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
Trump/Xi Meeting + E15 Farm Lobby Clown Show
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🌍 Trump & Xi Meet in Beijing — What It Means for Ag Markets
Trump and Xi sat down for a 2+ hour meeting in Beijing, and the agricultural world is watching closely. China renewed import licenses for hundreds of US beef plants 🐄, making beef exporters the early winners. Soybean traders, however, were left wanting more — no new purchase agreement was announced, sending grain markets mostly lower. Headlines are still developing, so stay tuned.
🌽 E15 Clears the House — But the Senate Fight Is Just Beginning
The House passed year-round nationwide E15 sales 218–203 with bipartisan support. With ethanol trading at its widest discount to gasoline in 20 years, the economic case is strong — but oil-state senators and even the American Soybean Association have concerns. It's going to be a battle.
🌾 Kansas Wheat Tour Paints a Tough Picture
Yield estimates are coming in well below last year across both northwest and southwest Kansas. Northwest came in at 38.3 bpa vs. 50.5 last year. The final state estimate drops today—don't miss it.
🌧️ Rain Is Coming to the Corn Belt
1-2" of rainfall is on the way for much of IL, IA, IN, MO, OH, MN, ND, and SD—welcome news for newly planted fields. But temperatures are also running 4.2°F above normal, so it's a mixed bag for crop development.
🌱 EU Moves to Tackle Fertilizer Crisis
Nitrogen prices in Europe are up 40% since December. The EU is expected to announce a plan next week to stockpile fertilizers and support affected farmers ahead of winter planting season.
🥩 JBS Profits Crater 56%
Tight US cattle supplies crushed JBS's North American beef margins, dragging net income down to $220.6 million. Meanwhile, their Brazilian operations hit record Q1 sales. The meat giant also flagged rising corn prices ahead due to weather and fertilizer costs.
⛽ Ethanol Production Hits Seasonal High
Weekly output hit 1.08M barrels/day — up 6.1% year over year. Margins remain healthy at 10–45 cents positive across the Corn Belt, even as stocks tightened to 24.87 million barrels.
Trump/Xi Meeting Outcome
SPEAKER_01Morning guys. It's Thursday, May 14th, 5 24 a.m. Central Time. Grain markets are mixed to lower this morning. December corn futures down three and three quarters at 499 and a quarter. November soybeans down seven and a quarter at twelve dollars and a half. July Chicago wheat up one at six seventy-six and a half. July Kansas City wheat down five and three quarters at 719. September spring wheat up one and three quarters at 742 and a half. Big mate, big meeting in Beijing uh last night. Let's start there.
SPEAKER_00So President Trump met with Xi Jinping in Beijing today for more than two hours, during which Xi proposed a constructive strategic and stable framework to guide U.S.-China relations in the coming years. Headlines and news from the meeting are still being printed early this morning and lack specific details. China renewed import licenses for hundreds of U.S. beef plants, which could allow beef trade between the U.S. and China to accelerate. The White House reported that China had committed to 25 million metric tons of new crop U.S. soybean purchases several months ago, although no purchases have been made. China did, however, purchase nearly all of the old crop soybeans, about 12 million, about 12 million metric tons that it had reportedly committed to under the same agreement.
SPEAKER_01Mackenzie, go back to the beef story real quick. China renews import permits for U.S. beef plants. We don't have a ton of beef in the United States necessarily or extra beef, but uh what is your take on that part?
SPEAKER_00Right. I can't obviously um we are low on beef production considering our uh low cattle numbers, but this is great for uh the beef industry as a whole because uh China consumes a lot of organ meats that we don't hear in the US. And since uh China cut off the trade between us and them um here recently, uh we haven't had anywhere to go with those organ meats. We're talking liver, tongue, heart, all that kinds of stuff. Uh so that'll be reopened and uh that'll help the meat packers bottom line at the end of the day.
