Grain Markets and Other Stuff
Joe Vaclavik and Mackenzie Johnston discuss the grain markets, the business of farming, news related to agriculture, and a variety of other topics.
Grain Markets and Other Stuff
$5 Corn and $12 Soybeans - Not What They Used To Be
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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.
Corn/Soybean Rally
SPEAKER_00Morning guys. It's Tuesday, May 5th, 524 a.m. Central Time. Grain markets are mostly lower this morning. December corn futures down three quarters of a cent at 503 and three quarters. November soybeans down one and three quarters at$11.95. July Chicago wheat down two and a quarter at$6.38 and three quarters. July Kansas City wheat down seven and a half cents at 687. September spring wheat down four cents at 7.13 and a quarter. We had a nice rally in the row crop markets yesterday. Why don't we start there?
SPEAKER_01Rising crude oil prices sent soybeans soaring yesterday with the November 26th contract climbing 14 cents to settle near$11.97 per bushel. The market also found support amid strong crush demand. Corn futures also advanced, supported by higher crude prices and forecasts calling for rain across the corn belt that could disrupt planting progress. The December 26th, con 26th contract gained roughly six cents to close near 505 per bushel. Wheat futures, they also moved higher, supported by expected rainfall across the U.S. plains.
Planting Pace, Wheat Conditions
SPEAKER_00I don't really know what the um what the reason is for the row crop rally. I mean, you can certainly look to crude oil prices and say, okay, crude was crude was up, so the grain should trade higher, but that's kind of an old story. And we're gonna get to crude in a in a minute. And crude oil really is trading like the middle of what's been its kind of post-Iran trading range. So I'm not I'm not sure that crude oil is it. I feel like we've got perhaps some sort of just Pete Meyer would call it a momentum trade. Um it kind of builds upon itself. You've got the technicals improving, you've got large speculators that think they've got a story in uh this fertilizer situation, but that all remains to be seen. You know, we haven't seen a USDA or anybody else for that matter reduce their production estimates in any material fashion because of lack of fertilizer. We haven't seen it printed on government paper yet that, oh my gosh, this fertilizer situation actually did result in lower production. Those are only things that could happen in the future. Let's take a look at some charts. I got a couple interesting ones for you today. So this is just a plain old December corn chart. It was estimated that the funds, large speculators, bought another at least 20,000 contracts of corn on Monday. So we traded up to 505 and three-quarters.$5 corn is something you guys have been looking for for a long time. This is an interesting chart. This is a weekly continuation chart of corn, but it only tracks the lead December contract. So right now it's tracking D's 26. When D's 20 trick when D's 26 expires, it'll track D's 27. You get the idea. This is the highest trade for any lead December corn contract since late 2023, is what we're seeing here. And I believe that would have been the D's 24 contract at that time. Now,$5 corn is it's all you guys have been asking for for three years, right? The problem now is that$5 corn,$5 corn is certainly not what it was in like the pre-COVID time frame. And it's not even what it was just a few months ago. I mean, back in January, February, March before this uh Iran thing unfolded,$5 corn was absolutely$5 corn futures were almost certainly associated with breakeven or profitability for a lot of you guys. And now, post-Iran, we've got a spike in fuel prices, spike in fertilizer prices. And we don't know if it works. I think it works for a lot of you guys, but it's not quite what it was. Let's do the same thing. Or actually, let's do this first. Um, here's percent change since the start of 2026. And I threw this in along with the corn charts just to illustrate something. Corn prices have not even come close to keeping up with crude. The one thing that has is soybean oil. Soybean oil is up 59.9% year to date. Uh, crude oil is up 81%. So you're uh close-ish. Corn's only up 8.5%. So if you're looking to a an agricultural commodity uh to that is kept up with crude to some degree, soybean oil is that commodity. Okay, here's the soybean charts. Here's a plain old uh daily November soybean chart. We traded above$12 briefly on Monday.$12.5 was the high. We're back down to uh what,$11.93 here this morning, but still a pretty good looking performance. Here's a similar chart. This is soybeans weekly continuation, except it tracks only the lead November contract. And this is the highest trade for any lead November soybean contract since May of 2024. Um,$12 soybean futures could be associated with breakeven or profitability for some of the farmers watching. If you're in the Western corn belt and you've got just absolutely terrible basis, probably doesn't work. It probably doesn't work and probably doesn't make money, even though we're at uh multi-year highs, which is incredibly disappointing.
