Farmers and Biofuel People: Bring THIS Chart to Congress!!!

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Gas prices are climbing again, hitting a national average of $4.17/gallon, with analysts warning of $4.20 within days as oil hovers near $100/barrel amid the US-Iran conflict and near-shutdown of the Strait of Hormuz. Emergency oil reserves worldwide are being drawn down rapidly, raising supply alarm bells.

US winter wheat conditions remain historically weak — the top 5 HRW states are averaging just 13.8% good-excellent, with Nebraska's crop sitting at a staggering 65% poor-very poor. Corn and soybean planting are running ahead of the average pace.

Wheat futures rallied Monday on crude strength, a weaker dollar, and dry Plains conditions. Chicago May26 wheat settled near $6.22, KC May26 near $6.67, with both HRW and HRS posting fresh highs. Corn and beans also closed higher, with Dec26 corn hitting fresh 1-month highs overnight.

The Iran war is triggering a major fertilizer crisis—over half of the Middle 
East's urea production has been disrupted, with roughly 30% of global urea trade affected by the Strait of Hormuz closure. Farmers worldwide may be forced to cut application rates, threatening yields and global food security.
The Trump administration is expected to unveil a fertilizer investment plan this week, targeting both short-term price relief and long-term domestic production reshoring, while the USDA and DOJ investigate potential price gouging.

US corn export inspections came in at 65 million bushels for the week ending April 23 — solid but down slightly week-over-week. Soybean shipments were up 37% vs. last year, with China taking ~39% of inspections. Wheat shipments came in near the top of expectations at 13 million bushels.

Transcript

NOW is the Time for Year-Round E15

SPEAKER_01 0:08

Morning guys. It's Tuesday, April 28th, 5 23 a.m. Central Time. Grain markets are mostly higher this morning. December corn futures up three and three quarters at 493 and a quarter. November soybeans up one and a quarter at$11.67. July Chicago wheat up 12 cents at 6.41 and 3 quarters. July Kansas City wheat up 19 and 3 quarters at 694 and a half. September spring wheat up eight and three quarters at 7.20. We're going to start off with gas prices, and then I've got an ethanol chart for you guys this morning.

SPEAKER_00 0:38

So prices continue to rise with the national average reaching 417 per gallon this week. And experts believe it could reach 420 within the next 10 days. The culprit, of course, is oil hovering near$100 a barrel, driven by the ongoing US-Iran conflict and a near shutdown of shipping through the Strait of Hormuz. To make matters worse, countries around the globe have been burning through their emergency oil reserves. And some analysts are warning that the U.S. could hit dangerously low supply levels within just a few months.

Winter Wheat Conditons

SPEAKER_01 1:08

WTI crude futures are hovering just below$100 this morning. The June contract, as is as I speak, is$99.95. That's up a little bit more than$3.5. So gas prices, as McKenzie mentioned, continue to shoot higher. National average this morning, closer to$418. National average diesel price,$546. There are, of course, some high-tax states in which uh gas prices are much higher than that. This is the chart that I wanted to show you guys this morning. This is from Brett Gibbs, who is an analyst at Bloomberg. U.S. ethanol is now the cheapest versus gasoline in 20 years. If you're watching and you're a farmer or you're a probiool person, this is the chart that you need to take to your representative. You need to show to Congress. You need to say, hey, now is the time for permanent year-round E15 legislation. Now is the time to uh get this thing pushed through. If you can't get it pushed through now, given just the pure mathematics and economics of this, it ain't ever going to happen. We know that the oil lobby is very powerful. We know that the uh corn grower and ethanol lobby is very, very tiny by comparison, but um it's it's not impossible to get it done. I just think you need to get this in the um in the hands of the right people. And maybe good things will happen. This is this is the signal. Go get it done. You guys can do it.

SPEAKER_00 2:32

U.S. winter wheat conditions held steady last week with 30% of the crop rated good to excellent through Sunday. The rating is the lowest for the week since 2023 and the third lowest in the past 10 years. Meanwhile, U.S. corn planting was 25% complete through Sunday, up from 11% the prior week and ahead of the 19% average. Soybean planting advanced rapidly, reaching 23% complete, up from 12% the prior week and well above 12% on average. And then finally, the U.S. spring wheat crop was 19% planted compared to 12% last week and 22% on average.

