Corn Belt FROST, $5 Dec, Deep Pockets LOVE Soy Complex

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.

🌽 Frost risk is rising across the Corn Belt this week as temperatures trend below normal, particularly in northern areas. Heavy rain is also expected to slow planting progress. Storm systems are forecast to bring rainfall across the central and southern Plains, though wheat yield damage in those regions has likely already occurred. The Northern Plains remain mostly dry but face below-normal temperatures and freeze potential. 

📈 Corn futures rallied Friday on rising fertilizer prices tied to the Iran war, which traders fear could reduce yields. The July '26 contract gained nearly 6¢ to settle near $4.80/bu, while the Dec '26 contract traded above $5.00/bu for the first time this year. Cold, wet conditions across the central and eastern Corn Belt added to bullish sentiment. Soybeans and wheat also closed higher. 

📊 CFTC Commitment of Traders (week ending Apr. 28): Large money managers were net buyers of 83k corn contracts — the net long of 266k is the largest since late March. Funds were net sellers of 11k soybean contracts. SRW wheat saw net buying of 20k contracts, pushing the net long to 12k—the largest since June 2022. Managed money also holds a record net long in spring wheat and is near-record net long soybean oil.

🚢 Iranian grain imports have collapsed as vessels idle at sea rather than risk transiting the Strait of Hormuz amid the US blockade. War-risk insurance costs are prohibitive. Iran, heavily dependent on imported feed grains for its meat and dairy sectors, is seeing staple food prices surge — eggs up 118% and bread up 80% since the war began. Rerouting attempts have not offset lost volumes. 

🇲🇽 Mexico replaced its agriculture minister. President Sheinbaum named Columba López Gutiérrez to replace Julia Berdegué, who moves to an advisory role as the US, Mexico, and Canada review the USMCA ahead of a July 1 deadline on whether to extend the agreement 16 years or let it expire. Berdegué had also been leading New World screwworm talks with the US — an issue with little improvement. Mexico is the largest buyer of US corn.

🌽 USDA flash sale: US exporters sold 148,240 MT (≈6 mil bu) of corn to unknown destinations — 78,240 MT for 2025/26 delivery and 70,000 MT for 2026/27 delivery.

Transcript

Attack on US Vessel?

SPEAKER_00 0:08

Morning, everybody. It's Monday, May 4th, 5 24 a.m. Central Time. Grain markets are mixed to higher this morning. December corn futures up three and a quarter at 5.02. November soybeans up seven and a quarter at 11.90. July Chicago wheat up three and a quarter at 6.41. July Kansas City wheat down a half center. I'm sorry, down five and a half cents at 7.25.5. September spring wheat down four and a quarter at 7.17 and a half. Before we get started, there was a headline that was breaking as we were about to hit record this morning. Uh, there is an Iranian news agency indicating that missiles hit a U.S. naval vessel in the Strait of Hormuz after it ignored warnings. So we had a spike in crude oil. Crude's up five bucks at uh 107 in the June WTI. We saw the stock market back off a little bit following this headline, or maybe lack thereof. It hasn't been confirmed by the major wires. It'll all be different by the time you guys see this, but that's what we know as of right now. Grain markets caught a little bit of a bid off of that. So uh we'll probably talk about that tomorrow morning if it's real. Let's start off this morning with uh weather across the corn belt.

SPEAKER_01 1:12

So frost is likely across the corn belt this week, as temperatures across the region are expected to trend below normal. Parts of the region are also forecast to receive heavy rain, which could slow planting progress. Meanwhile, multiple storm systems are expected to bring rainfall across the central and southern plains. With cold temperatures moving in midweek, frost potential will increase throughout the area. The northern plains are also expected to see below normal temperatures, raising the risk of frost and freezes. And the area is also forecast to remain mostly dry.