E15 Passes House
SPEAKER_01I think traders to this point are disappointed slightly in the lack of any sort of like specific corn or soybean language out of this meeting. Um the wires said that, hey, purchases of agricultural products were discussed, but there was no like new announcement, no new numbers. So we're kind of back to this one, which was November 1st. China will purchase at least 12 million metric tons of U.S. soybeans during the last two months of 2025. Um, they did purchase those 12 million metric tons of old crop beans. It took longer than uh the end of 2025, but they did. The total number is 11.8. They got very close. So there was one analyst cited in the Bloomberg article who said or seemed to feel as if that 25 million metric tons for new crop in terms of soybean purchases is still on the table and that agreement remains in place, although China hasn't bought anything. So, you know, it's it's early in this meeting, like just wrapped up a few hours ago. So you could still see some sort of announcement or uh purchase agreement uh discussed or released in the wires. We haven't seen it here yet at 5 30 this morning, but uh maybe by the time some of you guys watch this, it'll be different. But nothing, nothing yet in the market's a little bit underwhelmed.
SPEAKER_00The U.S. House of Representatives approved legislation to allow year-round nationwide E15 sales late on Wednesday. The bill passed with bipartisan support in a 218 to 203 vote and now heads to the Senate, where it is expected to face significant resistance from oil state lawmakers. A range of interest groups, including oil industry lobbies and environmental organizations, are also likely to oppose the bill. In addition, an analysis by the Congressional Budget Office found the legislation would add billions of dollars to the federal deficit over the next decade. Meanwhile, wholesale ethanol is trading at its widest discount to gasoline in 20 years, reinforcing the economic case for expanding E15 sales.
Farm Lobby Clown Show
SPEAKER_01Some sources believe that this thing is guaranteed to die in the Senate. Other people think it's going to be an uphill battle, but that it's possible. Um, I don't really know. So this is this is the first hurdle, but I think that the Senate is going to be the much bigger hurdle. Um, this I don't think it was a huge shock that it passed the House. Let's go to the response, which is the more interesting part of this uh story.
SPEAKER_00Yeah, so the American Soybean Association is opposing this legislation. Uh the group cited research suggesting that while increased E-15 sales may slightly boost corn prices, those gains would likely be offset by a decline in soybean prices if the legislation is passed. In response, the National Uh Corn Growers Association argued that year-round E-15 would strengthen farm income for corn producers, many of whom also grow soybeans. ASA's opposition could complicate the bill's passage, although supporters have challenged the validity of the research.
SPEAKER_01Okay, so there was a lot that came out here. So let's discuss. This was this is from the Bloomberg piece that was printed yesterday. A spokesperson for the American Soybean Association pointed to research by Fapri at the University of Missouri, which found that small gains in corn prices from year-round nationwide E-15 uh gasoline are more than offset by decreases in soybean prices. The study looked at different scenarios in how nationwide E-15 could impact biofuel demand with mixed impacts on farm income. Uh, this was a quote from the spokesperson. Based on the study's findings, we advised ASA members that we could not support the amendment in its current form, the spokesperson said, adding that ASA has not yet taken a public position on the amendment. When they quote you in a damn Bloomberg article, you're taking a public position on the amendment. And the American Soybean Association had to put out fires late yesterday, and they released uh this press release at about 5 30 yesterday afternoon. They said ASA continues to fully support year-round access to E-15 and policies that strengthen domestic biofuels demand and create new market opportunities for farmers. However, the bill passed today contains more than just E15 provisions, and you guys can go and read all of this if you want. But they're pointing to this uh FAPRE study, which says that basically E15, if it was just E15, the results of the bill would be different. But they're talking about uh specifically SREs, reduced SRE reallocation would lower effective RFS mandates, and this is part of the bill. I don't really care about the study. Here's the problem Mackenzie, remember when we were at Commodity Classic and people were walking around with the little E15 stickers, they're all national corn growers people. How many of those people do you think also grow soybeans?
SPEAKER_00Probably 99% of them.
Kansas Wheat Tour
SPEAKER_01It's like all of them. So these this lobby like infighting, what are you what are you guys doing? The the oil lobby is laughing at you. They're laughing at you because you can't get your shit together. It's it's absolutely appalling. How is the how is the soybean association not talking to national corner growers? How are they not getting on the same page here? They're the same damn people, they're the same people, and they're arguing for different things. And I know that eventually the like ASA is gonna say, Oh, yeah, now now we agree with it. But guys, I mean get it, get it together. It's absolutely pathetic. Every other lobby in the world is just running laps around you and you look silly. It's terrible.
