Tentative US-Iran Peace Deal Reached!

Joe's Premium Subscription: www.standardgrain.com

Grain Markets and Other Stuff Links —

Apple Podcasts
Spotify
TikTok
YouTube

Futures and options trading involves risk of loss and is not suitable for everyone.

🌍 Geopolitics
🤝 The U.S. and Iran reached a tentative deal to end the war. The agreement includes releasing $25B in assets and lifting oil sanctions, while Iran commits to no nuclear weapons.
🚢 Iran will reopen the Strait of Hormuz within 30 days, and the U.S. will lift its naval blockade. More details are expected in follow-up talks, with the deal set to be signed Friday.

🌽 Grain Markets
🟡 Soybeans slipped (Nov ’26: $11.32, -2¢) under pressure from good weather and weaker crude.
🌽 Corn rebounded late (Dec ’26: ~$4.40, +1¢) but still faces headwinds from energy markets, favorable weather, and big South American crop expectations.
🌾 Wheat also moved lower on ample global supplies.

🌦️ Weather
⛈️ Severe storms swept the Corn Belt over the weekend, bringing heavy rain, damaging winds, and tornadoes. Some areas saw flooding.
🌡️ Temps stay above normal this week (not extreme), with more scattered rain ahead—heaviest in central and eastern areas. Overall tone remains bearish for grains.

📊 Funds (CFTC)
🐻 Funds turned net short corn (sold 121k contracts), the largest sell-off since May ’25.
🌱 Soybean longs shrank (sold 58k), now the smallest since February.
🌾 Wheat also saw selling (23k contracts).

🥩 Cattle
🏭 JBS is closing plants in Pennsylvania and Memphis, shifting cattle elsewhere.
🐄 With the herd at a 75-year low, tight supplies are driving record cattle prices and heavy packer losses.
⚖️ Short term: too much capacity vs. cattle. Long term: less capacity is negative for the industry.

Transcript

Preliminary US-Iran Peace Deal/Crude

SPEAKER_00 0:08

Good morning, everybody. It is Monday, June 15th, about 5 28 a.m. Central Time as I speak. Joe is still on vacation, so I have Brian Split joining me here this morning. Good morning, Brian. How are you this morning?

SPEAKER_01 0:22

Good, Mackenzie. I'm great. How are you?

SPEAKER_00 0:24

Fantastic. So this morning, we are going to start off with some news out of the Middle East. It appears that the U.S. and Iran have reached a tent to end the war. According to officials, under the terms of the deal, the U.S. will release $25 billion in frozen Iranian assets and lift oil-related sanctions. In return, Iran has committed to not developing or acquiring nuclear weapons going forward. However, no official text outlining the details, the exact details of the agreement has been released. Negotiators are expected to discuss additional details regarding Iran's nuclear program during follow-up talks. A key component of the agreement is Iran's commitment to reopen the Strait of Hormuz within 30 days, while the U.S. will lift its naval blockade in the waterway. The deal will be officially signed on Friday over in Switzerland. So what are your thoughts on this tentative deal? Do you think it's actually going to hold? And what does this mean for the markets?

SPEAKER_01 1:26

Yeah, I don't know. I'm not uh experienced enough or wise enough to know whether this will hold or not. Um, but like you had mentioned, there is nothing uh, you know, uh uh agreed to on paper as of yet. It's supposed to be signed Friday. There was also talk that the strait could be open as early as Friday. Um, so it's really not for me to say whether I think it's gonna uh stick or not. It's more the market telling us whether it might stick or not. And um the crude oil market had uh very distinct level that we were holding really through the whole month of May into early June. And uh we had broken down uh below that support on Friday in anticipation that this news could be coming. And then we had actually gapped lower from Friday to last night's trade. Uh so that's illustrated with the uh the little circle uh in between Friday and and last night, which is today's bar. Now, uh the way I have this drawn, um there is a gap uh that was back from late February, and that would be uh the war gap, right? So as the war was getting started and eventually culminated with that quick spike. Um that is still a target potentially for this market to want to go back and fill that. Um so when we look at this potential pattern, um, I have it drawn as a uh descending triangle, uh, which is generally where you would have a flat base of support at a level over and over and over. Uh, but yet above that flat base of support, you have a downtrend that's developed. Um, and so you could also look at that as potentially kind of a wonky head and shoulder where there's a high made in April that would be a left shoulder, and then the late May highs could be your right shoulder. Uh, it really doesn't matter what you want to call it because the measurement to the downside would be the same objective. Um, and that would be right back down to that war gap. Uh so you're talking down uh just about $67 a barrel. Um, and so this chart, uh I believe with the snapshot was taken last night. And uh we do have futures trading uh just above $40 or just above $80 a barrel right now after having traded slightly below it. So uh prices really didn't get materially worse from last night to this morning with any additional uh news coming out.

