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
"84% of MAX Net Long" - Fund Traders LOVE the Corn Market
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🚨 Trump rejected Iran's counterproposal to the latest US peace offer, calling their demands—including gradual reopening of the Strait of Hormuz and recognition of Iranian sovereignty over the waterway—"totally unacceptable." Iran resumed attacks Sunday targeting the UAE, Qatar, and Kuwait; Trump travels to China this week to urge Beijing to pressure Tehran toward a deal. Crude oil futures are trading higher on the news. 🛢️
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📊 CFTC COMMITMENT OF TRADERS (Week ending May 5)
🌽 Corn: Funds were net buyers of 79k contracts, bringing the net long to 345k — the largest since Feb 2025 and 84% of the modern-era "max" net long.
🫘 Soybeans: Funds were net buyers of 37k contracts, bringing the net long to 214k—the largest since Dec 2025 and 89% of the modern-era "max" net long.
🌾 SRW Wheat: Funds were net sellers of 21k contracts on the week.
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📈 FRIDAY MARKET RECAP
🫘 Soybeans were sharply higher — Nov26 +16¢ to ~$11.90/bu—on optimism that China may make a small purchase ahead of the Trump-Xi meeting later this week. 🌽 Corn followed — Dec26 +4¢ to ~$4.94/bu—supported by elevated crude oil and the ongoing US-Iran conflict. 🌾 Wheat also gained on crude strength and persistent drought concerns.
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📋 USDA WASDE — Tuesday, 11am CST
USDA releases its monthly Crop Production & WASDE report Tuesday, including our first look at new crop (26/27) US and world balance sheets. USDA is expected to use Feb Ag Outlook yields (corn 183.0 bpa / beans 53.0 bpa) and March acreage numbers (corn 95.3M ac / beans 84.7M ac). With ample supply projections and several bearish factors in play, the outlook leans to the downside.
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🏦 FED & MACRO
Goldman Sachs now expects the first rate cut in December 2026, followed by another in March 2027 — both later than previously forecast — as elevated energy costs keep core inflation near 3%, well above the Fed's 2% target. Goldman also lowered its US recession probability to 25%, down 5 points, though still above the pre-Iran-war estimate of 20%.
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⛽ FUEL PRICES
National average gasoline sits near $4.52/gal this morning, up sharply from $3.14/gal a year ago. Diesel sits near $5.64/gal vs. $3.52/gal a year ago, approaching the all-time record of $5.82 set in June 2022.
Iran Proposal Rejected
SPEAKER_00Morning, guys. It's Monday, May 11th, 5 23 a.m. Central Time. Grain markets are higher across the board this morning. December corn futures up 3.5 cents at 497. November soybeans up 11.5 at 12.01. July Chicago wheat up five at 624. July Kansas City wheat up 6.5 at 682 and a quarter. September spring wheat up 7.5 cents at 7.07. Let's start off with Iran this morning.
SPEAKER_01So over the weekend, President Trump rejected Iran's response to the latest U.S. peace proposal. Among other things, Iran's counterproposal included a gradual reopening of the Strait of Hormuz, the removal of the U.S. blockade, and recognition of Iranian sovereignty over the waterway. Trump labeled Iran's demands as totally unacceptable. Last week he warned that more severe military strikes could occur if Iran did not agree to the peace proposal. Trump will travel to China this week, where he is expected to urge Beijing to use its influence to push Tehran toward a deal.
"84% of Max Net Long" Corn
SPEAKER_00Here's Trump on Truth Social yesterday. I have read the response from Iran's so-called representatives. I don't like it. Totally unacceptable. Again, oh, he's not yelling at us this time. Thank you for your attention. This matter, period. Um, I don't know that there's a ton to discuss here. I think that this news set the stage perhaps for the higher grain trade this morning. We've got crude oil futures up$2 in the June WTI, about 97 and a half bucks, but the stock market's quiet. I think this is just kind of like, you know, the beat goes on as it relates to the U.S. and Iran and this whole thing. It's just, it's gonna, it's gonna continue for a while. They can't get on the same page.
