cattle.

“That is correct. So it is finally crisscrossed over and we should start seeing where the placements start to get a little bit larger, on feed starts to
get a little bit more,” he says.

Improved Beef Demand
The key for him is when demand will start to get better, especially with China relisting 425 U.S. beef plants.

“They basically shut the exports down and we’re only doing about 1.5 million pounds of muscle meat per month going out to China where
they were up as much as 18 and 20 million pounds. So that’s dropped off,” he says.

Increased Beef Imports?
On the flip side of that the market is seeing increased imports from Argentina, Brazil, and even Mexico has now stepped up on the imports
of beef.

Mexican officials say they are going to double beef exports to the U.S. in 2027 because they are feeding more cattle in their country and shipping the meat to the U.S.

“If we shut down the border and we don’t bring the cattle in, it’s not like the cattle died. They are still going to be fed. They’re just going to be fed down in Mexico. And yeah, if the Mexicans aren’t going to eat that much beef, eventually they’re just going to bring the finished product back to the United States,” he says.

Lean Hogs Hit New Lows....Again
Lean hog futures were lower again and seeing some new lows for the move in the June contract.

Is a bottom in sight?

Schultz says, “We haven’t brought the cash market or the pork cutout, for that matter. In seven months, we have been sitting here and doing nothing. It just chops in a sideways pattern. The hog slaughter has finally slipped for at least two of the last three weeks. You better start seeing less numbers.”

He says when the numbers start to drop the pork cutout should respond. “But that is not happening yet as globally, the world is still awash in pork. And obviously, we need something on demand. And thus far, it appears, though, we don’t have that demand showing up.”

Plus, he says consumers only buy pork if it’s cheap because they still have an appetite for beef.

China's Failure to Acknowledge $17 Billion Trade Deal, Weather and Lower Crude Oil Pressure Grains

Wed, 20 May 2026 15:54:58 GMT

Corn and soybeans saw early pressure with doubts about the trade deal with China casting a shadow over prices.

In a statement Wednesday, China’s Ministry of Commerce confirmed there had been a “guiding target” set between the two countries with the goal of “expanding two-way agricultural trade,” but made no mention of the U.S. government’s claimed $17 billion number for U.S. ag product purchases from China.

Meanwhile, China has indicated it would accept some increase in U.S. tariffs to a level agreed upon last year and would continue talks to extend a trade truce. The Commerce Ministry in Beijing said trade teams from both countries would discuss extending the one-year agreement worked out at negotiations in Kuala Lumpur, said a Bloomberg report.

Darin Newsom, senior market analyst with Barchart, says the market was already doubting the deal yesterday, wanting to see proof of sales.

However, China is unlikely to tip its hand with purchases this early, he says, because they don’t want prices to rally and make U.S. commodities more expensive for them to buy.

China Hold Off or Not Fulfill the Deal?
China may be holding off for cheaper prices at harvest, or Newsom says they may make smaller purchases that won’t show up on the daily reporting and instead accumulate in the weekly purchases.

He is doubtful China will uphold the deal anyway based on their past actions.

The other key to when and if China makes purchases of U.S. goods, especially soybeans, will be what happens with weather and Brazil’s crop.

He thinks China may wait to see if Brazil gets their new crops planted and if the fear of a Super El Niño trimming yields will push them to have to buy U.S. products.

Weather, Fast Planting
Newsom also thinks the fast planting pace and no major threats to U.S. production area are also pressuring the grain markets.

In the case of corn and soybeans, there are some spots of the eastern Corn Belt that are too wet for planting, and some of the western Corn Belt is still too dry. However, he thinks overall the crop is in good shape, which is also causing some fund liquidation.

Lower Crude Oil
An additional factor weighing on the grain markets is lower crude oil prices.

There is some profit-taking in the crude oil market despite no resolution in the Iran war and that is spilling over into the corn, soybean and bean oil markets.

Wheat the Exception
The wheat market saw some early strength with recent rains missing some of the driest areas of the hard red winter wheat belt. However, there are more chances in the extended forecast.

Plus, wheat is getting pulled down with corn and soybeans and crude oil.

While the HRW crop may be getting smaller, Newsom says there is still no shortage of wheat in the world.

Bond Market Shows Inflationary Fear
The one part of the marketplace that is showing inflation fear tied to high energy prices is the bond or Treasury market.

Newsom says the 30-year Treasury bond hit 5.165% and is at a 19-year high.

This is driving up long-term interest rates and the cost to borrow money for everyone, including farmers.

This could eventually spill over to curb consumer demand for beef as they see credit card interest rates rise. That could hurt the cattle market even though all the other supply fundamentals remain extremely bullish.

Corn, Soybeans Hold Support as Oil Recovers: Cattle Fall Despite Record Cash

Thu, 07 May 2026 21:56:17 GMT

Grain and livestock futures ended mostly lower on Thursday except back month hog futures.

Grains Follow Crude Oil, War Headlines
Grain markets were lower on Thursday still tied to the trend of the crude oil futures and Iran war headlines says Jeff Hoogendoorn with Professional Ag Marketing.

“You know, we had crude starting the day out significantly lower, putting those lows in fairly early in the session, and grains did very much the same thing,” he says.

He says up until this week the grain markets seemed like they were trying to divorce from the energy sector and trade their own fundamentals but that isn’t the case the last few days.

“I think today was the best example as it traded both on the lows of the day with the crude and on the highs of the day,” he explains.

Corn and Soybeans End Off Lows
So, crude oil started sharply lower Thursday with the continued news of peace talks with Iran and possibility of getting the Strait of Hormuz open, pulling down grain markets.

However, crude oil stabilized as the day progressed following Iran rejecting the terms for a long-term cease fire and reopening of the Strait of Hormuz.

That reversal in the crude oil market helped to support late day buying in corn and soybeans, even bean oil.

Corn and Soybeans Hold Support
Corn and soybeans also bounced as they held key chart support and bounced off that level.

“We got underneath the moving average that we’re watching kind of mid-day like on the December corn in that $4.85 area. So we definitely had a lower low than that, but the closes kind of saved the day on the charts,” he says.

He says it was a victory for corn to close just a 1/2 cent lower versus at the low end of the trading range today.

“Something to be watching for tomorrow, though. I mean, we’ve kind of put a few days in a row now, some lower highs and some lower lows and busting through some of the moving averages and retracements. So that’ll be a big number tomorrow.”

Will Funds Defend Longs?
The funds had piled into the corn market the last week or so buying over 83,000 contract last week alone and were record long in soybean oil. So will they defend those long positions if crude oil goes down or wait to see if inflation concerns subside?