SPEAKER_01U.S. winter wheat conditions improved slightly last week. As of Sunday, the crop was rated 31% good to excellent, up from 30% the previous week. However, 37% of the crop was rated poor to very poor, up two percentage points from the prior week and well above the five-year average of 27%. U.S. corn planting was 38% complete through Sunday, up from 25% the prior week, and ahead of the 34% average. Soybean planting continued to progress rapidly, reaching 33% complete, up from 23% the prior week, and well above 23% on average. And then US spring uh and then the U.S. spring wheat crop uh was 32% planted compared to 19% last week and 35% on average.
SPEAKER_00So you look at the big picture, you look at the planting pace, we're ahead of schedule in corn, we're ahead of schedule in soybeans, you look at the winter wheat conditions, and they were actually up on the week, um, just marginally, doesn't really tell you the whole tale. Let's start off with winter wheat. The problem, not the problem here, but what you need to be aware of is that your SRW crop in the Midwest is rated uh it's very strong. Missouri, 72% good to excellent. Illinois, 75% good to excellent, Indiana, 71% good to excellent winter wheat. When you look at your top five HRW producing states in the Southern Plains, which is um Kansas, Oklahoma, Texas, Colorado, and Nebraska, they are rated on average 14% good to excellent on average. They have an average poor to very poor rating across those five states at a whopping 52%, 52% of the top five HRW areas uh on average rated poor to very poor. The uh where you live, McKenzie, is the worst. 67% uh poor to very poor winter wheat in Nebraska, and it's dry as hell where you're at, right?
SPEAKER_01So dry, absolutely terrible.
Iran, Crude Oil
SPEAKER_00Yeah. Okay, so that there is a story there, and we'll do some weather here in a second. Um, corn planting is, you know, we're ahead of the five-year average, but you've now got this kind of divide between states that are ahead of schedule and states that are not. Here's a list of states that are behind the five-year average with regard to corn planting. North Dakota is 4% planted versus nine on average, Kansas is 41% versus 42 on average, Colorado, 19 versus 20 on average. The state of Iowa, the largest corn grower in the country, 42% versus 44 on average, not behind by much. Missouri's 51% versus 57 on average. Wisconsin, 10% planted versus 15 on average. Michigan, 5% planted versus 14 on average, and North Carolina, 74% planted versus 79 on average. Everybody else is ahead of schedule. So there there are some issues here. Soybean planting is ahead of schedule as well. Um, some minor issues there. We've had some cold weather. Spring wheat planting, a little bit behind schedule. We've got some rate um activity on the radar here this morning. And we knew this was coming. Some more rain across uh Missouri, that Kansas-Nebraska borders got a little bit. I don't think it's gonna amount to much the way that the uh forecast looks. And then you got some rain over parts of Illinois, parts of Indiana into Ohio. As far as HRW wheat areas are concerned, there will be some accumulation here over the next seven days. I think it's gonna be too little, too late. Everybody I've talked to on the ground in those areas just tells me it's it ain't gonna really matter at this point. Um, cornbelt rainfall should be confined to uh like the southern two-thirds of Missouri, southern half of Illinois into like east central Illinois. A lot of Indiana, a lot of Ohio are gonna be wet. Temperatures slated to run below normal for another several days across the cornbelt. This is some good stuff from our friends at Crop Profit over the next seven days based on Euromodel data. Crop Profit estimates that Corn Belt temperatures will run uh 4.9 degrees below normal. That's U.S. corn areas, and then we warm up a little bit in the uh 8 to 14. Still kind of cool in the uh eastern corn belt, though, however.
SPEAKER_01The U.S.-Iran ceasefire came under renewed pressure yesterday as the two sides exchanged fire. Iran targeted two U.S. vessels transiting the Strait of Hormuz, prompting a defensive response from the U.S. military. Iranian strikes also directly hit the UAE. The situation sent oil prices surging, the uh with U.S. crude rising more than 4% to settle near$106 per barrel. The escalation has reignited, reignited calls for renewed military action against Iran. Under Project Freedom, the U.S. will continue escorting ships through the Strait of Hormuz. However, traffic is expected to remain limited due to safety risks and prohibitively expensive war risk insurance.