SPEAKER_01The CFTC released its weekly commitment of traders report on Friday for the weekending Tuesday, May 5th. Large money man, large money managers were net buyers of 79,000 corn contracts. The net long position of 345,000 corn contracts is the is the largest since February 2025. The funds were also net buyers of 37,000 soybean contracts. The net long position of 214,000 soybean contracts is the largest since December of 2025. And then lastly, the funds were net sellers of 21,000 SRW wheat contract wheat contracts on the week.
SPEAKER_00This is getting very interesting with regard to the fund length in the row crop markets. Here's a couple of statistics for you. Based on the previous record net long positions in the modern era of CFTC record keeping, which is post-2006, large money managers, as of last Tuesday, were 84% of max net long in the corn market and 89% of max net long in the soybean market. And what does that mean? It means that that 344,000 in corn is 84% of the previous record, which was 409,000 contracts in change from 2011. The previous uh record net long in soybeans um was posted in 2012. So these are some pretty lofty uh levels. The funds were net buyers of what'd you say, 74,000 contracts of corn?
SPEAKER_01Uh 79.
Soy Rally, Weather
SPEAKER_00Okay, 79,000. That's a lot, but farmers, generally speaking, were net sellers of more than that. So you've got this kind of clash between the fund and the farmer. This is the CFTC producer, merchant, processor, user category. And this group of traders essentially these this is who's buying from the farmer when the farmer sells. And when the farmer sells, they go and sell futures to hedge their newly acquired cash grain. That group was net sellers of 109,000 contracts during the weekending May 5th. So that would indicate a lot of farmer selling. Corn plus soybeans plus SRW wheat combined, uh net long of 549,000 contracts, which is creeping up on the record net long in that data set from 2012, which was 626,000 contracts. If you could get some some length in the wheat, uh, you could very easily get to a record net long there. The funds continue to just love the soy complex. When you combine soybean, soybean meal, and soybean oil, they're net long, uh nearly 493,000 contracts, which is a record. I think the uh trade is very much interested in RVOs and record crush margins and perhaps this Trump G meeting that's going to happen on Thursday and Friday this week. Um, premium subs, you guys have the full versions of the fund tracker charts for corn soybeans and SRW weed in your email this morning. You also have the daily fund tracker chart, which provides real-time estimates of uh where the funds sit. And I think you should probably check out a premium video I did last week. The funds are net long, 300,000 contracts of corn. What's next? I had some really good charts and historical context and tell you kind of typically what happens when we get into this uh sort of position. So you might want to check that deal out. But uh yeah, lots of large speculators really like this stuff. And uh almost, yeah, I'm I'm not frustrated, but I'm I'm uh I think it's an interesting dynamic that the prices are still as cheap as they are, given all of this uh big fund length in the markets.
SPEAKER_01Soybeans were sharply higher on Friday, with the November 26th contract gaining 16 cents to settle near$11.90 per bushel. The rally was driven by expectations that China may make a small soybean purchase before President Trump's meeting with Xi Jinping later this week. Corn futures also moved higher, supported by elevated crude oil prices and the ongoing US-Iran war. The December 26th contract rose four cents to close near 494 per bushel per bushel. And wheat futures were also supported by strength in crude oil, along with persistent concerns over drought conditions.