SPEAKER_00Terrible. The Kansas Wheat Quality Council's tour began this week on Tuesday after observing 187 fields. The tour projected wheat yields in the northwestern portion of the state at 38.3 bushels per acre, down from 50.5 uh last year. The tour's five-year average for the area was 45.7 bushels per acre. The tour moved into the southwest portion of the state on Wednesday, where the average yield was seen at 39.3 bushels per acre versus 53 uh point three last year and 43.4 on average. The tour is slated to release a final state yield estimate later today.
SPEAKER_01Uh, not shocking that the numbers are down from last year. USDA had the Kansas State wheel yield at 37. So these numbers are slightly higher than that, but you're kind of splitting hairs here. I mean, they're they're confirming the idea that hey, the crop is in bad shape, and that should not be a shock.
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 our recent premium videos?
Corn Belt Rain Expected
SPEAKER_01Brian did charts with Mackenzie yesterday. Absolutely fantastic stuff. The the technical setup in the grain markets is incredibly interesting right now. It's much more interesting than it's than it's been in months and months and months. So if you're sick of the headlines and the noise and Joe ranting about the corn and soybean lobbies, um, this is like just kind of down to just technical price action. It has nothing to do with the news. It's uh Brian reading the charts, and he's very, very good at reading the charts. Uh USDA snapshot was after Tuesday's report. I take like three minutes to throw these videos together and just say, hey, these are the big headline items you need to be aware of. I throw the balance sheets up on the screen, uh, show you the changes and exactly how everything looks. I did a cash corn and soybean explainer on uh, I believe Monday, ran through every sale that I've advised for old crop and new crop uh and 2027 corn and soybeans. If you guys want to see the premium stuff, go to standardgrain.com. You can sign up this morning. This is a$50 per month subscription. We send a ton of premium content out to our crowd uh every single business day. Uh new premium video every single business day. The 5 a.m. email blast is jam-packed full of charts, graphics, weather maps, everything you could ever want in a grain market newsletter. And the videos are uh fantastic. Uh, give that deal a shot this morning, guys.
SPEAKER_00Widespread rainfall is headed for the U.S. Corn Belt. Accumulation is slated to begin later this week with showers persisting through the weekend and into next week. Over the next seven days, large portions of Illinois, Iowa, Indiana, Missouri, Ohio, Minnesota, North Dakota, and South Dakota are slated to see one to two inches of rainfall. Drier areas include much of Michigan, parts of western Iowa and eastern Nebraska. The rain could be well-timed for farmers who have uh completed uh planting. Still, planting conditions have been variable, and some areas are too wet and too cool. Temperatures are slated to run above normal over the next seven days. Based on Euro model data, our friends at Crop Profit estimate that U.S. corn areas will run 4.2 degrees hotter than normal on average over the next seven days.
EU Fertilizer Plan
SPEAKER_01Yeah, I'm not gonna say that the rainfall is necessarily a great thing for everybody, but in general, if you get some rain after the crops have been planted and you get a little bit of uh a streak of warmer temperatures, that's that's pretty good. So you're gonna see some widespread rainfall. Uh the GFS looks a little bit different, includes some rain for different places, but uh the rain's coming. Temperatures and be above normal, 4.2 degrees on above normal on average across U.S. corn areas, based on data from our friends at crop profit, 137% of normal rainfall over the next seven days, based on Euromodel data. And then when you go out to the 8 to 14, you're talking 107% of normal. Um, people had been talking about the drought that's in the uh southern plains and also in the southeast and how that could make its way into the corn belt this summer. But this forecast uh definitely contradicts that idea.
SPEAKER_00The European Union is drafting a plan to support farmers amid surging fertilizer prices. The plan, which is expected to be announced next week, includes proposals to stockpile fertilizers and provide financial assistance to farmers affected by elevated costs. While European farmers largely secured supplies for spring planting, concerns are mounting over availability for winter planting later this fall. In April, nitrogen fertilizer prices in the EU were roughly 40% higher than in December. The block is also considering short-term measures to expand the use of organic fertilizer substitutes.