SPEAKER_00More back and forth headlines. Um, as I mentioned earlier, crude oil prices, WTI futures are trading very much near the middle of your post-Iran trading range. I mean, we bottomed uh after the initial attack basically at 80 and a half bucks. We peaked at 119 and a half, we're sitting at 103 in change here this morning, right? Or 104 as I speak. So I don't know that we're covering any new ground here. And this is why I hesitate to say that um like yesterday's big rally in soybeans was just was just a crude oil trade. I mean, it had something to do with it, and soybean oil has been leading the way, and uh there is a tie there. But I think you've got you just got a plain old momentum trade going in the row crops, and I think that there is some uh concern, certainly, about the fertilizer thing, although we have really no way of quantifying it right now.
SPEAKER_01If 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 premium videos?
US/China/Iran
SPEAKER_00Pete Meyer was on yesterday. He talked about how farmers have been crying and begging for$5 corn and now they have it. And Pete has some very strong opinions on what you should do with it. We talked about a number of things the funds, fertilizer, uh, USDA, and kind of the mess that that's going on there. Um, I said at the end of the video that I can fix USDA and the data. I could do it if you give me a month. I'm the one, I'm the one that can do it. They won't let me do it, but I can do it. Um, Ryan Moe was on Thursday last week, and it was a really, really great video. Uh, we talked about the basis situation in detail, the big disparity in cash, uh, corn and soybean values from east to west. We got into some super specifics and kind of talked about why it's happening. Ryan's comments about the soybean situation and uh the July NOVE spread and how it relates to the uh operations in South America is super, super interesting. And it's something you need to be aware of. In Five Minute Friday, on Friday, uh Lewis Stearns talked about early soybean planting and yields and how uh this is the way to go. And he's got the statistics to back it up, among other things. It was really great. I'm gonna talk about the funds and corn in uh great detail in today's video. We kind of achieved a benchmark yesterday. We believe that we don't achieve uh very often premium subs. You guys have the uh daily fund tracker chart in your email this morning. Um sign up for the premium deal, guys. It takes you about 30 seconds. You can do it on your phone. I know you're busy, you're in the tractor, it's a busy time of year. You can sign up in 30 seconds, you can do uh credit card, Google Pay, Cash App, all that stuff. Um, I'll forward you a copy of this morning's email. You'll see all of our recent premium videos. You just click to play them. There's no login instructions. Piece of cake. Um, your neighbors are watching this stuff. And if you're not watching it, you're behind. So sign up this morning.
SPEAKER_01The U.S. is urging China to use its leverage over Iran to help reopen the Strait of Hormuz. According to Treasury Secretary Scott Bessent, China purchases roughly 90% of Iran's energy exports, giving Beijing significant influence. Uh, President Trump and Xi Jinping are expected to discuss the situation at their upcoming meeting next week. Meanwhile, China has ordered its companies to disregard U.S. sanctions on private refiners linked to Iranian oil purchases. Bessant said that the new U.S. Navy operation to escort ships through the strait should help ease oil prices, adding that the recent rise in fuel prices is temporary and is expected to subside within weeks or months.
Grain Shipments
SPEAKER_00That's a bold prediction by former U.S. soybean farmer Scott Bessent. Oil prices are expected to subside. Okay. Good luck with that. Um, Trump said on Monday, the more interesting part of this is that Trump said on Monday that he looks forward to seeing China's Xi Jinping on May 14th. Trump said he will remind Xi that the U.S. is leading the world in AI as part of the uh forthcoming trade discussion. And this is important, perhaps. And maybe this is part of the reason that the soybean market is being bought. Maybe the trade believes that China's gonna come in and start buying new crop U.S. soybeans, which they we think have agreed to. They haven't bought any yet. I don't think they're buying more old crop beans, but I'm not gonna say it's off the table. So uh we may know a little bit more about the uh soybean export situation as it relates to U.S. beans, despite the fact that they're drastically, drastically overpriced relative to Brazil. But uh, we're trading politics and not um economics necessarily.