Corn/Soybean Progress

Grain Rally

SPEAKER_01 3:06

Okay, we're gonna start with winter wheat ratings, which look as if they were unchanged, but that's because you've got strong ratings in your SRW states in the Midwest. The HRW crop is still in very uh bad shape. When you look at the top five HRW producing states, which are um Colorado, Kansas, Nebraska, Oklahoma, and Texas in no particular order, they are rated on average just 13.8% good to excellent. And the average poor to very poor rating across those top five HRW states is a whopping 52.2%. Nebraska's crop is the worst at 65% poor to very poor. When we look at the uh drought situation, and and just I'm more interested interested in the production density here, but all of this dark green stuff over uh mainly Kansas and the western two-thirds of Kansas is what we're concerned about. They caught a little bit of rain here over the last seven days, but it's not enough, and it may in fact be too little, too late. There's really not much in the forecast. I think the damage is probably done here. I think even if you were to catch uh some rain here, week 10 days out, this is this is a deal where production is going to be down sharply, and the markets are reflecting that. We've got uh new highs, and we're gonna get to markets in a second in some charts. We've got fresh highs in HRW wheat futures and also in spring wheat futures this morning as a result of this. To look at corn planting, we are moving along uh pretty much as actually we're ahead of schedule, 25% versus 19 on average. There are a few states that are behind average, North Carolina is behind average, uh, Michigan and Wisconsin are behind average, North Dakota is behind average, Kansas is behind average, everybody else is ahead of average. Soybean planting is way out ahead of normal at uh, what did you say it was 23% versus 12 on average nationally? A lot of some of this has to do with dryness in the south and in the delta areas, but it also has to do with changing economic practices or I'm sorry, agronomic practices. There are just um a lot of farmers that plant soybeans before corn now, and this is something that's been uh kind of we've been moving in that direction for a few years. So when you look at five-year averages, it's not it's not totally the same as it as it is today. Corn belt's gonna dry out over the next seven days. There's really not a lot of rain in the forecast, especially for central and western areas. Maybe you get like, you know, up to half an inch or an inch of rain and call it southern Illinois, Indiana, Ohio. But Iowa's gonna be dry, Wisconsin's gonna be dry, Minnesota's gonna be dry, Dakota's, um, Nebraska, Kansas stay dry. Spring wheat very quickly were uh pretty close to average there.

SPEAKER_00 5:35

Wheat futures rallied yesterday as the May 26 Chicago wheat contract rose about 13 cents to settle near 622 per bushel, while the May Kansas City wheat contract gained roughly eight cents to close around 667 per bushel. The rally was supported by higher crude oil prices, a weaker dollar and yield concerns stemming from dry conditions across U.S. HRW wheat areas. Corn and soybean futures also closed higher, driven in part by rising crude oil prices. The May uh corn contract gained nearly six cents to settle around to settle around 461 per bushel, while the May soybean contract climbed about 14 cents to close near 1177 per bushel.

SPEAKER_01 6:13

Grain markets have really uh come to life here. July Kansas City wheat futures posted fresh highs overnight. You still got an open gap on the chart uh near 610, but this thing looks awfully good. And this, of course, is is mainly because of the drought in the southern plains. Uh, same thing with spring wheat, fresh highs overnight. Your subcontract traded up to what 719 and change or something along those lines. Uh dece corn looks good today. We're up back into the 490s. I wonder if farmer selling is going to emerge again because the last time we were up here about a month ago, this is the highest we've been in a month this morning. Uh, we saw, I believe, quite a bit of farmer selling emerge in the 490s just below that$5 area. November soybeans look good. You've got a big double top at$11.74, and uh, you're not that far away this morning. So these markets have really come to life. I'm not sure if it's um, I know wheats wheat's leading the way on the Southern Plains job story, but I think people are starting to pay attention uh to this fertilizer thing also, and we're gonna get to that here in just a second.

SPEAKER_00 7:11

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

Fertilizer Crisis

SPEAKER_01 7:18

Yesterday I did something I used to do a lot of a chart dump where I run through like a whole bunch of uh long-term commodity charts in a very short period of time and just kind of give you the lay of the land. I like doing this during planting in particular because it's hard for you guys to watch all this stuff. And it's good for me too, just to uh to look at some of the outside markets, look at look at fuel, look at some of the grain markets we don't always talk about, look at uh precious metals, look at the SP. Um, I did this in about seven minutes yesterday. Shea was on Friday, talked about he's been doing a lot with AI, uh, use AI to make better AI tools. There's a lot of things you could be doing, and a lot of things that I probably should be doing with AI, but uh I'm not, and maybe I'll get there someday. Today's video is going to be very good. Uh Paul Nefer is going to be on, and we've got an SDRP slash policy mailbag. So they announced um another round of SDRP payments last week. And our premium subscribers, who are very sharp, sent us in a list of questions for Paul to answer. And um, this is gonna be the kind of stuff that you guys want to know about because it came directly from our farm audience. If you want to see the premium stuff, go to standardgrain.com. You can sign up this morning. The video with Paul will be out at 10 a.m. Central Time this morning in an email blast. Uh, you can sign up, it's 50 bucks a month, cancel at any time. I know you guys are busy, you're in the truck, you're in the tractor. It's a very busy time of year. It takes about 30 seconds to sign up, and this is actually some really nice like uh planting viewing material. You know, the tractors drive themselves so they can watch the videos. Um, give that deal a shot this morning, guys.