SPEAKER_01Maybe our fantastic corn and soybean lobbies can work to push something through like this in the United States if they could work together. Was I too hard on them, you think?
SPEAKER_00No, absolutely not. They need to get it together and stand together.
JBS Earnings
SPEAKER_01They need to get it together. And the pro the the frustrating thing for me is that you guys are the ones who are paying these people. I'm not paying them. You guys are the ones who are paying them, and they're not they're not doing the work for you that they should be doing. Um, fertilizer is still obviously a big issue in the United States, and I think more so globally. I think outside of the United States is where you're gonna see even bigger problems. And you're gonna see it, we're starting to see some crop estimates come out of places like Europe that are lower as a result of the fertilizer situation. It's still very difficult to quantify.
SPEAKER_00JBS reported a sharp decline in first quarter profits yesterday, with net income falling 56% year over year to$220.6 million. The drop was primarily driven by losses in its North American beef sector, where historically tight cattle supplies have significantly increased input costs. In contrast, strong export demand supported JBS's Brazilian beef business, which delivered record first quarter sales. Earlier this week, the Trump administration indicated it may increase beef imports to lower domestic prices, a move that could further benefit the company's uh Brazil-based operations. JBS also projected strong global demand for corn, with the expectation of prices moving higher due to weather risks and rising fertilizer prices.
SPEAKER_01It's an interesting statement for JBS to make on uh corn prices. With regard to JBS, the company, um they're not doing that great. Their stocks up 2% year to date. Um, they're actually down 7% over the last year. So they've struggled a little bit with this cattle thing, right?
Ethanol Production
SPEAKER_00Yeah, yeah, they have, but I mean, good golly, they still made$220 million in the world. You're not worried about them. You're not worried about them. Absolutely not. They'll they'll make it through.
SPEAKER_01Yeah, I think they will.
SPEAKER_00Uh U.S. ethanol production rose to a seasonal high last week. Weekly output was reported at 1.08 million barrels per day, up 6.4% compared to the prior week and up 6.1% versus the same week last year. Ethanol stocks fell to 24.87 million barrels. The print was down 4.4% compared to the previous week and down 1.3% compared to the same week last year. According to Reuters data, U.S. ethanol margins range from 10 cents to 45 cents positive across the corn belt.
SPEAKER_01I had some questions come in yesterday and this week. Like, hey Joe, what do you think will happen if if the E15 thing, if it gets through the House, which it did, and then it gets to the Senate, it's the president signs it. What's the impact going to be on ethanol production? And my answer was short-term, zero. It's not gonna be anything. Because if we do start, it's gonna take time to build out some of this infrastructure. Some gas stations are gonna be able to offer it right away. It is still a choice, it's not a mandate. The consumer can choose whether or not to buy it, the retailer can choose whether or not to sell it. We're exporting a lot of ethanol. So I think that initially, if we're to use more domestically, it probably just comes out of exports. And then, you know, down the road, this could be months or years. You're talking like, okay, if if if there if that demand is really there in a real meaningful way, then yeah, you see plants expand and you see new plants built. I just don't think we're anywhere close to seeing that. I'm peep people have different opinions about that than me, but that's that's my opinion. Uh, what did cattle do yesterday?
SPEAKER_00Cattle futures bounced back yesterday. Live cattle were 87 cents to 582 higher, with the exception of the back month contract, which lost a buck 92, a buck 92. Feeders saw gains ranging from a buck fifty up to 487, with the exception of the back month contract, which lost a buck 17. Box beef prices were lower. Choice was down 205 at 388.68, and select was down 269 at 388.58.
SPEAKER_01S P 500 posted fresh all-time highs again yesterday, and it's up 20 points this morning. Um, treasuries are up just a little bit. Crude oil is quiet, down 20 cents in the June WTI at 182. I think Trump and NG talked about, I'm I'm assuming they talked about Iran, but I didn't read the headlines. There's gonna be some more for us to talk about tomorrow, maybe. Everybody have a uh great day today. We'll be back on Friday.