SPEAKER_00 3:45

Right. Do you think we're gonna have to see something on paper written um for us to see more of a drop in the crude oil?

SPEAKER_01 3:54

Um I think the eventually the market's gonna want to see uh real evidence that the strait is going to be opened. Um so there, you know, that's going to be a process. And of course, uh a piece of paper with signatures on it from both sides is going to help that belief. Um so you know, come Friday, uh, should there be a uh a signed document between both countries agreeing to uh everything that's been stated, then uh that is going to be an initial step to get the straight open. Uh, but it'll be interesting because we do have another long weekend. So we're not gonna be trading on Friday, McKenzie. That's gonna be Juneteenth. So the ag markets are gonna be closed. And so if this signing does occur on Friday, uh we've got a long weekend for the grains to uh to uh go through before we're gonna see

Grain Price Action

SPEAKER_01 4:42

how crude oil then again opens up on that Sunday night into Monday and how that might affect grain trade.

SPEAKER_00 4:48

Right. And on to uh price action in the grain markets. Soybean futures edged lower on Friday with the November 2626 contract falling two cents to close at 1132 per bushel. Futures were weighed down by favorable weather forecasts and softer crude oil prices. Corn futures opened lower, but rebounded into positive territory by the close with the December 26th contract rising a mere one cent to settle near 440 per bushel. Corn futures uh continue to face headwinds from declining crude prices, favorable weather, and expectations for large South American crops. Wheat futures also closed lower on the day, pressured by ample global supplies. Um, would you mind elaborating on the recent price action that we have seen in the corn and soybean market?

SPEAKER_01 5:33

Right. So uh, you know, uh anybody that's been following corn um knows that this break here from the uh middle to late part of May to where we are currently has been uh extremely aggressive to say the least. And um one of the things that we talked about, McKenzie, on the premium content uh from the chart perspective was the double top in July, corn at 487.5. There was a March high, and then there was a May high at that same price. And the low that was scored in between uh those two highs was the April low at 448 and a half. So uh all you really do on an effort of a double top uh to give you the downside potential objective is you're taking the distance between the two highs, measuring that to the low, and then extending that distance through the low. So uh the extension tool does the math for you. That gives you a 409.5 downside objective for the double top. So that objective has been met. Uh, we've got uh what would be kind of our cycle low to cycle low. So we made a major uh low in August of 2024, and then we had another secondary low in August of 2025. Now, these are those lows for this particular contract. When we think about where front month corn was uh at uh those given times, uh we were trading in in the 360s at that at those moments, but this is the July 26 and those particular uh low events. And so cycle low to cycle low, if you draw the line from one to the next, we're right about there as well at that lower uh support line. So we do have, if we were to look at a continuous chart for corn, uh there is a gap to fill at 405 and a quarter from the expiration of the September 2025 contract, and then the December became the front month at that point. That did leave a price gap at 405 and a quarter. Uh so that might be another um uh objective for this market to try and test in the short term since we are so close to it. Uh, but I will say that with the uh angle of that downtrend line, um, that is not sustainable. Uh we should be trying to figure out short term where this market's going to catch uh before uh at the very least consolidating into the report at the end of the month where we're gonna have another uh look at at uh acreage and uh quarterly stocks. So this market should be uh at some point here trying to figure out where value is. Now uh one of the comparisons we did to 2024 showed that by the end of June two years ago, we had essentially gone from 4 uh 90 uh or I'm sorry, um the uh the the high in June uh was eventually uh made a low in June at the end of the month at 390 and a half. So uh and that was a comparable year as far as where we made highs on a front month basis. So we're coming from about the same spot as 2024. And if we do break down below this channel line, that 390, 150% extension would technically be the next major objective. Uh so on to soybeans here, McKenzie. Uh so here's a major difference is that um that corn chart was a downward trend, right? So we could go all the way back and those 25 lows, uh, then we made or uh the early 24 lows, and we made lows in 25. Uh, and it's been a downward trending uh uh market for the last couple of years where we made some lows in 2024 in soybeans and and we've really been trending higher over the course of that period. Now, the bulk of the price action for the most part initially has been inside of this upward trending channel. And uh when we made some highs back in fall, we spent a little bit of time um uh above the upper channel line. And then as we were making this general move in March, April, and May, uh, we spent that whole period uh above that upward channel line. Uh, but it's really interesting to see in both instances when we failed back into the channel, we immediately went back down to the low end of that channel. And so we are revisiting some support uh where we've got old highs that were made in June, August, and September of 2025 in this general 1110 area. Um, there was a high that was made in January at this 1110 zone, and then we've got that uptrend support. So uh if this market were to break down really uh uh below the 11, 11, 10 zone, take out the uptrend, take out those old previous highs, uh then unfortunately we're just back in a trading range previously where uh by and large 1060-ish might have been really the low end of that range, and then that 1110 was the upper end of the range. So uh we we definitely want to see July soybeans on a front month hold the $11 zone uh below that, we might be looking at mid-10s. Uh, if we can catch here, then maybe at the very least, we're gonna go and take a look at that short-term downtrend. Maybe that gives us $1,1150 in the short term. Uh, but uh the negative crude oil price action is not gonna be something that helps that occur. And um, if the soybean oil market, which has been probably the most elevated agricultural commodity that's yet to be out there, uh, if that