SPEAKER_00 8:39

The ongoing fertilizer crisis triggered by the Iran war is threatening to fuel global food inflation. Since the onset of the conflict, more than half of the Middle East Syria production has been disrupted, largely due to the closure of the Strait of Hormuz. At the same time, Iranian drone attacks across the region have damaged key infrastructure, further limiting production. This marks the second major fertilizer supply shock in four years and could prove more severe than the disruption following Russia's invasion of Ukraine. Many farmers worldwide are expected to reduce fertilizer application rates for the next crop year, potentially lowering yields, tightening global production, and worsening food insecurity.

Trump Fertilizer Plan

SPEAKER_01 9:19

I don't know exactly how bad this is gonna be. I mean, we've seen all the data about fertilizer exports through the strait and how they've come down to nothing. And urea production in the Gulf is down because one of the big um natural gas fields was blown up. Um, I don't I don't know exactly how bad it's gonna be, but you know, in in the next year or two, like a real are we really gonna see big declines in global grain output? I don't know. But if you're a fund trader and you got a lot of money and you're listening this morning, yeah, we're gonna see massive, massive, massive reductions in production. And these markets just absolutely need to scream higher. So uh if you've got a lot of money and you're trading the grains, make sure you uh pay attention to that. Urea prices at the Gulf are sticky high. Uh fifth consecutive week above$650 per ton. And that's that's a a Gulf futures price. Cash price in your neighborhood is obviously much higher than that. And uh this has become a big problem for farmers, of course. Last time we were this high was in 2022, but uh corn prices were what six or seven dollars? Uh much, much different environment.

SPEAKER_00 10:21

According to Ag Secretary Brooke Rollins, the Trump administration is expected to unveil a large-scale investment initiative this week aimed at lowering fertilizer prices and curbing imports. The plan is expected to include short-term measures to ease price pressures, such as expanding import markets and coordinating with fertilizer companies to stabilize prices long term. The strategy will focus on reshoring production through federal investment in new domestic facilities and support for existing projects. The administration also intends to streamline regulatory procedures to accelerate project uh project timelines. And then, meanwhile, the USDA, in coordination with the DOJ, continues to look into potential price gouging within the fertilizer market.

Shipments

SPEAKER_01 11:04

I just don't see this as helping things short term. I mean, long term, this sounds great. And there's been a lot of like kind of Trump-ish initiatives that, you know, hey, we want to, we want to bring back this to the US, we want to bring back that to the US. Yeah, I agree. Bring it back to the US, but this isn't gonna fix your problem here for the next uh couple of years, the way that it looks. I still wonder if there's sort some sort of uh fertilizer uh direct farm payment on the table. I bet that there is, but maybe they don't know enough to discuss it.

SPEAKER_00 11:32

U.S. corn shipments declined last week, but remain strong. USDA reported that 65 million bushels of corn were inspected for export during the week ending April 23rd. The print was down 5.7% compared to the prior week and down 1.3% versus the same week last year. Soybean shipments were reported at 23 million bushels. The print was down 17% compared to the previous week, but up 37% versus the same week last year. And then wheat shipments, they were near the upper end of pre-report expectations at 13 million bushels. The print was down 30% from the previous week and down 44% versus the same week last year.

SPEAKER_01 12:06

Uh soybean shipments are pretty much doing what they typically do seasonally. We're falling off. The problem is that we never really saw um a strong shipping program during our prime slipping a shipping slot, which is like October, November, December, largely because China hadn't bought anything. And that was the big problem. China did come in and bought close to 12 million metric tons of beans from the U.S. We've shipped most of them. So that story is kind of behind us. The story we're going to be looking for now in soybeans would be new crop purchases or lack thereof to this point. Corn shipments are good, uh, a little bit above normal seasonal levels, and we should be above levels needed to hit USDA's export target. What did cattle do yesterday?

SPEAKER_00 12:46

Cattle futures were sharply higher. Live cattle were 212 to 375 higher. Feeder saw gains ranging from 295 up to 655. Box beef prices were also higher. Choice was up 256 at 389.56, and select was up 253 at 388.60.

SPEAKER_01 13:00

Stock markets mixed this morning. Treasury's down a little bit, US dollars higher. Crude oil would be probably the uh big mover that we should pay attention to up 327 in the June WTI at 99.64. So toll toward the uh upper end of the recent trading range. Have a great day, guys. We'll be back on Wednesday.