Grain Bears are FRUSTRATED - Are "The Funds" Defending their Long Positions??

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Markets on edge as the US-Iran ceasefire hangs by a thread 🚨
Iran is already alleging violations before talks have formally begun. Peace negotiations are tentatively set for Pakistan this Saturday, but the Strait of Hormuz remains largely closed. Crude cratered 16% to settle near $94 🛢️—and Goldman says don't expect the low $80s until the strait fully reopens.

The dollar had its worst day since January, dropping 0.8% as investors fled safe havens 💵📉. Markets are now pricing in ~25% odds of a Fed rate cut by year's end.

Wheat got slammed—Chicago May down ~18 cents, KC May off ~12—hit by falling crude and rain forecasts across the Plains 🌾☔. Corn closed lower; beans bucked the trend and finished higher. Watch the western HRW areas — they may miss the forecasted rains.

Super El Niño on the horizon ☀️🌧️ — models show it developing July/August, peaking in November, and lasting into 2027. Generally favorable for the Corn Belt, but watch for planting delays and disease pressure.

USDA WASDE drops at 11am CST today 📊 — expectations are quiet, corn/soy stocks largely unchanged, wheat slightly lower. Post-report breakdown video coming shortly after!

Ethanol production hit a seasonal high at 1.12M bpd, up 5% YoY 🌽⚡. Margins remain solid across the Corn Belt at 15–40 cents positive.
Lots moving today—stay locked in. 👇

Transcript

US/Iran Update, Crude

SPEAKER_00 0:08

Good morning guys. It's Thursday, April 9th, 524 a.m. Central Time. Grain markets are mostly higher this morning. May corn futures up two and three quarters at 450. May soybeans up three and a quarter at eleven sixty-five and a quarter. May Chicago wheat up six and a half cents at five eighty-six and three quarters. May Kansas City wheat up eight and a quarter at six oh three and a half. May spring wheat up four and a half cents at six twenty-eight and a half. Let's start off with the latest and greatest from the ceasefire.

SPEAKER_01 0:35

So the U.S.-Iran ceasefire remains fragile as Iran has alleged that the U.S. has already violated three parts of its 10-point ceasefire proposal, making the agreement and negotiations unreasonable. Peace deal negotiations between the U.S. and Iran are tentatively scheduled to begin in Pakistan on Saturday. According to President Trump, the ceasefire is contingent upon the immediate and safe reopening of the Strait of Hormuz. However, Iran is demanding that ships pay tolls to pass through the waterway, a stipulation the White House, the White House has rejected. Crude oil prices continue to decline on Wednesday, with U.S. crude falling 16.4% to settle at 94.41 per barrel.

US Dollar Drops, Corn Correlation

SPEAKER_00 1:18

The whole Iran situation is far from over. Crude oil is back higher this morning. We're up almost$5 a barrel, 99.07 last in the May WTI. The White House said that the U.S. will hold direct direct talks with Iran, as McKenzie mentioned. There were no reports of strikes from Arab Gulf nations since Wednesday. Trump said that U.S. military personnel would remain in place around Iran until a firm ceasefire is reached. The Strait of Hormuz remains largely closed as of Thursday. An analyst at Goldman Sachs said this. This isn't over yet. We will need to see a full opening of the strait with no obstacles before we see crude prices in the low 80s for WTI. And I don't see that in the next two weeks. So this is still very much a fluid situation. It could go one way or the other. There's a lot of um uncertainty regarding the reopening of the strait and these fees and exactly how this is going to play out. But there's not, there's not very much moving through the strait right now. And that's what we need to see to see, you know, drastically lower crude prices. Let's go to the dollar, which I think is kind of interesting.

SPEAKER_01 2:20

So the ceasefire triggered a sharp decline in the US dollar yesterday. The Bloomberg dollar spot index fell 0.8%. It's worst day since January, wiping out all of the dollar's gains for the year. The sharp decline, however, appears to be technically driven and may be somewhat overextended. Geopolitical risks in the Middle East remain elevated as transit through the Strait of Hormuz has yet to fully normalize and the ceasefire is limited to only two weeks. Meanwhile, declining oil prices and easing inflation concerns have led markets to price in about a 25% chance that the Fed will cut interest rates by a quarter point by the end of the year.