“I think they can stay in these markets for a little bit longer in the corn. But they can put a lot more contracts on the books too. From a historical standpoint it’s still early in the season for them to be completely exiting. I don’t think that needs to happen today. I think we’ve got a a month to two months left from a seasonality standpoint and then they could shed some positions,” he adds.

Plus, he thinks the inflationary concerns are far from over because it will take a while to get the Strait of Hormuz open and normalized and the managed money traders realize that.

Favorable Planting Weather
The USDA crop progress report has shown planting progress ahead of average which has also weighed on the markets.

While there have been some areas that have struggled with cold and/or wet conditions slowing planting that is starting to change.

Much of the Corn Belt is seeing some more favorable weather and the extended forecast is also conducive for planting which should result in bearish planting figures for corn and soybeans on Mondday.

“It looks to us like most everybody’s getting a window. There’s some spots out into Indiana and into Ohio that we’re a little concerned about yet, Michelle, as far as planting pace goes. But, you know, that eastern Iowa into Illinois looks like we’re going to be in pretty good shape and getting a nice window in a lot of spots.”

Weekly Exports
Weekly exports on Thursday morning were below last week for corn at 53.6 million bu. but still solid for this time of year. Plus, total exports are up 29% from a year ago.

Soybeans were only 5.2 million bu. for old crop which is a marketing low and cumulative exports are down 23% from last year which is disappointing according to Hoogendoorn.

“I think the marketplace is kind of anticipating some of that. We’re not really riding a huge wave higher as far as especially old crop soybean sales go. So I believe some of that’s priced in. We know we’re going to be lower on exports as this year kind of gets to the back half of the year, right, as far as old crop sales go. New crop is hopefully a different story. I think we’ll get a month or so down the road and we’ll start to focus on that which is why we didn’t take that news harder,” he says.

Soybeans Await China Meeting
Also holding the soybean market together is ideas that China could announce soybean purchases at the Summit next week and so it may build those premium back into heading into the meeting. Is this market building those premiums in? T

“Yes, there’s probably some optimism built in there. However, a lot of these type of meetings have been disappointing. Right. So. let’s be a little careful there if we’re truly putting some premium into the market going into into that meeting let’s approach that thing with some caution. Hopefully it’s not warranted but our history would suggest that gets a little disappointing on the actual action items,” he adds.

Wheat Story Over?
The wheat market did not recover off the lows with crude oil and was down sharply especially in hard red winter wheat contracts.

The market is continuing to remove weather premium with some rains or moisture received in dry HRW areas in Colorado and Western Kansas. Plus the frost concerns have not materialized as advertised.

So, Hoogendoorn says the wheat production concerns are starting to fade.

“Well, talk about an impressive story about buy the rumor and sell the fact, right? I mean, this crop has got a lot of issues as far as the hard red winter wheat. So it’s so impressive that we rallied before that news kind of came out, if you will, or before it was official through the USDA. Now we’re getting a lot of that information coming out on the table, but we’re taking a good 60 cents off that wheat market in the meantime. So yes, that’s very much what’s going on. That wheat story has got some age to it,” he states.

The market didn’t even react to the Oklahoma wheat tour results which pegged the crop at only 47.8 million bushels, which was well below the 106.4 million bu. figure from last year.

And while some areas missed frost there are more freezing temperatures in the forecast for this weekend, which have failed to support the market.

Cattle Lower Despite Higher Cash
Cattle futures ended off session lows but were lower on the day.

Early pressure came from lower boxed beef prices, the lower stock market and concerns that a planned meeting between President Trump and Brazil’s president may result in increased beef imports coming into the U.S. to provide some price relief to beef for consumers.

The funds sold early on the headline says Hoogendoorn.

“They wanted to take risk off on this cattle market in a big way today. We’re hearing more rumors of some discussions going on with Brazil.
We’ll see if anything comes out of that in the next 24 to 48 hours. Be watchful and mindful of that type of discussion. Not sure if that’s what spooked it or if it was something else,” he adds.

He adds the only reason cattle ended off their lows was the higher cash market. He says it started out steady but continued to build momentum.

Southern cash trade was reported at $256 to $258, up $2 to $3. Northern trade live ranged from $258 to $260 live with $402 dressed prices, up $3.

Hog Futures End Mixed
Lean hog futures ended mixed with pressure in the front end of the board on continued ample supplies and bear spreading.

He says, “The market’s been trying really hard to justify having these summer futures markets at a premium to the nearby fundamentals, right? And as time passes and we run on a pretty large lack of any good news on the fundamental standpoint, they struggle to justify that premium. That’s exactly the way the market was trading today. That’s the way it’s been trading. Today they did it in the spread market, which, you know, as producers, we have to be pretty thankful for, right? Like we’re able to sell the front end and at least we’re buying the back end was actually able to post some closes that look pretty attractive there, you know, August on back type of a thing.”

But he thinks the market is on the edge of improving with few numbers in the pipeline.

Export Restrictions Due to Pseudorabies
The other good news is so far the only export restrictions tied to pseudorabies remerging after 20 years is Mexico, but that is limited.

“We’ve got the Mexico saying that they’re not interested in our varieties meats anymore. I think that’s a real thing and gonna be in place for a for a while. I don’t know if that’s something that will drag on all summer and into the fall or not mostly a reduction in revenue for the packers. I don’t think it’s going to have a huge impact,” he says.

Still the market has been on edge awaiting those type of announcements and if there are more he thinks they will be traded negatively.

“So the two things to watch, are there more positive cases and if any more news as far as countries restricting exports for sure,” he adds.

Grains Slide Further With Oil as Funds Sell: Where Do the Markets Find Support?

Thu, 07 May 2026 16:23:56 GMT

Grain and livestock futures were all lower to start Thursday.

Grains Continue to Slide with Crude Oil
Grain markets are continuing to slide lower with the falling crude oil market and the idea the Iran war may be ending soon.

However, Darin Newsom, senior market analyst for Barchart, says he thinks the odds of a peace accord with Iran and reopening the Strait of Hormuz are between slim and none.

So while the funds are liquidating positions in the grains to shed some risk, it may not last.

“It makes for nice headlines and as we’ve talked about before these markets are all driven by headlines. The reality is the war isn’t somehow mysteriously all over or miraculously completely over. I’m sure there’s still missiles firing. I’m sure there’s still bombs going off. And so what we’ll find out most likely over the weekend, because that’s when these things tend to happen, is that there is no peace, that there is no ceasefire,” he explains.