SPEAKER_00Let's take this opportunity to look at some charts and also some weekend weather. Here's Dece Corn back up to 496, 497 this morning. Um, we found some dip buyers last week as I was kind of hoping that we would. The funds, as I mentioned, 89% of Max Net Long as of last Tuesday. So is another test of the$5 to$506-ish area in the cards. Very possible. This is uh where we've seen farmer selling emerge and kind of kept the rally on several occasions now in this area from you know the 490s up to 505, which we we stayed at very briefly, but uh that's a possibility. Nove soybeans, dip buyers emerged, and we posted, I believe this morning, fresh highs. Yeah, we traded up to 1201 and a quarter. So we posted fresh highs for this entire thing early this morning in Nove beans. Um, new highs possible today already happened. Um that happened since I made this graphic early this morning. Uh, people are very interested in the Trump G meeting. So the White House had told us in the past, it was, I don't remember if it was in the fall or a few months ago, but they said, hey, China's gonna buy 25 million metric tons of new crop soybeans, and they're gonna do it every year for the next three years. China has not bought a single bushel of new crop soybeans yet, and they really need to start if they're gonna hit that target. So I think the optimists out there believe we'll see some sort of announcement purchase uh language uh discussed during this meeting later this week. HRW wheat is caught between two different dynamics, I think. On one hand, you've got, okay, we got an HRW wheat country drought, we got a Southern Plains drought in the United States, and this crop is gonna be terrible. We got a Kansas wheat tour this week that's gonna be probably have some friendly news for it. It's gonna tell you the crop isn't very good. But then the flip side is that U.S. wheat is too expensive versus its global competition. And that's why we're kind of stuck here. I think you've got uh two different dynamics kind of pushing and pulling at this thing. Let's look at some weekend weather. This is cornbelt uh precipitation for the last 72 hours. Not really a whole lot to speak of. I think there was probably a lot of planting progress over the weekend. You did have a ban from Missouri through uh the southern part of Illinois, uh south central Indiana, they caught some rain, but a lot of the cornbelt was very dry over the weekend. The forecasts are kind of uh clashing just a little bit this morning, like the Euro for the next seven days has all this rain from Missouri and southern Iowa, and that rain does not exist in the GFS forecast. So we'll see how this resolves. Um, Southern Plains, Oklahoma caught some rain, and so did parts of North Texas. If any of this fell on HRW wheat areas, which it did, um, it's not gonna have much of an impact. It's just it's too eight at this point. And the forecast for these areas of the Southern Plains doesn't really offer much, and even if it did, it's it's too little too eight at this point.
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 last week's premium videos?
USDA Report on Tuesday
SPEAKER_00Our friend Shea Fulk from AgView Solutions did an equipment, equipment cost survey and ran through all of the results, a lot of super interesting stuff. I made some notes on what he talked about because his video was like a half half an hour long. Uh, is it worth owning a sprayer? Uh, hidden costs of paid-off equipment, used equipment, custom rates. A custom rate thing was interesting, and that was actually what spurred this video because uh the numbers that the universities have out are a couple of years old, and people wanted new numbers on the custom rates and kind of what the market is. So we ran through that. Uh, parts and repairs are outrageously expensive, and Shay talked about that as well. Uh, Ryan Moe was on Thursday last week, and we talked about big soybean problems in Brazil. These guys are in rough shape right now. Uh, commercials, farmers are in rough shape. Their interest rates are through the roof um relative to what we've got going on in the United States. If you want to kind of know what's going on globally, like how is Brazil competing with us? How are their farmers uh looking versus what's going on in the U.S.? This is a must-watch video. Matt Bennett was on for a 20 questions segment on Wednesday last week. 50% sold with regard to new crop corn and soybeans. Is that too much or not enough? Uh, only time will tell. But uh, Matt laid out his opinions, some grain marketing strategies. We had a lot of great questions from our premium subscribers. If you want to see the premium stuff, go to standardgrain.com. You can sign up this morning. This is a$50 per month subscription. You can cancel at any time. No other fee, no other obligation. Nobody will try to sell you anything else. We just blast out a ton of content to our premium subs every single business day. Two emails, 5 a.m. Central Time, 10 a.m. Central Time. Um, cover everything. So if you sign up this morning, I'll forward you a copy of this morning's email, which includes links to our six most recent premium videos. So you'll be able to see everything that I talked about here this morning. Takes 30 seconds to sign up. I know you guys are busy. Um, you can do it on your phone, in the tractor, in the truck, whatever. It's uh a piece of cake. Give that deal a shot this morning, guys.
SPEAKER_01USDA will release its monthly crop production and WASDI report tomorrow morning at 1111 Central Time. The report will include our first look at the new crop balance sheets for both the U.S. and the world. The USDA will use the March acreage numbers and trend yields in its initial look at the new crop corn and soybean situation with ample supply projections for both U.S. and world ending stocks and several bearish factors at play. Uh, the outlook for corn, soybeans, and wheat is skewed to the downside.