Weather

SPEAKER_01 10:44

takes a cue from crude oil in the short term, then that's gonna be another uh potential layer of negativity to weigh on the soybeans.

SPEAKER_00 10:51

On to weather. Severe weather uh swept across the U.S. Corn Belt over the weekend. Large portions of the area, including Illinois, Indiana, Iowa, and Missouri, received received substantial uh rainfall along with damaging winds. In some areas, excessive rain led to localized flooding and multiple tornadoes were confirmed across the region. Looking ahead, temperatures are expected to remain above normal this week, though the heat is not forecast to become extreme. Rain is also in the forecast with the heaviest amounts expected across uh the central and eastern regions. Uh, despite the continued heavy rainfall across the region, um, is this still a bearish outlook for the grain markets?

SPEAKER_01 11:36

Um, it is still right now, uh, as we get rain. Um, the tough part uh about rain is that very delicate dynamic between when is it too much? And um, you know, all I can use is previous experience with the market and you know, really recollect previous years where there was substantial moisture in the corn belt. And I, you know, always get drawn back to 2019, and it was very wet that year, and uh it was wet to the extent that our company, which was just getting started, had hired uh airplanes to fly the corn belt and take pictures of of where ponding was and how widespread it was. And so we were really in tune with how wet it was that year, and it took the market a long time to care. So sometimes when we're so uh hypersensitive, because this is all we look at, the grain markets, um, we we feel like, all right, this is too wet and and the market should be going up right now. But sometimes the big money takes a little bit to make that decision. So um I don't know at what point the moisture uh then becomes a bullish story, but we always have to keep our minds on the net effect of okay, what is this rain doing? Is it doing

CFTC COT

SPEAKER_01 13:00

more good than bad? And generally uh that is going to be the case unless we really start to see ground underwater stay underwater.

SPEAKER_00 13:08

On to the CFTC. Uh for the week ending Tuesday, June 9th, large money managers were net sellers of 121,000 corn contracts. This is the first time the funds have been net short the corn market since late February, and the largest sell-off since early May 2025. The funds were also net sellers of 58,000 soybean contracts. The net long position of 98,000 soybean contracts is the smallest since early February. And then lastly, the funds were net sellers of 23,000 SRW wheat contracts on the week. Uh, what are your thoughts on this massive sell-off that we saw across the grain markets last week? And is this a trend that we'll likely see spillover into this week?