SPEAKER_01U.S. corn shipments easily surpassed pre-report expectations last week. USDA reported that 80 million bushels of corn were inspected for export during the week ending April 30th. The print was up 22% compared to the prior week and up 25% versus the same week last year. Soybean shipments were near the lower end of expectations at 17 million bushels. The print was down 29% compared to the previous week, but up 34% versus the same week last year. Wheat shipments were also near the lower end of expectations at 16 million bushels. The print was up 17% from the previous week and up 5.4% versus the same week last year.
Tyson/Rollins/Packers
SPEAKER_00Corn shipments, uh, very good. I believe that's a seasonal record print. And we could eclipse USDA's already elevated export target for the current marketing year. U.S. corn is competitive, we've got a lot of it, and uh it keeps moving. And these are shipments and not sales, but it's good to see that we're moving. Uh soybean shipments are basically doing what they would normally do seasonally. The problem, of course, is that we never had our big uh kind of highlight window in October, November, December. But guess what? It doesn't matter. The market's around, anyways.
SPEAKER_01Tyson Foods posted net income of$260 million during the first three months of this year, up significantly from$7 million during the same period last year. Its beef division recorded a$240 million loss, driven, of course, by historically low U.S. cattle inventories that have sharply increased cattle costs. Average beef prices rose 12% year over year, while sales volumes declined 13%. And then in contrast, Tyson's food segment generated$505 million in profit during the quarter, supported by a 3% increase in year-over-year sales. Meanwhile, Ag Secretary Brooke Rollins highlighted the extreme level of concentration in the U.S. meatpacking industry yesterday, noting that the administration is moving forward with this investigation of the big four packers in order to protect both ranchers and consumers.
SPEAKER_00Did you listen to the Rollins speech?
SPEAKER_01I did.
SPEAKER_00What do you think anything will come of this?
SPEAKER_01Nope. I think it's just a bunch of talking points. I think we could see more um press conferences. Uh, I don't think anything can will come of it. And um, I think we should probably tone down this rhetoric about going after the Packers. There could probably not be a worse time.
SPEAKER_00Okay, elaborate on that because people people believe, and a lot of people in the cattle industry believe the Packers are evil. The Packers are out to get you, Mackenzie, the cattle person.
SPEAKER_01Right. And I'm not saying that there's never been price collusion, but when the Packers are losing more than$200 ahead, and for once us cattle producers are finally making money, you cannot point your fingers at the Packers. You just cannot do that. Um, I I understand where people are coming from. In the past, there has been suspicious activity, but the we saw the market sell off pretty sharply yesterday. And that's likely because uh traders are concerned now about more uh uh slaughter disruptions because of this announcement, you know, because we've seen packers close plants before because of low cattle numbers. We saw it here in the past few months. We saw it back in 2012, 2013, and we'll likely see it again as the cattle numbers stay low. When you put more pressure on the packers, they're gonna cut more slaughter, and that's just gonna hurt us in the long run.
SPEAKER_00And markets are cyclical, commodity markets are cyclical. You can't cycle a livestock market as fast as you can, like a grain market. Like it's not like a one-year production cycle, but um, it will swing back the other way. Oh and we'll be talking, we'll be talking about the opposite thing. It might be years from now, but you know, yeah, for Tyson as a as a business has not done bad. Their stocks up 17% year to date, they're outperforming the SP um up 23.3 percent over the last year, just barely underperforming the broader stock market. So they're uh don't don't cry for them, they'll be fine.
SPEAKER_01Right, exactly. They're they're plum fine.
SPEAKER_00They so cattle feeder cattle, especially got beat up yesterday. Is that because of anything Rollin said, or was there something else?
SPEAKER_01Uh, I think it was just purely her talking about going to the Packers, go going after the Packers, unless there's something that I'm unaware of. But from what I saw, that was it. And then we also saw losses on Friday. I think we kind of carried over that downward trend.
SPEAKER_00Outside markets this morning. The SP is up 25 points, treasuries are up just a little bit. Uh US, or I'm sorry, we'll say WTI crude down uh two and a half bucks now at 103.94. Have a great day, guys. We'll be back on Wednesday.