$5 Dec Corn, Price Action

SPEAKER_00 1:46

Let's take a look at some maps from our friends at crop profit. This is uh weather or temperatures, minimum temperatures versus normal over the last three days, so just over the weekend. Most of the corn belt was seven to nine degrees below normal on average. And there were some places that saw frost or freezes of freeze events. The next seven days is going to be more of the same, uh, talking five to ten degrees below normal, generally speaking, in terms of average temperatures. This is just a snapshot of one colder day in particular Wednesday. You're supposed to see some lows in the 30s and even upper 20s in parts of Minnesota, Wisconsin, North Dakota, South Dakota, uh, Michigan. It's really not until the 8 to 14 that we start to see some more normalized temperatures. So there has been some talk of, I guess we can call them delays now in some areas of the country where it was wet and now it's turned cold and it's just been very difficult to get going. Some guys are planting into these uh colder conditions. We'll see how it all works out. Um, it's very region specific. So if you guys have specific information about what's going on in your neighborhood, uh drop us a comment in the uh YouTube videos, or you can email me info at standardgrain.com. As far as precipitation goes, the weekend was pretty dry across most of the corn belt, and you've got some rain that will return to call them southern and eastern areas of the corn belt by Tuesday, Wednesday. So, you know, places like um eastern Iowa as an example, they were pretty wet and they're gonna dry out, but it's still gonna be cold for another week. Um, and then you've got these areas of, you know, Missouri and southern Illinois, parts of Indiana, that are gonna see some additional rainfall. I'll be curious to see if any sort of uh additional delay occurs there. We'll see a crop progress report from USDA this afternoon. Uh Southern Plains, yeah, there's a little bit of rain in the forecast for the western HRW wheat areas by Tuesday, Wednesday. I'm not sure if this is gonna be too little too wait as it relates to that crop from uh my sources on the ground. Yeah, it's gonna be too little too weight. So we'll see what uh happens there.

SPEAKER_01 3:48

Corn futures rallied on Friday with the July 26th contract gaining nearly six cents to set on their 480 per bushel. Notably, the December 26th contract traded above$5 per bushel for the first time this year. The gains were driven by concerns that sharply higher fertilizer prices tied to the Iran war could eventually reduce yields. Additional support came from cold, wet conditions across the central and eastern corn belt, which have slowed planting progress. Soybean and wheat futures also closed higher on the day.

Funds LOVE the Soy Complex

SPEAKER_00 4:20

Before we go to the charts, I've made this observation, or I'll make this observation: the fertilizer story has reached a fever pitch or pretty close to it. It's like people, people in media that you have never ever heard talk about commodities or grains or agricultural production are now talking about fertilizer. And there's all sorts of like call it fear-mongering out there about the fertilizer situation. Oh my gosh, this percentage of farmers has no fertilizer and they're they're making it sound like there's going to be some sort of famine or something. That's not the direction that we're headed. But I hope that uh large money managers and those people with deep pockets are listening and paying attention to every word because it is helping our cause, I believe. December corn futures trade above$5 this morning. And this is for a lot of you guys, this is like all you've asked for for the last three years. Hey, just give me$5 corn to market. That's all I want. And it's here, but it's it's not quite maybe what you thought it would be because your production cost, depending on whether or not you booked fertilizer or what you paid for it, what you paid for nitrogen, maybe this works and maybe it doesn't. My understanding is that the majority of U.S. corn growers had their uh nitrogen needs booked, uh prepaid in in some way, shape, or form prior to the uh initial attack on Iran. So it's it's gonna be different for everybody. But um, this could be some sort of opportunity. This is this is a number you guys have been looking for for a while. November soybeans posted fresh highs overnight again. There's some really interesting stuff and some really interesting dynamics that I really can't go into detail here on. But premium subs, if you didn't watch Friday's premium video with Ryan Moe and watch it toward the um, it was like the 20-minute mark where we started to talk about soybeans, the Nova July spread, and and what's going on in South America, you've you've got to watch that. It's like very important stuff. Uh, wheat market has backed off a little bit. We posted fresh highs on Wednesday last week and then we set back a little bit. So um, I mean, all the markets really acting pretty darn well.