So he says the markets will need to adjust again coming out of this weekend.

How Far Could Crude Oil and Grains Fall?
Currently the crude oil market is buying into the peace talks and grains futures are falling as a result, especially corn and bean oil which are biofuels derivatives.

So how much lower will prices fall before finding chart support especially as many contracts are nearing some key technical levels?

Newsom says, “We’ve seen so much buying coming into the commodity sector we’ve had these predictive market sites promoting the fact that they’re better gamblers quote unquote investors, can trade commodities basically without regulation by CFTC. And so they’ve been hustling. They’ve been baiting folks and getting people into the markets.”

However, now these speculative traders are getting out.

“So, there’s no real magic level that these markets come down to. What they’re going to have to do is come back to where there is some intrinsic value support, some fundamental support. And as we see, basically across the board in the grain sector is that basis is weak. So the
intrinsic value is weak in relation to where these futures markets have gone. That leaves a lot of room for liquidation. It leaves a lot of room for these markets to come down,” he adds.

He thinks there will be some buying coming out of the weekend in the energy sector which will support soybean oil and soybeans, maybe even corn.

Buying Resume Ahead of China Summit?
Still, once the dust settles the focus will turn towards next week’s meeting with China and the possibility of soybean and other ag purchases.

President Trump’s social media posts have been optimistic regarding the meeting and Newsom says painting a picture about the strong relationship between the two countries and how it will lead to increased China demand for agriculture goods, which has driven some buying in the grains and especially soybeans.

Newsom is skeptical about a meaningful and transparent deal or one that focuses on agriculture. However, he thinks the market will buy into the meeting on those hopes.

“Yes, I would expect the grains sector, for those two reasons, to rally next week. Is there going to be anything really come out of this? No. There’s going to be talk of computer chips, and there’s going to be this and that. But as far as U.S. ag is concerned, nothing’s going to change,” he adds.

China News Priced Into Soybeans?
The other concern is that soybeans have already had a rally on hopes for that additional demand as they are nearly $2 higher than a year ago. That means the market could fade any deal with China.

However, Newsom says some of that premium has come from the soybean oil market and biofuels demand which isn’t going away.

“A lot of what’s happened in the soybean market has to do with soybean oil. Again, if we look at bean oil, we know that the funds have gone to a record large long and record large net long futures position here of late. So that’s really been what’s been pulling soybeans higher,” he says.

Soybean Oil Priced in Processing Demand?
Soybean processing demand has been stout due to record crush margins tied to the new RVO blending levels into biofuels and that has helped drive the soybean oil market into new highs.

“That isn’t necessarily going away,” he points out.

However, crude oil and heating oil or diesel fuel prices have also driven the rally and if they cool will it also mean a top is in the bean oil market?

“To me, we’ve most likely built in the bulk of this explosion in demand. And we can attach a bit of an asterisk from the biofuels standpoint,” he adds.

Additionally, diesel fuel prices are likely to stay elevated even if crude oil prices fall due to record tight inventory. So if diesel prices stay high, that should support bean oil prices.

“We just ran a study showing just the one-month correlation is up near 100%. And I know correlation does not prove causation but anytime you get 94%, 95%, it raises an eyebrow, and there’s been a tight correlation between the two markets. That has brought funds into the market,” he says.

Export Demand
Biofuels and record soybean crush are making up for some of the lost exports this year to China. While it is normal seasonally for soybean exports to cool, weekly exports were a marketing year low of 5.2 million bu. and to date soybean sales are down 23% from last year.

Corn exports were at 53.6 million bu. which were strong while wheat exports at 2.9 million bu. were also week.

Corn exports to date were up 29% from a year ago.

“But what we’re seeing is if we take those total shipments and we project them out based on the average of what we normally have shipped this point of year, that pace projection for corn continues to come down. The trend since basically last fall has been for that pace projection to come down. You know, yes, we still have solid demand. Yes. You know, it’s still going to come in above last year’s reported shipments by the time we get to the end of the marketing year.”

So the market has already built in the most bullish scenario for U.S. corn export demand.

“And at this point, you know. the future spreads and basis are still weak. You know, so if we look at national average basis, it’s still running at or below the previous 10-year low weekly closes. So, I mean, so it just tells us that supplies are still adequate. Available supplies are still adequate to meet demand,” he adds.

Wheat Rally Over?
The wheat market was the first to climb to two-year highs in the winter wheat contracts, but has had a big correction removing war and weather premium.

So is the lower production of HRW wheat factored in already? Newsom thinks so.

“The reality is that the hard red winter crop has been hurt. We know that. I’ve talked to folks from the Southern Plains. The 2026 crop has been hurt. Again, if we look at new crop future spreads, they’re still covering a neutral, at best, level of calculated full commercial carry. So the commercial side of the market was saying, look. We may have smaller production this year, but it’s not going, at least right now, it’s not that dramatic. It’s not going to change the supply and demand situation all that much. Plus, you know, basis versus the July and September futures contracts is incredibly weak at this point, heading into harvest, you know, across the far Southern plains.”

A few weeks ago the speculators were also buying wheat on headlines, so there was money flowing into the complex, even SRW wheat.

“So this money flow, particularly in the Chicago market, that’s the more heavily traded futures market, was coming into wheat for no reason whatsoever. I mean, we’ve got Chicago, we’ve got soft red winter spreads covering 90% plus calculated full commercial carry. That’s not bullish. That’s not fundamentally bullish. Yet the money was pouring in. And so that money’s probably starting to come back out. And so regardless of how much damage has been done to the hard red winter crop, if we continue to see selling coming into the soft red winter crop, it’s going to spill over into hard red winter, particularly as harvest starts rolling along,” he explains.

Oklahoma Wheat Crop Cut
That may be why the market did not react to the results of the Oklahoma crop tour. The crop was only 47.8 million bushels versus 106.4 last
year.

He says, “The market didn’t care about it.”

Cattle Fall, But Beef Demand Is Not
Cattle futures were lower on Thursday with the rest of the complex despite some light cash trade so far this week at higher money.

The market is seeing some profit taking but there is no evidence of consumer demand rationing yet on beef according to Newsom, even with higher gas prices. At least not yet.

“You know, the choice has to be made between fuel or high priced beef. And so, you know, yes, we’ve seen gasoline crumble this week. But again, I don’t think it’s permanent. So I think there is some concern. There’s still some concern in the cattle industry and the beef, that these prices just simply aren’t sustainable, that at some point U.S. consumers are going to have to make that choice. They’re going to have to
make the choice to pay more for gasoline and less for beef. And we haven’t really seen it yet. I’ve been anticipating, I’ve been looking for it, for this change to less expensive proteins, but we just aren’t seeing those signs yet. So it’s been resilient, but I still think it’s coming,” he says.