Wheat, Weather, Frustrated Bears

SPEAKER_00 2:58

Yeah, we'll see what happens with the Fed. I mean, we're going to see a CPI printout tomorrow. It's going to be hot. I think it's going to be hot. I don't know. But it's going to be elevated versus last month at least. The dollar index, at least this version of it, the most widely followed version, has really been range-bound since early 2025. We've been back and forth within a range. Um we rallied uh kind of initially on this Iran thing. Now we've backed off. One thing that is of interest to me, you know, we always sometimes talk about the uh the dollar grain correlation. We've basically seen a positive correlation between the dollar index and the corn market and also the soybean and wheat market since the beginning of the year. And that's really not how this is supposed to work. You're supposed to see an inverse correlation. If the dollar's strong, you know, grains are supposed to be weak and vice versa. We haven't really seen that. And actually, in the um in the post-COVID world, we've oftentimes seen positive correlations. There was that whole period in 2021 and 2022 when the Fed was hiking rates, the uh the dollar was rallying, and grains rallied at the same time. So this doesn't always have to work. And since COVID, especially, doesn't seem like it it has to work how it had historically. I remember times earlier in my career where the dollar was a big, big deal and it it seemed to be a big mover of markets, especially the grain markets. And um, I just I don't know that we're seeing that uh sort of relationship anymore.

SPEAKER_01 4:23

Wheat features declined sharply yesterday with the May 26 Chicago wheat contract falling nearly 18 cents to close near 580 per bushel, while the May Kansas City wheat contract declined about 12 cents to settle near 595 per bushel. The sell-off was triggered by falling crude oil prices following uh the US-Iran ceasefire. Additional pressure stemmed from forecasts calling for rainfall across a large majority of the central and southern U.S. plains. Corn futures also closed lower uh yesterday while soybeans moved higher.

"Super El Nino"

SPEAKER_00 4:54

We have an update on those weather forecasts. Let's look at some charts first, however. Here is July Kansas City wheat. It posted what I would call kind of a spike low yesterday, 602 and a half, and we're trading 617 this morning. Ask you guys this question, looking at these charts. Here's Deese Corn, uh similar kind of spike low and then a rebound. Um, no soybeans, kind of a spike low and then a rebound right back into the range. You guys are farmers, you're you're inherently long the market, a lot of you guys watching, but think of this on the other side. Let's say you were short the market. Wouldn't you be kind of frustrated by what's happened here during the last 24 hours that we had this whole ceasefire news, crude drops 20 bucks, and you couldn't the selling pressure, the lower prices in corn soybeans and wheat couldn't stick. I think if you were if you were bearish the grains, I think you would be a little frustrated here. Uh we talked about large money managers uh yesterday. They are still heavily net long the corn market and heavily net long soybean market. And the way it would appear, they are, at least for the moment, making some attempt to defend those positions. Okay, let's go to wheat. Here is the southern plains, and I've got our map from our friends at Crop Profit on the right. That's percentage of normal rainfall over the last 30 days. The central and western areas of Kansas into the Texas, Texas, Oklahoma, Panhandle area, eastern Colorado, seen like 10 to 20 percent of normal rainfall over the last 30 days. You can see on the left, it hasn't really shown up on the drought monitor yet, but some of the most important winter wheat areas uh in the United States are in that dark green in Kansas, and especially the western part of Kansas into the eastern part of Colorado. Um the forecast this morning is a lot more uh call it iffy with regard to rain chances. Rains are not coming for those western areas during the next five days, the way that it looks now. And even during the extended period, it's still kind of iffy. So this could be part of the reason why the wheat market is higher this morning. Maybe it's that, maybe it's just yesterday was a knee-jerk reaction. But you know, the forecasts looked a little bit more convincing uh with regard to rainfall for these western areas and now not so convincing at all. Uh looking at cornbelt rainfall chances, there will be some, I'm gonna call them planting disruptions. I'm not gonna call them delays. It's too early for that. There's a whole there's a whole like like idea and concept behind the word planting delay. So we're not gonna use that word yet. We're gonna call these disruptions that could occur as the result of uh forthcoming rains across everywhere from uh Kansas, Missouri, Iowa, Minnesota, Wisconsin, northern Illinois. Eastern Corn Belt's gonna be a little bit drier. But uh you'll see some guys who would like to be in the field uh that get held up here for a little bit at least.

SPEAKER_01 7:29

A super El Nino is expected to impact the Midwest later this summer. Weather models indicate the event will develop in July and August, peak in November, and persist into 2027. El Nino conditions in the Corn Belt typically bring milder temperatures and a reduced risk, a reduced risk of extreme heat. More consistent rainfall is also associated with the weather event, particularly in the eastern corn belt, while the western areas see less reliable precipitation. Overall, this pattern is generally favorable for crops. However, increased precipitation can lead to planting delays and increased disease pressure.

