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
Trumps's 48-Hour Threat, Iran's Response, Higher Grain Markets
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Futures and options trading involves risk of loss and is not suitable for everyone.
⚠️ Middle East tensions are escalating fast… and markets are watching closely.
🌍 Geopolitics
Trump issues a 48-hour ultimatum to Iran over the Strait of Hormuz—threatening strikes on power infrastructure if it’s not reopened. Iran pushes back, raising fears of broader conflict and long-term shipping disruptions.
🛢️ Energy vs. Grains
Crude oil holding firm despite the headlines, while grain markets slipped Friday. Corn, soybeans, and wheat all pressured by profit-taking, a stronger dollar, and improving US weather outlooks.
📊 Fund Positioning
Funds keep piling into corn (largest net long since Feb ‘25), trimming soybeans, and reducing wheat shorts. Positioning remains a key driver heading into spring.
🌱 Global Ag Developments
China eases restrictions on Brazilian soybeans after recent trade tensions—potentially smoothing export flows during peak shipment season.
⛽ Diesel & Inflation
Diesel prices surge above $5—fueling inflation concerns across agriculture, trucking, and the broader economy.
🐄 Cattle Market
Cattle on Feed report leans bearish with larger-than-expected placements, though context matters vs. last year’s low numbers.
👇 Drop your thoughts in the comments—are grain markets too cheap here?
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SPEAKER_01Good morning, everybody. It's Monday, March 23rd, 5 24 a.m. Central Time. Grain markets are higher across the board this morning. May corn futures up seven and three quarters at 473 and a quarter. December corn futures up seven cents at 497 and three quarters. May soybeans up eight and a quarter at 11.69 and a half. November soybeans up eight cents at 11.49. May Chicago wheat up nine and three quarters at 6.05. May Kansas City wheat up eight and three quarters at 615. May Spring wheat up nine and three quarters at 637 and three quarters. Mackenzie, believe it or not, a lot of people who watch our channel are not subscribed to the channel. Isn't that shocking?
SPEAKER_00That is absolutely shocking.
Iran, 48-Hour Warning
SPEAKER_01YouTube tells me that about half of our viewers have not subscribed. Um, so like out of the people who watch, it's like the same percentage as people who respond to USDA surveys. That's who subscribed. It's like it's like about half ballpark. So, guys, do us a favor. We're always going to be a small YouTube channel, but but help us out. We're closing in on 34,000 subscribers. Uh, hit the subscribe button today. Okay, that's it for my shameless uh plug. We'll do another shameless plug later, but that's the first one. Um, let's start off with Iran.
SPEAKER_00All righty. So on Saturday, President Trump issued a 48-hour ultimatum for Iran to reopen the Strait of Hormuz. If the strait is not reopened during that time frame, he threatens strikes against Iran's power infrastructure. The statement marks a sharp escalation in rhetoric, following comments a day earlier that suggested the military operation could be scaled back. Tehran has shown no signs of backing down and has instead threatened to target U.S. and Israeli infrastructure in the region in response to any attack. According to analysts, even if the strait reopens, shipping would likely remain limited as the ongoing war would deter vessels and restrict the availability of insurance coverage.
Grain Price Action
SPEAKER_01Trump once again running the world from his truth social account. So Friday, this was right after the futures markets closed, he posted this. We are getting very close to meeting our objectives as we consider winding down our great military efforts in the Middle East with respect to the terrorist regime of Iran. So right after the close on Friday, people were like, oh man, crude's gonna open, you know, 10 bucks lower on Sunday night because the war is de-escalating. Then he comes out with the 48-hour thing, I believe, on Saturday. If Iran doesn't fully uh open without threat, the Strait of Hormuz within 48 hours, from this exact point in time, the U.S. will hit and obliterate and obliterate their various power plants, starting with the biggest one first. So then we kind of re-escalate. The 48 hours, I believe, would expire tonight at six or seven o'clock, whatever. Um, and then you've got this guy, this is the Iran uh Parliament speaker. This is translated on X. He said this immediately after the power plants and infrastructure in our country are targeted, the critical infrastructure, energy infrastructure, and oil facilities throughout the region will be considered legitimate targets and will be destroyed in an irreversible manner, and the price of oil will remain high for a long time. So uh this morning, crude opened like almost flat last night. It was not very exciting, and the May WTI contract is now up a dollar at 99.30. So there is no de-escalation. Um, the uh escalation or tensions very much continue into this week, and I think that that's probably why we've got higher grain markets to start, generally speaking. There's still a ton of concern about the fertilizer issue. There's just general uh speculative buying because grains have performed so poorly relative to crude. Let's go and talk about uh grain price action.