Diesel Prices Are Breaking Records Across Multiple States, And Relief May Not Come in 2026

Wed, 06 May 2026 12:53:35 GMT

On Tuesday, President Trump stated that high gasoline prices are a “very small price to pay” for the ongoing war with Iran, arguing they are necessary to prevent Iran from obtaining a nuclear weapon. He predicted prices will “come crashing down” once the war ends. But for farmers and ranchers, diesel prices have risen more than gas, putting a further strain on already high input costs for 2026.

Trump on Oil Prices:

I looked today, it's like at 102 and that's a very small price to pay pic.twitter.com/2V8LC93wFj
— Acyn (@Acyn) May 5, 2026

To start the week, diesel prices went on another run with the national average diesel price is just 20 cents away from reaching a new all-time high. And across the country, a growing number of states aren’t waiting to get there. About six states are already seeing the national average price of diesel reach record highs.

From the Great Lakes to the West Coast, roughly a half dozen states have already smashed previous records, as a late-April dip in prices quickly faded and a fresh surge took hold.

“Diesel now averaging about $5.65 a gallon nationally. That is only about 20 cents away from a new all-time record high,” says Patrick De Haan, head of petroleum analysis at GasBuddy . “So even though we had that short-lived break, we’re right back knocking on the door of records again.”

That “break” didn’t last long. De Haan says even though diesel prices saw a bit of a respite for April, with even prices starting to trend down in mid-April, those prices re-accelerated in the last week.

New records for diesel in:
Michigan, $6.01
Illinois, $6.01
Wisconsin $5.67
(Indiana 0.2c/gal away), $6.03
(Ohio ~19c/gal away), $5.93 https://t.co/DV0387vvMR
— Patrick De Haan (@GasBuddyGuy) May 5, 2026

Now, the rally is showing up in state-by-state records, especially in the Midwest.

“Looking at it state by state, Great Lakes states have seen some tremendous refining issues that have really caused prices to rise dramatically,” he says. “Michigan has now set a new all-time record high for diesel over $6. Indiana is just a few tenths of a penny away from setting a new all-time record. Illinois has set a new all-time record. Wisconsin has set a new all-time record.”

And it’s not just a regional story. States in the West were some of the first to not just see the highest prices, but now also hit record levels.

“Out on the West Coast, Arizona set a record a couple of weeks ago, and Washington state is at an all-time record,” he adds. “So there are probably about a half dozen or so states that have set new all-time records, and again, the national average itself is just 20 cents away.”

Perhaps the most telling shift, though, is there’s no longer a low-price refuge.

“No states any longer have diesel averaging below $5 a gallon,” De Haan says. “Texas was the last holdout, and it now is above $5 per gallon. So across the board, $5 diesel is now essentially the floor, and in some areas, that’s actually the cheaper end of the spectrum.”

At the high end, prices are reaching extremes with California’s average diesel price now surpassing $8 per gallon.

Global Tensions Cloud Relief Outlook

With prices continuing to climb, farmers are looking for relief. What would it take to reverse course? That answer remains tied to global uncertainty.

“Relief may be a little bit elusive,” De Haan admits. “It really just depends on the daily developments in the situation between the U.S. and Iran—whether the Strait is open or not, or whether we’re in phases of escalation.”

The Strait of Hormuz remains a critical chokepoint for global energy supply, moving roughly 20 million barrels of oil per day.

“Nothing else matters to the oil market more than this waterway,” he emphasizes. “We’ve seen attacks that have pushed oil prices higher, which in turn pushes diesel wholesale prices up. You may get a little bit of day-to-day relief, but there really is no ‘coast is clear’ until there’s some sort of definitive resolution.”

And even then, he says a turnaround won’t happen overnight.

“If there is a definitive signal to the market, if the Strait reopens and both sides are aligned, prices could start falling within 48 hours,” De Haan explained. “But the rate of decline is likely to slow after that initial drop.”

Prices Likely to Remain Elevated Through 2026

Not only is the rate of decline projected to be slow, but De Haan says diesel prices aren’t likely to drop back to pre-war levels by the end of the year.

“Roughly half of the increase we’ve seen over the last couple of months could come down within the first few months of positive news,” he said. “But the other half could take many more months. We may not get back to pre-conflict diesel prices until late this year—or even into 2027.”

For agriculture, that prolonged stretch of elevated prices carries real consequences.

“When you look at what comes out of a barrel of oil, diesel only makes up about 25%,” De Haan explained. “Gasoline is a larger portion, so it’s been less impacted. Jet fuel, which is an even smaller share, has been hit the hardest. So it’s almost inverse to how much is produced.”

Why Diesel Is Climbing Faster Than Gasoline

If it feels like diesel prices are rising faster and hitting harder than gasoline, there’s a reason rooted in how a barrel of oil gets used.

“Diesel has seen more of the sticker shock compared to gasoline,” says De Haan. “And a lot of that comes down to what comes out of a barrel of oil.”

Not all fuels are created equally in supply. Gasoline makes up the largest share of a refined barrel, while diesel represents a smaller slice, making it more vulnerable when supply is disrupted.

“Gasoline is the top product flowing out of a barrel of oil, so it’s been the least impacted,” De Haan explains. “Diesel, on the other hand, only accounts for about 25% of a barrel, so it’s been more impacted when there are supply issues.”

That imbalance becomes even clearer when looking across the full spectrum of refined fuels.

“The most significant impact has actually been to jet fuel, which is only about 9% of a barrel,” he adds. “So if you look at it inversely—the smaller the share of the barrel, the bigger the impact we’re seeing right now.”

For agriculture, that dynamic matters more than most sectors.

Diesel isn’t optional on the farm. It’s essential. From planting to harvest, it powers tractors, trucks and the supply chain that moves commodities across the country.

“Diesel is the fuel that drives agriculture,” De Haan say. “And that’s why these price increases are so impactful, not just at the pump, but all the way through the economy.”

And while prices are already elevated, the full effect is still working its way downstream.

“Consumers really haven’t even seen the full onset of some of these higher prices yet,” he adds. “That’s going to continue to trickle through in the weeks ahead.”

Demand Holding...for Now

Even with these high prices, so far, demand hasn’t shown many signs of slowing.