SPEAKER_01 13:50

Well, so um we have that seasonal tendency, right? Where uh we did make highs in May in uh corn, soybeans, and wheat. Um generally the liquidation in corn will be more aggressive initially than in soybeans. Uh, often, if you look back at highs that have been made over the years, uh the high might be made uh earlier in corn, uh, and then the break will be a little bit more aggressive in corn to start, but then soybeans will catch up, and when they do catch up, it can be pretty scary. So now we've got a fun position that for all intents and purposes is flat. Um, it does have a small negative number in front of it. But what that means to me is that uh big picture, unless the general narrative of the market changes and we start to focus on something else, the um the general good weather and the thought that uh we'll have a at least a trend crop will keep weight on the market, uh, and that will continue to uh bring sellers in on bounces. Uh, and I would expect that the eventual outcome would be that by the time we get to late July, middle of August, you're gonna have a fun position in corn that it's going to be uh likely heavily short. Um, and then over the course of late June into uh July, we're gonna see the soybean market shift from being long uh to then potentially being back to flat. Uh and then if we do find them slightly short soybeans as we get into the later part of July or middle part of August, um, then we're likely to see uh a little at least a little bit of stalling of that price action. But um I think the uh the next uh 30 to 45 days in grains could be pretty rough if there's not a uh generalized uh uh change in sentiment towards weather, especially if if the uh leading story here that we talked about with the Middle East, if that does come to fruition

JBS Plant Closure/Cattle

SPEAKER_01 15:51

and a deal is signed on Friday, then we're definitely losing that supportive element from the energy market as well.

SPEAKER_00 15:57

On to our last story for the morning. Uh JBS is planning to shutter a beef processing plant out in Pennsylvania. The facility employs roughly 1,700 people and has a slaughter capacity of about 2,000 head per day. While relatively small in terms of volume, the plant is one of the meat giant's largest facilities out on the East Coast. Cattle from that plant will now be shifted to other JBS facilities. The Meat Giant is also planning to close a value-added processing facility in Memphis, Tennessee, which employs about 200 people in the long term. The loss of processing capacity, of course, is negative for the industry. Meanwhile, in the sheet in the short term, uh, the industry is still oversupplied with slaughter capacity relative to the limited availability of cattle. Uh, with our domestic cattle herd currently sitting at a 75-year low, do you think this is a trend that we'll continue to see more plants being uh closed across the nation?

SPEAKER_01 16:53

I hope not. Um, I sure hope not. Uh that would be a that's a bad trend to uh, but you know, the uh there would then becomes a way to uh bring in some smaller competition. Uh hopefully that is an outcome that occurs, is that we see more localized, smaller operations that develop. Uh maybe, you know, but I I'd like to hear your thought on this, Mackenzie, because you definitely think about and are involved in cattle much more than I.

SPEAKER_00 17:16

Yeah, well, we saw this happen about 10 years ago, back 14, 15, you know, when our cattle numbers got so low. And um, in my opinion, it's devastating for the industry because these plants close and they rarely come back online. And then when we ramp our numbers back up, you know, we don't have uh the hook space. And then it gives the Packers all the leverage back. Um, so I it's it's every plant that closes, even if it's small. I mean, this is this is big out on the East Coast, but you know, here in in the in the middle of America, it's pretty small, but um still every every hook you lose is detrimental going down the road because everything is cyclical. Our cattle numbers will eventually come back. Um, and right now everything sits good and pretty, but in the long term, um, it's a it's a bad look for the market.

SPEAKER_01 18:03

So when the sentiment does change to the cattle inventory not being as tight, and eventually we do start to expand it, the lack of hook space and uh uh capacity then kind of backs the animals up down the road and creates more of a bearish environment when it does get bearish, I guess is the the long-term outcome of this.

SPEAKER_00 18:23

Yep, exactly. And then you you you mentioned like smaller players coming in the game, smaller packers coming in the game. And in theory, that's that's a great plan, but there's so many regulations. And time after time, we've seen these big packers, the big four, choke out the smaller packers um in the long run. So yeah, it does open the door for smaller competition to come in, but when down the road the pat the larger packers are usually able to choke out those smaller packers. So it's um it's a tough situation to say the say the least.

SPEAKER_01 18:52

Well, I wish we could fade the video out with some Cindy Lauper with some time after time.

SPEAKER_00 18:57

That's it.

SPEAKER_01 18:58

That's it. All right, I'm done talking.

SPEAKER_00 19:02

Well, that is all we have for you guys this morning. Everyone, have a fantastic Monday, and uh, we will be back tomorrow.