SPEAKER_01 6:18

The CFTC released its weekly commitment of traders report on Friday for the week ending Tuesday, April 28th. Large money managers were net buyers of 83,000 corn contracts. The funds were net sellers of 11,000 soybean contracts. And lastly, the funds were net buyers of 20,000 SRW wheat contracts on the week. The net long position of 12,000 SRW wheat contracts is the largest since June 2022.

SPEAKER_00 6:42

This is getting to be a hefty net long position in the corn market. Uh, the way I phrased it in the email this morning, the funds are 65% of max net long if we're to compare Friday CFTC data to the record net long of 400 and 9,000 contracts from February 2011. Um, when you combine corn soybeans and SRW wheat, 454,000 contracts net long, the record net long from 2012 is 626. There's some versions of this chart where um people took like these three contracts, but then they also included soybean oil and soybean meal, and it takes you to like a record or mostly record net long position. I don't love that version of this because I feel like it's redundant. I feel like throwing soybeans, meal, and oil all on the same chart is like it's it weighs too heavily toward the soybean complex. And we'll talk about that in a second. That's just my my personal opinion. Data is data, you can do whatever you want with it. Um, commercials, the CFTC producer, merchant, processor user category are heavily net short. This is the other side of the trade. Um, commercials are short a lot of corn. There's been a lot of farmers selling into this rally of both old crop bushels and new crop bushels. So the funds, um, the funds, traders love the soy complex. When you compile when you combine soybeans, soybean meal and oil, they're basically record net long, 462,000 contracts. I think it peeled back just a hair this week. Um, why is that? We've been told that the global fundamentals are very bearish. Brazil's got this monster crop on hand. I think that the funds and large speculators have chosen to focus on the US situation rather than the global or export situation. And you can visualize that here in this chart. Um, we now crush a lot more beans domestically than we export. That's the bigger piece of the demand base. We've got some very positive RVO numbers out that are going to support soybean oil usage for renewable fuels. And I think that the well, the the trade had been so focused on, some traders had been so focused on this monster Brazilian crop. And oh, we've got a trade war with China. It appears as if large money managers are focused on um, you know, we've got potentially just a grain trade here going on amid the fertilizer situation, although that's not really specific to soybeans necessarily. It's more of a corn wheat thing, but we've also got this RBO stuff, we've got this biofuel stuff, and they're they're trading that rather than um the big Brazilian crop. The funds are record net long spring wheat, not record long HRW wheat where we've got the crop problem. They're record net long spring wheat, which is um very interesting.

SPEAKER_01 9:13

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 last week's videos?

Iran Grain Imports

SPEAKER_00 9:19

Uh we can't play them any better than this. Ryan Moe was on Thursday last week and we talked through a number of very important topics. Why is corn worth 28% less in the West? Meaning cash values uh in the East are very, very strong. Basis is very strong, and basis is incredibly poor in the West. Uh, we ran through that idea. We talked about accumulators in the corn market and what they mean for pricing. The most important part of this video was at the 2030, 20 minutes and 30 second mark if you're a premium sub, where Ryan talked about the July Nove bean spread. He talked about the reasoning for um what's going on in the soybean market, he talked about some issues in South America. And if you really want to know what's going on, you just you gotta listen to it. That's all I can tell you. I can't give away everything for free. We give we actually give away like way too much for free. So um, you know, you got to pay for the good stuff. Lewis Stearns was on Friday. Early soybean planting and yields. This is the way, but Lewis went through some some extreme specifics on the whole topic, went through some of the issues that different farm operations are dealing with. A lot of this is generational. Older crowd wants to plant corn first, the younger crowd, nope, nope, nope, we got to plant soybeans first. Um, this is very interesting, and Lewis does a phenomenal job. If you want to see the premium stuff, if you want to see a video with Ryan, which is is must-watch stuff, uh, go to standardgrain.com. You can sign up this morning. This is a$50 per month subscription. You can cancel at any time. I know you're busy, you're in the tractor, you're in the truck. It takes 30 seconds to sign up on your phone. I'll forward you a copy of this morning's email. You can open it on your phone, you can play the videos on your phone, no login instructions. It's an absolute piece of cake. Give that deal a shot this morning, guys.