“We have not seen much meaningful decrease in demand yet,” De Haan says. “We’ve seen very little, if any, diesel demand destruction so far, which tells you the economy is essentially preparing to pay these prices because it still needs the fuel.”

But there are warning signs ahead.

“If diesel nationally hits $6 a gallon, that’s likely when we start to see consumption slow,” he says. “For gasoline, that number is about $5 a gallon. We’re getting very close to those thresholds.”

Until then, the pressure continues to mount. And for farmers heading deeper into the growing season, that pressure is becoming harder to ignore.

Grains End Higher as Funds Buy on Inflation Concerns: Cattle, Hogs Lower

Fri, 01 May 2026 21:39:09 GMT

Grains ended higher on Friday with livestock lower.

Soybeans Rally with Bean Oil
Soybeans were higher on Friday following bean oil which made new contract highs and hit levels not seen since June of 2022.

Jim McCormick of AgMarket.Net says the bean oil market has been seeing strong U.S. and global demand with various countries announcing biodiesel mandates.

“Soybean oil has been the lead driver for the bean complex. Years ago, meal was the driver for beans. It’s now the oil due to the biodiesel.
That definitely is helping it,” he says.

Frost and Cold Weather
Soybeans may have also been adding risk premium due to frost concerns.

Some areas of the Corn Belt already saw freezing temperatures and are facing replant and there is another push of cold weather coming in the next few of days.

He says, “Another cold shot this weekend and there is worry about some replant going on. Parts of the country earlier this week also had some very, very heavy rains. We are hearing parts of Southern Indiana, Illinois might have to replant as well,” he says.

New Month, New Money in the Grains on Inflationary Buying
McCormick says a new month also brought in new money on inflation concerns.

“You know, as long as you have the problems in the Middle East going on, you’re going to have people wanting to buy commodities on the energy inflation hedge. And then the other story line you’re going to continue to hear is about the food inflation risk due to the fact of not getting fertilizer there. There’s fear there will be a shortage in the Southern hemisphere growing season. That is attracting spec money into the markets as well,” he adds.

He says there are plenty of investors that made money on the last round of inflation that started in 2020 and hit its height in 2022.

“Coming out of COVID, they made a lot of money trading that inflation story. So some of that money, I believe, is coming into the market. And that is what’s supporting the corn market,” he says.

The record high diesel fuel prices are also driving up inflation McCormick warns.

“Remember, everything is used, you know. for you know in energy to get that product to where we need it so you know you’re you know and then so much of the packaging is derived from products made from energy from crude. So you know that has got a lot of the just inspect investor money saying I want to own an asset that could make me money if we come back into inflationary times. We got some inflationary readings this week shows that the inflation is going the wrong way compared to what the Fed wants. It’s starting to creep back up and that tends to attract money near term.”

Bean Oil Follows Crude Oil
How much higher can soybean oil go if crude oil stays above $100? Is that the key here for keeping the funds interested in that market or not?

He says, “I think that’s one of the major keys. I mean, the fact is as crude oil continues to go higher, as the Strait stays shut, that probably is going to be supportive.”

The caveat is competition from other lower priced veg oils he explains. “What we’re finally starting to see is we saw the story six months, a year ago, where we were bringing a lot of used cooking oil in from China and going into our renewable diesel plants. Well, we’re starting to hear reports that that is happening again. So what it’s showing you is the price of bean oil domestically has gotten so competitively priced, so high priced, I should say, that you can now import it. That will tend to ration. the demand for the product a little bit, and that might at least at a minimum, slow the upward momentum.”

Worst case, he says it could force the top in the market.

Soybean Chart Breakout
Soybeans had a strong technical day with July closing above $12 and the November contract making a new contract high.

November soybeans could go higher but it depends on if the funds want to add to their long position.

“I would argue, the market isn’t trading your typical grain fundamentals. You’re trading macro fundamentals of the Middle East. And you’re trading, like I mentioned, the inflationary aspect of it. That can carry the market a lot further than economically it really makes sense. So really, the money flow is going to be the key to how far this market can be carried higher,” he says.

Although the July contract closed above $12 he says that contract is still range bound.

“It is still sideways. It’s taken out the near-term range. It has not taken out the high, I believe that was spike made the past fall when the Trump administration announced the China trade deal.”

China Meeting Key
He says that is the key for the market is if the China meeting happens in mid-May and is not delayed again.

“If talks with President Trump and Xi are still on, and President Trump is anticipated to make his way over to China here in the next couple of weeks you’re probably going to hear more rhetoric potentially about what China may do. I do not believe there are going to be a big buyer of old crop beans. They did in that first agreement back in the fall talk about buying 25 million metric tons of new crop beans. We’ll see if they can lock that down and get a hard commitment,” he explains.

If that deal doesn’t happen the soybean market could fall apart.

“We know I think the last time we go around when we had to postpone the meeting, the market did sell off a little bit. And there is a lot of uncertainty to it. Like I said, President Trump sounds like he wants to go. But, you know, we’ll see, you know, with the war going on in the
Middle East, I think all, you know, we probably, you know, this thing could fall apart at the last minute,” he adds.

Corn Makes New Highs for the Move
July corn made new highs for the move while December again was capped by the $5 mark.

McCormick says the funds are buying corn because of inflation concerns and the fertilizer issues.

“There’s no doubt about it I mean part of it is you are seeing some buying I think definitely on the fertilizer plate now most people agree that the fertilizer in the U.S. is expensive but there is no shortage. We’re pricing on a world market and if our prices are too cheap somebody from the rest of the world will come in and buy it and ship it back there but it’s here,” he says.

The world is worried if the Strait isn’t reopened there is going to be a shortage for fall needs and South American needs.

He adds another thing attracting investor money is the ethanol grind and the price of ethanol compared to gasoline, which is much cheaper.

$5 December Corn?
So it may be just a matter of time here before December takes out the $5 level but how far can it run before farmer selling caps the rally?

He says, Well, it’s a situation where we saw a lot of farmers selling here this week as the market tried to push into that $5 level. And then I would argue as we get through that $5 level, you’re probably going to hear a backoff of selling. And then you get back up, I believe you had the contract high, I believe was right around $5.12. That’ll be the next level resistance. I mean, now the question is where are farmers going to be comfortable selling versus the speculators that want to own it?”

Six weeks ago he says farmers would have jumped at $5 corn but now there is hesitancy tied to weather and fertilizer concerns.

“So people are very hesitant to sell it and if that farmer’s not there to sell against that spec money coming in that will allow this market to move higher,” he says.