SPEAKER_00So grain and soybean futures ended the week lower on Friday. The May 26 corn contract lost roughly 4 cents to close near 466 per bushel, while the May soybean contract fell about 7 cents to settle near 1161 per bushel. The pullback was driven by profit taking and technical selling. Wheat futures were sharply lower. The May 26 Chicago wheat contract fell nearly 13 cents to settle near 595 per bushel, and the May Kansas City wheat contract lost 21 cents to close near 606 per bushel. Uh, wheat futures were pressured by the U.S. dollar gaining strength and forecasts calling for potential rainfall across the U.S. Southern Plains.
The Funds
SPEAKER_01The rainfall that's in the forecast for the U.S. Southern Plains is in like the 12 to 16 day period for the HRW uh wheat areas in the United States. That's far from a guarantee. Of course, these extended forecasts are always subject to change. Let's look at some charts. December corn futures are up 52 cents or 11.7% from their January low. And we're within a penny or two of those highs that were posted a couple of weeks ago.$5 is a big like psychological level. There's probably a lot of farmers selling uh, you know, in this 497, 498, 499 neighborhood. Certainly at the$5 level is going to be kind of a big hurdle. Uh soybeans, November contract are up 92 cents per bushel or 8.7% from their December low. Not quite back to the highs, but acting a little bit better here the last three or four trading sessions. Here is July HRW wheat. It's up$1.02 per bushel or 19% from the December low. So believe it or not, wheat has been the best actor here as of late. Now I'm going to show you a crude oil chart and the same statistics just for comparison. Uh the May WTI crude contract is up$43 per barrel or 77% from the December low. So three of these things are not like the other. Crude's up 77% from its December low. And then you got wheat up 19%, you got beans up less than 9%, corn up 12%. Um, I know that you guys, if if you're a farmer, like the percentage changes don't necessarily mean a whole lot to you. But I think for large speculators or fund traders out there, I think the percentages do mean something. I think that they're sitting here looking at um a drastically uh changed crude oil market. It's rallied 70 something percent. And you got grains and and other commodities that have not performed as well. And they're saying, hey, wait a minute, look at the statistical comparison here. Maybe we need to buy some other commodities because of a pending inflation event or because of the fertilizer situation, or be there's a lot of reasons right now. Um, a lot of them are not necessarily fundamental in nature as it relates to supply and demand, but there's a lot of reasons. Uh, let's go to the funds.
SPEAKER_00So the CFTC, of course, released its weekly commitment of traders report on Friday for the weekending Tuesday, March 17th. Large money managers were net buyers of 32,000 corn contracts. The net long position of 231,000 contracts is the largest since February of last year. The funds were net sellers of 16,000 soybean contracts. And lastly, the funds were net buyers of 9,000 SRW wheat contracts on the week. The net short position of 12,000 SRW wheat contracts is the smallest since July of 2022.
SPEAKER_01At Friday's close, private groups estimated that the funds were net long, 270,000 contracts of corn, 200,000 contracts of soybeans, net short still, 12,000 contracts of SRW wheat, net long 12,000 contracts of HRW premium subs. You guys have the full version of the fund tracker charts in your email this morning. For the rest of you, I did this. We combined corn soybeans and SRW wheat, the net fund positions. It's 414,000 contracts to the long side. This is still quite a bit shy of the of the 2012 record, which was 626,000 contracts to the long side. In order to hit that sort of number, what you would need to see is more buying in the corn market. We're not close to a record. Funds are already pretty aggressively long soybeans. You don't need to see a whole lot more there. And you would need to see some buying in the wheat market. And funds, of course, are still net short SRW wheat, but this is becoming a pretty aggressive uh net long position across the grain complex.
SPEAKER_00If you guys have not checked out our premium content, you sure need to do so. Joe, can you tell our viewers about some of last week's premium videos?
SPEAKER_01Jim Urio is on Friday. He's a fan favorite. Jim has been a professional interest rate trader at the Board of Trade for 30 years or maybe more than that, maybe 40 years. Um, but he comes on every couple of weeks and talks to us about interest rates, about inflation. In this instance, of course, Iran and gold. He talks about his personal investing and trading. He talks about what he thinks the headlines mean. And uh he just does a really fantastic job of keeping our crowd up to date on things that are going on outside of the grain markets. And he actually threw in his grain market opinions in uh this particular video, given that uh they've kind of are starting to make some headlines out there. Uh McKenzie and Ross Baldwin did the monthly cattle outlook on Thursday. Are the Packers gaining leverage? Are they? You can't actually tell that you can't you can't say.