SPEAKER_00 8:06

Sure. Whatever. Long-term weather forecasts, you know. I mean, it it it could matter, I guess. I mean, I'm not ever I've never been somebody who like will ever hang their hat on long-term weather forecasts. Um, but if you run into a situation that's say too wet and too cool, that could be problematic, maybe even more so this day and age than than hot and dry. Because you could have hot and dry for most of the summer, but if you catch those two or three rains in July, you know, corn crop's gonna be pretty good. If you're kind of wet and cool like the whole year, it presents a different set of problems. And um, I feel like that could actually be perhaps the worst scenario this day and age, dare I say. You guys can argue with me in the comments um about that.

SPEAKER_01 8:44

If you guys haven't checked out our premium content, you sure need to do so. Joe, can you tell our viewers about some of our recent premium videos?

USDA Report Today

SPEAKER_00 8:50

Matt Bennett was on with me yesterday for a 20 questions segment. We take uh mailbag questions from our premium subscribers, talked about the ceasefire, courage calls, which is an interesting concept. I think I'm gonna cover that in a short premium video today. Uh, carry and how to capture it and how not to capture it. Um, the oil, corn relationship, whole bunch of grain marketing stuff yesterday with Matt. Lewis Stearns was on earlier this week and talked about ag biologicals. Uh, should you be buying what the ag biologicals people are selling uh with regard to inputs on your farm? Is there any ROI here? What's the research say? Lewis is an independent agronomist, has done a lot of work on this. Uh, the video with Dave Woodcomb on Monday was fantastic. Must know seasonal information for grain marketers. If you guys are the are the you're the one doing the marketing on your farm, this is a video that you need to watch. You should print off the slides, you should have them handy because there's some really great statistics that I think will help to uh perhaps steer you in the right direction. If you guys want to see the premium stuff, go to standardgrain.com. You can sign up this morning. This is a$50 per month subscription. You can cancel at any time. There's no other fee, no other obligation. Nobody will try to sell you anything else. I know you guys are getting busy. You might be out, um, you might be working. You can sign up on your phone in about 10 seconds. We do Apple Pay, Google Pay, Cash App, um, all that stuff. All the information is super easily accessed on your phone. All the premium videos are just one click to play on your phone. Uh, give that deal a shot this morning, guys.

SPEAKER_01 10:07

USDA will release its monthly crop production and Wazdi report here this morning at 11 Central Time. Traders expect USDA to largely maintain its current U.S. corn and soybean ending stocks while wheat stocks are anticipated to slightly decline. World ending stocks are also expected to remain largely unchanged.

Ethanol Production

SPEAKER_00 10:25

This should be a snooze fest. Um, USDA could make some minor adjustments. USDA does not release an official set of uh new crop balance sheets until May. So next month's report will be a little bit more interesting. We'll have some 26-27 stuff to uh at least look at and consider. It's not going to be reality, of course. They're just projections. But this report is an old crop report. There will be probably some minor adjustments. Maybe the South American crops get adjusted a little bit. Maybe they uh they tinker with the U.S. balance sheets, but should not be a market mover.

SPEAKER_01 10:56

U.S. ethanol production climbed to a seasonal high last week. Weekly output was reported at 1.12 million barrels per day, up 3.8% compared to the prior week and up 5% versus the same week last year. Ethanol stocks rose to 26.05 million barrels. The print was up marginally compared to the previous week, but down 2.1% compared to the same week last year. According to Reuters data, Reuters data, U.S. ethanol margins currently range from 15 cents to 40 cents positive across the corn belt.

SPEAKER_00 11:23

Yep, very good. Everything is positive. That's a record production number for this particular week in time. Um, stocks should trend lower into June, July, August. That would be the normal seasonal trend. I believe um ethanol production is up like a little bit less than 2% year over year. We could be a little short of USDA's corn demand for ethanol target, but um I'm not gonna get too worked up about it. What did cattle do yesterday?

SPEAKER_01 11:48

Cattle futures were higher. Live cattle were five cents to a buck thirty higher. Feeders saw gains ranging from a buck 10 up to 190. Box beef prices were lower. Choice was down 308 at 379.66, and select was down 406 at 382.27.

SPEAKER_00 12:01

Stock markets lower this morning marginally after a big day yesterday. The SP is down about three tenths of a percentage point. The Dow is off 200 points or about four tenths of a percentage point. Treasuries are mixed, US dollar is just marginally lower. Crude oil now up four dollars and seventy cents at 99.14 in the May WTI. Have a great day, guys. We'll be back Friday.