Wheat Market High In?
The wheat market saw some recovery on Friday but has corrected off the two year highs hit on Wednesday in both winter wheat classes.

So it the top in?

McCormick says, “Right now I would argue it’s a little bit more of a profit taking week. Remember, we wrapped up the week here just on Thursday. The market was way, way technically overbought, a little bit of a correction. The corn wheat spread was out of whack as well. The other thing maybe generated a little bit of profit taking and generated some selling potentially was we are importing wheat from Poland, I believe, which shows you the price of our wheat has gotten so high that you can make it comparable to bring in competition. That will limit the upside momentum.”

However, he doesn’t think the weather story is over.

“We’ve still got a long way to go. There’s not a lot of rain in the forecast. I’ve had clients that are still trying to adjust for the losses they think
they had due to the severe frost damage that they had here a week, 10 days ago. We’ve got more cold weather coming in. I’m not completely convinced that this wheat market is done with going up,” he says.

Wheat Production Losses
How much of the hard red winter wheat crop has been lost? Some estimates are as high as 200 million bushels.

McCormick says, “I would argue somewhere around 200 million on the low and maybe 300 million on the high end. Now, I know that’s a lot. But remember, we did have a big crop a year ago. So the overall supply is still relatively comfortable. That’s part of the debate of the market right now and that’s why we may not have put the top in because we just don’t know.”

He thinks USDA will make some of that adjustment in the May 12 WASDE in the first balance sheet for new crop.

Cattle Make Record Highs Then Fall
The cattle market made new contract and record highs in both live and feeder cattle futures on Friday, then ended lower.

So was that just some profit taking or the talks that packers were going to start kill cuts next week?

“I think kill cuts are part of it, but I think a lot of it was profit taking. And we had one heck of a move higher. I think we rallied $15 in roughly six days or something like that. Just one heck of a strong move. And I think some people decided, hey, they want to take some money off the table
right now. I mean, we know the story, Michelle, the cattle supply continues to be incredibly tight. We’re also moving into a time of year where the demand tends to ramp up as you go into the spring and summer barbecue grilling season,” he explains.

The key will be if the consumer is willing to pay the higher prices for beef with the spike in gas prices.

“We are in a different situation than we were last time prices were up. You have gasoline prices here outside of the Chicago suburbs trading at $5, outside of Detroit at $6. So, the question now is how much can the consumer take?”

And will they trade down to cheaper proteins.

Hogs Fall on Pseudorabies Case

The hog market was down Thursday and Friday with the first case of pseudorabies in a small commercial hog herd in Iowa since 2004.

The market was pricing in the uncertainty but how low will it go?

McCormick says he thinks the low is close. “Usually it takes one to three days to price in these negative headlines. Like you said, we’ve heard it a couple of days ago. So hopefully we’re close. It was definitely disappointing. Like you said, we haven’t had a case like this in 2004. So getting that headline definitely was a surprise to the market. And, you know, kind of a knee jerk reaction you get when you get these surprise stories.”

Corn and Wheat Pause on Profit Taking: November Soybeans Hit New Highs

Thu, 30 Apr 2026 21:41:45 GMT

Grain markets ended mostly lower except new crop soybeans, cattle were mixed with hogs lower.

Corn and Wheat Take a Breather
Corn and wheat both ended lower on Thursday.

Allison Thompson with The Money Farm says wheat made new highs on Wednesday and was overbought and due for a correction.

Corn made new highs for the move in the overnight session before seeing some pressure from the lower wheat market and profit taking as it was end of the month, plus the start of the delivery period for May contracts.

“I think there was a lot of that definitely at play with the session here to obviously to finish the month. We know the funds have definitely been buyers here again. So seeing them take some profits here after a really strong move is good to see as long as we’re holding support. And so far that seems to be the case. We did have some healthy retracement levels tested during the session. But so far we haven’t seen any meaningful changes fundamentally. And I think that’s going to keep support here under the whole grain complex,” she explains.

The crude oil market also corrected after spiking in the overnight session which may have weighed on corn and wheat as well.

She says, “Yes, crude had losses today too, but there too, we had a very strong overnight session and pushed to some new highs for the move.”

Corrections Are Healthy
She says the corrections in corn and especially wheat are healthy.

“We can’t go in a steep climb forever. You’re going to have to have pullbacks. And honestly, just after the beginning of this week, or even looking back the past three weeks, we’ve had some phenomenal rallies. Wheat, for instance, rallying over $1 in most contracts across all three exchanges. So having a first pullback here, you know, with some double digits is actually healthy for the market. And again, we haven’t
seen anything fundamentally change the story here today. Makes me think it’s more technical,” she adds.

Farmer Selling
With the big run up in prices there was likely some farmer selling as well.

Thompson says she hopes farmers took advantage of the rally to do some pricing.

“We’ve been definitely pushing to be making some sales, especially on a strong run that’s, again, a lot of weather and momentum traded. So it always makes you a little leery, especially this time of year. There is risk ahead, don’t get me wrong, but you’ve got to be rewarding the market when we’re getting rallies and strong moves to some new highs, of course, that producers haven’t seen for a couple of years,” she states.

Weather Change?
There was also some rains in the forecast for HRW wheat areas like Texas. In the past those rains have been disappointing and if the pattern stays the same wheat could add back weather premium according to Thompson.

Plus, she says it may be too late for the rain to help some areas.

“Yeah, at this point, I think a lot of the damage has been done. I’ve talked to producers down there. I’ve also talked to some custom harvesters who’ve been moving or trying to talk to clients who’ve been all the way down to Texas. And unfortunately, one person even commented that they weren’t able to get any farms that were willing to book for wheat anywhere South of South Dakota. So I think that there’s definitely some production issues there,” she says.

There is some replanting taking place but with 34% of the U.S. crop heading it is going to be too late for rain to make a difference in her opinion.

How Big Are the Production Losses?
So are all of the losses priced into the market and what production cuts could be expected?

Thompson says, “Well, that’s the million dollar question is where is final production going to be? But ultimately, the market’s pricing in where these production losses are going to be. And ultimately, it depends what the USDA does. We know they’re kind of notorious for kicking that can down the road. So it could take a couple months before we really start seeing what production is going to be like. And it probably will wait
until we get further into harvest. So end of May, beginning of June, when we normally see winter wheat starting to harvest that we start really building something here on this market.”

She reiterated that wheat markets have a history of going further in extreme times than a lot of people would think.

“And I think we’re in that environment now where we could see prices continue to spike higher.”

Spring Wheat Planting Slow
The spring wheat market was down from the contract highs hit on Wednesday.