SPEAKER_00Yeah, you can't say for sure. Um, Cash Captain.
SPEAKER_01You have to watch the video.
SPEAKER_00Yeah, you have to watch, yeah, you have to watch the video.
Diesel and Inflation
SPEAKER_01If you're in the livestock business and you listen to our show, you should still sign up for the premium stuff because a lot of what we do still ties back to you. And honestly, the this video is worth 50 bucks. So you should sign up just for that. If you want to see the premium stuff, guys, 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, just a ton of content from us every single business day. Give that deal a shot this morning.
SPEAKER_00Rising diesel prices are driving up costs across the U.S. economy. Last week, the national average price of diesel surpassed$5 per gallon for only the second time on record. The increase has been driven largely by the closure of the Strait of Hormuz, which has caused crude oil prices to surge. Diesel is a critical input across the economy, powering much of the U.S. supply chain, including agriculture, trucking, and construction. As costs rise, many companies are passing the added expense on to customers. The situation is expected to contribute to broader inflationary pressures and have widespread economic implications.
China/Brazil
SPEAKER_01Yep. Inflation is going to be a conversation once again. Um, this is uh current, this is as of this morning. Uh national average gas price creeping up to 396 per gallon, uh, diesel price 529 per gallon. And of course, you've got some of the uh high-tech states and other places where prices are quite a bit higher than that. Brian Split talked a little bit about this on Friday. The uh crude oil trade, which is the most heavily discussed, but then the idea or fact that you've had uh an even greater surge in prices in your products, your Arbob unleaded futures, your uh heating oil futures, and heating oil futures are very close to like a farm diesel type product. Heating oil futures are up 126% year to date. Arbob unleaded is up 98%, 97% year to date, to WTI crude up 74% year to date. So the products are leading the way. I pulled this this morning. This is some chat GPT garbage, but um these are the the these are the actual projections for your March CPI print. JP Morgan says we're gonna be 3.5%, Golden says 3.2%, Vanguard says 2.8, Wells Fargo says 3.4%, uh general consensus 3.3% for that March CPI print that will be out on April 10th. And that these would all represent sharp increases because the last print, I believe, was 2.4. So um this is a big inflation spike, and this is going to be it's just it if if it sticks around and this is what you see and it persists and it moves higher, this is going to be a big problem for the White House. It's gonna be a big problem for the consumer. Um, it's just it's just a big problem.
SPEAKER_00China has eased inspection requirements that were recently imposed on Brazilian soybean shipments after uh Chinese authorities detected issues with the shipments. Uh, the nation will not enforce a zero tolerance policy for the presence of weeds in the shipments. The move follows Brazilian officials traveling to China last week to negotiate the stricter requirements implemented at Beijing's request.
Cattle on Feed
SPEAKER_01Uh, not surprising at all. We knew that they would get along eventually, and and Brazil and China are tied pretty closely with this stuff. Brazil's got this monster soybean crop. China's the biggest importer. It makes sense that uh they should be friends and get along, and this is kind of what we expected.
SPEAKER_00We had a Catalon feed report come out on Friday afternoon as of March 1st. Catalon feed totaled 11.51 million head, down slightly from a year ago, and in line with pre-report expectations. February placements were reported at 11.61 million head, 4% above last year, and 4% above expectations. Marketings last month came in at uh 1.52 million head, down 7% from last year, and largely steady with expectations. Traders will likely view the report as bearish due to the larger than expected placement number. However, it is important to note that placements in February of last year were 18% uh lower compared to February 2024. So while last month's placement increase is notable, it should be viewed in the context of last year's weaker placements.
SPEAKER_01So when you say bearish, you mean bearish relative to expectations. But does this is this a trend changing report?
SPEAKER_00Like no, it's not a trend changing report. I think there might be like a little bit of a knee-jerk reaction, but we still have the strong fundament fundamentals and all of that going on.
SPEAKER_01Still a picture perfect uptrend on on the monthly live cattle chart. It's it's very, very good. And you could drop 25, 30 bucks and still maintain this long term multi year uptrend. Um, outside markets this morning, guys, the SP is is off and uh it's down 52 points, which is about eight tenths of a percentage point. The Dow's down 325. Treasuries are off, US dollar is higher, crude oil again is now up 48 cents in the May WTI 98.67. Have a great week, guys. We'll be back on Tuesday.