Goldman and Interest Rates
SPEAKER_00Okay, so we threw in the 26-27 ending stocks estimate. And these numbers, they're all just smoke and mirrors. They don't mean anything. This is USDA estimating how much corn, soybeans, and wheat will be left over at the end of the marketing year next year. So for corn and soybeans, that means August 31st of 2027. That's what they're trying to estimate here. It's an impossible job. You couldn't do any better. It's very difficult. They're gonna throw out crop estimates, and this is what they're gonna do. They're almost certainly going to use their um their yield numbers from the Feb ag Outlook Forum. So they're gonna punch in a 183 for the national corn yield and a 53 for the national soybean yield, and that's just a starting place. I don't even, I don't even think it's meant to be an estimate. It's just like it's just a starting. They got to start somewhere, and that's where they're gonna start. They'll use the March acreage numbers, which for corn were 95.3, for soybeans were 84.7. They're gonna throw in what they believe are reasonable demand estimates and they're gonna spit out some carryout numbers, but they don't really mean much. I'll actually be maybe a little bit interest, more interested in the old crop balance sheets, like do they raise corn exports? Do they cut corn feed and residual? Um, is the ethanol number too high? That's that sort of stuff. Um world numbers will be out as well, and they'll be just as accurate. They won't be accurate. It's just there, they've got to have somewhere to start. So I don't think it's like a big market moving report, but it is kind of a fresh data set that we can uh start to look at, I guess.
SPEAKER_01Goldman Sachs is projecting that the Federal Reserve will delay interest rate cuts until later this year. The firm now expects a quarter point rate cut in December, followed by another in March of 2027, both later than previously forecast. Elevated energy costs linked to the Middle East conflict are expected to keep core inflation near 3%. Inflation will need to show clear signs of cooling before the Fed can begin cutting rates, a shift that is unlikely until tensions in the Middle East subside. Policy easing will also require a weaker job market. Goldman additionally lowered its U.S. recession probability to 25%, down five percentage points from its prior estimate, though still above the 20% estimate before the start of the Iran war.
SPEAKER_00Feels like Goldman and everybody else that they're all just glossing over this Iran situation. Like it's it's absolutely 100% going to be temporary and it's gonna end, and the fuel prices are gonna come down because we've got uh gas prices and diesel prices that are just shooting up. National average gas price was 452 per gallon this morning, up from 314 a year ago. National average diesel price was 564, closing in on the record highs from 2022, which was 582. And you've got some states out there or some areas where diesel seven bucks and uh regular unleaded is six bucks. And nobody's even talking about rate hikes. Like they're just they don't believe that this inflation is uh is gonna stick around. And we've seen that before. I mean, this isn't this isn't post-COVID, but I'm just I'm not as uh optimistic as everybody else, perhaps, that this is gonna be like a one and done. Gas is just gonna go back to three bucks and diesel's just gonna go back to four bucks. I just I don't know if that's exactly how this is gonna work, but that's that's the way everybody's talking about it. Like, hey, we're just gonna wait until we can cut rates and then they're gonna keep cutting. I don't know. I don't know if I'm I'm on that page, but these people are smarter than me, so pay attention to that, maybe. What did uh cattle do on Friday?
SPEAKER_01Cattle futures were lower, live cattle were 82 cents to a buck 80 lower. Feeder saw losses ranging from 187 down to 275, with the exception of the front month contract, which gained 105 cash cattle trades at all all new all-time highs last week. Uh in the Texas panhandle, cattle were a buck higher compared to the prior week at mostly 256. In Kansas, cattle were one to five dollars higher at 255 to 260. Up here in Nebraska, cattle were three to eight dollars higher at mostly 260. And then over in the Western Corn Belt, cattle also traded at 260, which was$5 higher than the prior week.
SPEAKER_00You look at the outside markets this morning, and I think the you can you it's safe to say that the markets were not surprised by the lack of an agreement with Iran because the stock market's flat, treasuries are basically flat, US dollars flat, crude oil's only up two bucks, which is nothing uh this day and age, 97.56 last in the June WTI. So really pretty quiet. Everybody have a wonderful week. We'll be back on Tuesday.