Grain Markets and Other Stuff

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Crude oil prices surged more than 4% Monday after Iran targeted US vessels and struck the UAE, reigniting fears that the four-week ceasefire could collapse. The move sent soybeans up 14 cents to near $11.97/bu and corn up roughly 6 cents to near $5.05/bu, with wheat also advancing on expected Plains rainfall.
US winter wheat conditions remain historically poor—the top 5 HRW states (KS, OK, TX, CO, NE) are rated just 14% good-excellent with 52% poor-to-very-poor. Nationally, 37% of the crop is rated poor-to-very-poor, well above the 5-year average of 27%. Corn planting reached 38% complete, ahead of the 34% average, while soybean planting hit 33%, well above the 23% average.
On the export front, corn inspections came in strong at 80 million bushels — up 22% week-over-week and 25% vs. last year. Soybean and wheat shipments came in near the low end of expectations. China accounted for roughly 45% of weekly inspections.
The US is urging China to pressure Iran to reopen the Strait of Hormuz. Treasury Secretary Bessent noted China buys ~90% of Iran's energy exports. Trump and Xi are expected to meet May 14th. Meanwhile, China ordered its companies to disregard US sanctions on private refiners tied to Iranian oil purchases.
Tyson Foods posted $260M in net income last quarter, up sharply from $7M a year ago, despite a $240M loss in its beef segment driven by tight cattle supplies. Chicken profit hit $505M. Ag Secretary Rollins flagged the administration's ongoing investigation into the big four meatpackers.

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🌽 Frost risk is rising across the Corn Belt this week as temperatures trend below normal, particularly in northern areas. Heavy rain is also expected to slow planting progress. Storm systems are forecast to bring rainfall across the central and southern Plains, though wheat yield damage in those regions has likely already occurred. The Northern Plains remain mostly dry but face below-normal temperatures and freeze potential. 

📈 Corn futures rallied Friday on rising fertilizer prices tied to the Iran war, which traders fear could reduce yields. The July '26 contract gained nearly 6¢ to settle near $4.80/bu, while the Dec '26 contract traded above $5.00/bu for the first time this year. Cold, wet conditions across the central and eastern Corn Belt added to bullish sentiment. Soybeans and wheat also closed higher. 

📊 CFTC Commitment of Traders (week ending Apr. 28): Large money managers were net buyers of 83k corn contracts — the net long of 266k is the largest since late March. Funds were net sellers of 11k soybean contracts. SRW wheat saw net buying of 20k contracts, pushing the net long to 12k—the largest since June 2022. Managed money also holds a record net long in spring wheat and is near-record net long soybean oil.

🚢 Iranian grain imports have collapsed as vessels idle at sea rather than risk transiting the Strait of Hormuz amid the US blockade. War-risk insurance costs are prohibitive. Iran, heavily dependent on imported feed grains for its meat and dairy sectors, is seeing staple food prices surge — eggs up 118% and bread up 80% since the war began. Rerouting attempts have not offset lost volumes. 

🇲🇽 Mexico replaced its agriculture minister. President Sheinbaum named Columba López Gutiérrez to replace Julia Berdegué, who moves to an advisory role as the US, Mexico, and Canada review the USMCA ahead of a July 1 deadline on whether to extend the agreement 16 years or let it expire. Berdegué had also been leading New World screwworm talks with the US — an issue with little improvement. Mexico is the largest buyer of US corn.

🌽 USDA flash sale: US exporters sold 148,240 MT (≈6 mil bu) of corn to unknown destinations — 78,240 MT for 2025/26 delivery and 70,000 MT for 2026/27 delivery.

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Corn futures slipped Thursday as favorable Corn Belt weather and crude oil weakness weighed on prices. The Dec26 contract settled near $4.94, unable to break through the key $5.00 level. Wheat saw sharp losses, dropping ~16 cents on Plains rainfall forecasts, while soybeans finished mostly unchanged.

The USDA drought monitor showed meaningful improvement in the Corn Belt—drought coverage fell from 36% to just 11% since the start of the year. However, conditions are worsening in Nebraska and Kansas, and winter wheat continues to struggle under dry conditions and recent freezes.