Prices have finally moved above $7 and hopefully are profitable enough to entice farmers in the North to continue to plant.

But is the market concerned about low acreage or yields?

“A fair question. You know, South of me, you don’t have to go very far an hour closer to Fargo. And there are guys who are already done planting spring wheat, getting beets in the ground. And then up in my area, just an hour North and beyond, there isn’t any real equipment moving. We really haven’t turned anything yet. And even this morning, we had snowflakes falling in the area. So spring isn’t exactly here yet. And that’s, you know, just keeping things a little bit at bay,” she says.

But it is still early and so she thinks the intended acres will get planted but none beyond that especially with higher fertilizer prices.

Fertilizer Crunch
She says any farmers that have booked fertilizer are more likely to use it on corn acres instead of wheat.

Many industry analysts believe corn acres are dropping but Thompson thinks in the North the acres will be close to intentions.

“A lot of guys booked fertilizer early. Talking with producers where I think those acres are kind of locked in I don’t foresee a big switch coming from our area. I think a lot of guys are intending to plant acres again, just based on what they produced last year. They had a very good season. So I think guys are really going to try and get the corn in the ground, especially if they have the fertilizer booked. If they don’t, might be a different story case by case. But I do think that we’re going to get a lot of the corn going in the ground this year,” she adds.

$5 Dec Corn
With a cut in acres and high fertilizer prices the December corn is flirting with $5. Will it get above that level?

She is optimistic it will for several reasons.

“You know, demand has been very strong for corn. And I know we’re starting to talk about the U.S. growing season and not really seeing, you know, a lot of risk there yet necessarily. I mean, planting pace is going good. Conditions are going to be around the corner here and there’s no hiccups. But we also have to remember South America is a big one right now. And over the next couple of weeks, a lot of their top producing areas further north are going to be starting to go into a dry and hot season. And I think that could have more of an impact on the global corn market, especially with ending stocks at 10-year lows, stocks to use ratio at 10-year lows. We can’t afford a problem. And of course, we have the growing season ahead here yet. So to see the risk appetite in the grains that we have right now, I think it definitely leaves the door open,” she says.

Technically if Dec corn can get about $5.03 she thinks there is a good chance to go to $5.25.

Soybeans End Mixed But Off Lows
Soybeans were under pressure early but did come back with the rally to new contract highs in bean oil even though crude oil reversed lower.

She says a biofuel report show an increase in usage which helped push bean oil.

“So I think that the demand on the oil side could step up some more. But ultimately, that’s what’s leading the market. I mean, we hit three and a half year highs today, and that certainly helps the idea for soybeans. And that complex is really split. It’s obviously a product market. We’ve been following meal for the last couple of weeks. Now it seems like it’s switching over to the oil side. And oil, when that’s leading, can definitely create volatility. So I expect that we’re going to stay range bound here unless soy oil can really kick it into another gear.”

Soybeans Attempt Chart Breakout
The soybean market attempted to break out of its sideways trading range and got above $12 but could not close above that level.

November soybeans made a new high but then closed back under that level.

She says, “It’s really good to see the market really probing those resistance levels and really trying to break through them. But until we can get a close above $12 or above in July, you know, $11.75 in November, it makes it really difficult. You know, the market ultimately is still looking for a catalyst. We have supportive elements there. They’ve been there for a while and they’re keeping us at the top of the range, but the market clearly wants more to get there. So it’ll be interesting to see as we go forward.”

China Deal or Crush?
The one catalyst the market may be waiting for is the results of the China meeting on May 14 and 15 as record crush alone has not been able to get the market above current trading ranges.

“Crush margins remain very strong. So, I think domestically we’re definitely set up and we’ve seen that shift we’ve been talking about it here for several months that you know soybeans used to be a dominantly export market and we’re really starting to see it shift to the product side and so to see that strength build I think it’s just a switch happening within the complex and soybeans are obviously reacting to it and I think it does give us a very good floor under soybeans,” she further explains.

Live Cattle Consolidate
Live cattle futures were mostly lower after hitting record highs on Wednesday on the heels of record cash.

She chalks it up to month end profit taking similar to the grain markets.

“We’ve had a healthy run you’re gonna have to have healthy pullbacks too. It’s good for the market so we’re obviously going to be trying to find support here grains as well same with the livestock just finding where that level of support is going to be where buyers are going to step back in and I think that’s the environment we’re in across the board,” she says.

Funds have been eager to buy on breaks which should also keep the market supported.

Grain and Cattle Futures Pause on Profit After Some Hit Fresh Highs

Thu, 30 Apr 2026 15:55:48 GMT

Grain and livestock markets are mostly lower early Thursday.

Grains See Profit Taking
Grain markets are taking a pause on Thursday after some new highs for the move overnight in July corn. Plus, 22 month highs Wednesday in both winter wheat classes and new contract highs in bean oil, December corn and hard red spring wheat.

Chip Nellinger with Blue Reef Agri-Marketing says it’s end of the month, so he chalks this up to some routine profit taking and farmer selling.

“You saw with the new highs in the corn market, a lot of new farmers selling, just cleaning up some old crop stuff, but probably a little bit bigger movement on the new crop as we just got fractionally close to $5 December futures. That’s the highest level we could have sold to date on the December contract,” he explains.

Markets Eye Crude Oil
The markets are also watching the movement in crude oil, which was sharply higher on Thursday and overnight with the Strait of Hormuz still blocked.

Crude oil backed off and pushed slightly lower early Thursday on end of month profit taking and Nellinger thinks that may have trimmed gains in the grain markets as well.

“We’ve had crude oil really screaming higher, got north of $110. It reversed overnight and is back a couple dollars lower. And so I think all of that is kind of a little bit of a headwind here, but it’s not like it’s aggressive selling yet. Just kind of a normal correction lower. I don’t think it’s anything out of the ordinary,” he says.

Wheat Rally Over?
The wheat market was overbought and do for a correction plus it is first notice day for May contracts and Nellinger says there were some deliveries in Kansas City wheat.

“There’s an old saying on the Chicago Board of Trade grain floor from way back when, buy first notice day. I don’t know if that’s going to hold true today. Kansas City wheat had some deliveries on that May contract. A little bit shocking. You know, sometimes when you get to first notice day, the commercials really kind of start playing a high-stakes poker game, trying to, you know, sift each other out and figure out who’s got the ace in their pocket. And so I think that commercial delivery in the Kansas City May contract this morning had a little bit of a negative tone to it. After a big run into the month, good reason to pull back a little bit.”