SPEAKER_01 10:50

Iranian grain imports have plunged amid disruptions through the Strait of Hormuz. Vessels carrying grains and oil seeds are idling at sea rather than entering the Persian Gulf due to the U.S. blockade of the waterway. Safety concerns, along with prohibitively expensive war risk insurance, are further discouraging transit. Iran is highly dependent on imported grain, used primarily for animal feed in its meat and dairy sectors. Even before the war, the nation's food inflation was elevated due to sanctions and currency weakness. Iran is attempting to reroute some shipments. However, these efforts have not been sufficient to offset the lost volumes.

New Mexico Agriculture Minister

SPEAKER_00 11:31

This is not good for Iran or the people of Iran, but I don't know that it has much of an impact overall on the markets aside from that. So, I mean, the straight, the big impact from the strait of horror moves in the closure has been fertilizer. It hasn't been on grain movement because it's really not a big artery for uh movement of wheat or corn or soybeans unless you need them imported into the Middle East like Iran does, and then it becomes problematic.

SPEAKER_01 11:54

Mexican president Claudia Scheinbaum announced over the weekend that the country's ag minister has been replaced. The move comes as Mexico, Canada, and the U.S. are reviewing the USMCA agreement. The three countries are set to decide by July 1st whether to extend the agreement for another 16 years or allow it to expire. The former ag minister had been leading discussions with the U.S. regarding the spread of New World Screwworm, an issue that continues to show little improvement.

SPEAKER_00 12:22

What is the uh latest on the screw worm situation?

SPEAKER_01 12:25

Uh there were reports last week of some cases confirmed only about 100 miles south of the US uh Texas border. So uh of the US Mexico border, excuse me. Um, so not a lot of improvement that we're seeing.

SPEAKER_00 12:39

And there were some unconfirmed rumors of a border reopening, like what, a week ago?

SPEAKER_01 12:43

Yeah, about two weeks ago, there were rumors that Rollins was gonna throw out a timeline for reopening the border, but that never came to fruition.

Flash Sale

SPEAKER_00 12:52

Um, as far as the ag minister is concerned, as long as they keep buying U.S. corn, you know, we'll be happy. Mexico has accounted for 28% of all U.S. corn export sales this year. And that's kind of been the trend here the last couple of years. So we uh very much need them to stick around and they need corn from us absolutely.

SPEAKER_01 13:10

We saw a flash sale of corn on Friday. U.S. exporters sold six million bushels of corn to unknown destinations. Of the total, three million bushels is for delivery during the current marketing year, and the remaining three million bushels is for delivery during the next marketing year.

SPEAKER_00 13:23

I've heard a couple of people imply that these corn sales to unknown destinations could be China. And I don't know that I'm necessarily on that page. I feel like maybe the market would be acting better, but the market's acting pretty well. I mean, these corns at five bucks. What else do you want? You know, what did uh what did cattle do on Friday?

SPEAKER_01 13:37

Cattle futures were lower, live cattle were 40 cents to a buck oh two lower. Feeders saw losses ranging from 40 cents down to a buck 40. Cash cattle trade was on fire last week. In the southern plains, cattle were$10 higher compared to the prior week at$256. Up here in Nebraska, cattle were$11 higher at$257. And then over in the Western Corn Belt, cattle were nine to eleven dollars higher at$255 to$257.

SPEAKER_00 14:00

Okay. So I mentioned the story about potentially a U.S. naval vessel being struck. U.S. officials now denying that based on what I'm seeing across the Reuters wire this morning. So I don't know. It'll this is a fluid situation. It's early. It's all happening in real time as we're taping. So you guys will know more about this uh later in the day. The uh stock market has bounced back from those uh headline lows. The SP is down 14 points. Um, crude oil is now up 317 at 105.07. It's how fast crude moves. It moved two and a half bucks just in the time we were taping here. Um, everybody have a wonderful week. We'll be back on Tuesday.