The House passed the farm bill 224–200, reauthorizing ag and food programs for five years. The E15 year-round sales provision was stripped from the bill after pushback from oil-state Republicans. A standalone E15 vote is now expected separately.

Kalshi will not offer 24/7 grain markets after pushback from industry groups and regulators. Grain contracts will align with traditional exchange hours. Meanwhile, the CFTC is reportedly considering more frequent publication of its Commitment of Traders report.

Weekly export sales were strong for corn at 1.6mmt — up 21% week-over-week — with Colombia as the top buyer. Soybean sales were soft at 258,100mt. Wheat sales came in near the top of expectations at 226,100mt, up 75% from the prior week.

The S&P 500 closed above 7,200 for the first time, gaining 1% to a new all-time high. Strong earnings and AI optimism drove the rally, even as Q1 GDP came in at 2% — below the expected 2.2%.

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Farm bill votes are underway—amendments Wednesday night, final vote expected Thursday. The E15 fuel controversy nearly derailed it, but that plan's been dropped. Bipartisan support is building despite House Democrat leadership opposition, as farmers facing rising costs and bankruptcies need relief now.

Senator Cindy Hyde-Smith is pushing to cut fertilizer costs with the Lowering Input Costs for American Farmers Act, targeting tariffs on phosphate imports from Morocco — which controls over 70% of global phosphate reserves. The American Farm Bureau and American Soybean Association are on board.

Oil surged nearly 7% Wednesday to $106.88/barrel as Strait of Hormuz disruptions look increasingly long-term. Trump says the blockade holds until Iran agrees to a nuclear deal — and Tehran isn't blinking. Markets are starting to price in a real supply shock, not just geopolitical noise.

Wheat futures pulled back slightly after hitting a near two-year high, settling at $6.53/bu on the July26 contract. Drought concerns across the Plains remain, and the forecasted rain is expected to miss the driest areas. Corn and soybeans both closed higher.

Bunge raised its 2026 profit outlook after a strong Q1 beat—higher soybean oil prices, solid crush margins, and rising biofuel demand driven by new EPA mandates are all tailwinds. Trade tensions and supply chain risk remain the key unknowns.

US ethanol production dipped to 1.01M bpd last week, down 3% week-over-week. Stocks fell to 25.88M barrels. Despite the drop, Corn Belt ethanol margins remain solidly positive at 15–40 cents.

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🌧️ Illinois Historic Rainfall — Severe thunderstorms dropped a record 3.6" in Springfield and 2.1" in Peoria Tuesday, the highest single-storm totals since 2002. Flooding concerns are mounting across the region, with some corn and soybean growers already discussing replant options.

🌾 Wheat Surges on Plains Drought — The May26 Chicago and Kansas City wheat contracts jumped 28 and 30 cents Tuesday to close at $6.49 and $6.97/bu, respectively, on intensifying drought stress across the U.S. Plains. Forecasted rainfall is expected to miss the hardest-hit western areas, where yield losses are likely already underway.

🌽 Corn Gains, Beans Slip — May26 corn gained roughly 5 cents to close near $4.65/bu — its highest since late March — supported by near-term Corn Belt rainfall, strong export demand, and a 3.7% surge in crude oil to near $100/barrel. Soybeans edged lower on technical selling and expectations of large South American supplies, while the Dec27 corn contract topped $5.00/bu for the first time.

🥩 Smithfield Margins Under Pressure — Rising diesel and packaging costs tied to the Middle East conflict are squeezing Smithfield's profitability, sending shares down roughly 8% Tuesday despite a Q1 earnings beat. The company plans to offset input cost headwinds through price increases and efficiency improvements, and also noted higher beef prices amid historically tight cattle supplies.

🌱 EU Rejects S. American Soy Shipments — Dutch authorities detected non-approved GMOs in four Argentine and two Brazilian soybean meal shipments, triggering withdrawals and potential disruption to the EU's largest soy suppliers. The situation could shift demand toward the U.S. and Ukraine as Europe enforces its strict GMO import regulations.