There are also rain chances for Texas and that may have also caused funds to take some profits.

However, Nellinger doesn’t think the lower production concerns are priced in yet.

“We’ve likely priced in a lot of the multi-week crop condition decline. But to your point, we don’t know what the ultimate yields are. There’s a lot of people saying, hey, rains don’t matter at this point. We’re too far gone on yields. We may even abandon these acres and not get harvested. So we know there’s damage, but sometimes you have to wait to get into harvest to figure out really what is there. But certainly rain in the forecast, even if it’s a small chance, you know, is not immediately bullish. But likely we’ve dialed in a lot of a lot of bullishness with yield pullbacks. But we won’t know till harvest the ultimate result there,” he says.

Frost Concerns
There are also forecasts for cold temperatures and some frost in some areas of the wheat belt as far South as Nebraska.

Some of the corn and soybeans that have been planted may also be suseptible.

“Yeah, I think on the eastern Corn Belt side, there certainly would be. Again, I don’t think it’s a tremendous amount of acres, but we’re far enough long on the production cycle there that a hard freeze now, once we’re about to turn the calendar here to May, certainly could nip a little bit of wheat. It’s not the perfect time for a frost. We’re far enough along in the development that it could hurt, but I think the frost line is going to be far enough north. probably going to be out of that main wheat growing area in the Eastern Corn Belt here,” he adds.

Does Corn Take Out $5?
December corn got just a tick from $5 on Thursday as it made new contract highs as it has been getting help from the wheat market and the run up in energy prices.

However, if the wheat market rally is over does corn have enough of it’s own story to take out $5?

Nellinger thinks so. “You know, we’re coming into the timeframe here. First part of May, we’re typically put in a spring high. I think everybody’s kind of watching that. And everyone’s asking that same question, Michelle. I think some of it depends on crude oil. You know, crude oil went very quickly from $90 a barrel to north of $110 a barrel. The world took notice of that. The Strait of Hormuz is still closed. So I think some of it depends on what happens the next 10 days, two weeks on crude oil prices,” he says.

The May crop report is also coming up and the market may need demand confirmation from USDA on corn and beans to keep going, but he’s not ruling it out.

“I wouldn’t put it past this to get north of $5 on Dec corn. I don’t know if it’s dramatically north of there as there’s going to be a lot of farmer selling on a push north of $5,” he adds.

Fertilizer Story for 2026 or 2027?
Still with high fertilizer prices and some farmers unable to get supplies there is talk of lower corn acreage for 2026 but is this more of a 2027 story?

He says, “I think it’s both. I’m getting a sense of that as well. And I think that’s maybe drawn some kind of outside equity money in or money off the sidelines kind of as an investment into grains. I get this sense that there’s a narrative across the world of potential food shortages, yield losses due to lack of availability or rationing of nitrogen due to high prices. I think it’s yet to be seen. It’s certainly not something that’s bearish.”

It will impact the Southern Hemisphere, Brazil and Argentina in particular according to Nellinger.

“We have some issues brewing here. So I think it is a story. It’s not going to go away anytime soon,” he says.

Basis Improvement on Corn
Even with the higher futures prices on corn the basis has also improved which is perplexing to Nellinger.

He says, “Yes, you can argue that producers were in the field doing field work, some early planning in the Southern portions. But that basis improvement started even before they got in the field. So surprisingly, over here in the Eastern Corn Belt, things look relatively tight. I don’t think there’s a lot of old crop corn left. Basis has improved. Demand’s good. But in the Northwest Corn Belt, I don’t think the basis has improved as much.”

Export demand may be part of the reason and weekly sales were strong at nearly 63 million bu. again on Thursday.

“Still running, what, 2%, 3% ahead of the pace that the USDA has, and that’s a massive number to begin with. So there has been no slowdown yet,” he says.

High crude oil prices have ethanol margins strong and even with a smaller cattle herd he says producers are feeding to much heavier weights.

Wednesday’s EIA report showed ethanol production was down 31,000 barrels per day, but it was because of routine maintenance.

E15 Possible?
The House passed the farm bill without the E15 amendment but is looking for an alternative to get it passed yet this week before Congress goes on recess until May 12.

How big of demand push will that be for corn?

Nellinger says it will help but it won’t shoot prices higher.

“Unless it’s a mandatory, you know, a mandated thing that we’re going to use X percent. If it’s voluntary, it will help, but probably not to the massive bullish extent that maybe people hope for,” was his opinion.

Soybeans Retrace But Still Sideways
Soybeans are easing as well on Thursday with the rest of the grain complex and seeing some end of month positioning.

However, the soybean oil rallying to new contract highs on Thursday has been supportive as well as hopes for a China deal.

He says, “There’s a lot of optimism that these mid-May China-U.S. trade talks are going to immediately produce large Chinese bean purchases. Not sure if I’m in that camp, but it’s going to hold the bean market fairly firm on breaks in here for a couple of weeks. And you mentioned bean oil. We’ve been hitting new contract highs there again following crude oil.”

Is Bean Oil Close to a Top?
So is bean oil getting overpriced or is it putting in a top?

Nellinger says the big key is when is the Strait of Hormuz going to open and when is oil going to start flowing.

“Crush margins are near record. And so crush demand domestically is just through the roof. And that’s helping bean demand,” he says.

Cattle Consolidate Off Record Highs
Live cattle futures hit record highs on Thursday following record cash trade.

However, Nellinger says they are due for a correction especially as it is end of the month.

“The speed that we went up, yeah, the cash market was massively strong, way better than expected. Probably due for a break in here. I’m not so sure that the packers didn’t get long and then goose the cash market. They’ve been known to do that, and then they take profits immediately after that. So no reason we’ve got to break $20 barring some sort of a Black Swan news event but we are probably overextended and need a little bit of a break here to correct the overbought condition,” he says.

FOMC Leaves Rates Unchanged For Now?
The Fed left interest rates unchanged at the conclusion of their April meeting but the surprise was there were four dissenting votes giving the indication that additional rate cuts are off the table for 2026.

In fact if energy prices stay high with the ongoing war and inflation continues to flair is it possible the Fed could have to raise rates this year?

Nellinger says its possible, “Yeah, I think you would have to, you know, and you may have to anyway. I think that the the $100 plus crude oil is going to take several months to sift through the world economy. So we haven’t even seen some of the effects of that on prices. Think about everything that moves with diesel trains, automobiles, planes, barges, you name it. it is a big deal so the longer we stay at or above $100 I think the more of an argument they have to raise rates to kind of stem inflation a little bit,” he adds.