China Trade Letdown Triggers Sharp Commodity Selloff as Funds Head for the Exit

The wave of disappointment from the lack of expanded Chinese corn and bean purchases from the US/China trade summit accelerated to end the week as all ag markets were sharply lower as the heavily long positioned funds bailed on their trade. The trade had come to the foregone conclusion that the US trade team would prioritize additional soy and row crop sales, but once China decided they had purchased enough from the US, they quickly moved onto to other trade items on the agenda. With the US crop going in quickly and warmer and wetter weather forecast into late May, the bullish momentum will struggle to stay intact despite crude oil closing over $100 a barrel for the week for just the third time since the war started as no progress in ending the Straits closure or Chinese pressure on Iran to agree to end the war.

News and Notes:

- A seasonally warm and wet outlook is offered for the entire Corn Belt with only the drought plagued W Plains still missing rain. Planting pace will continue to move quickly, and the upcoming improved weather will put the crops in great shape when the initial crop ratings come out in a few weeks. Monday’s US planting pace should be 70% +/- for corn and 65% +/-. SA weather remains a non-issue.

- The new crop corn, bean and wheat charts on Page 2 show the fund evacuation after the disappointment of the Chinese trade meetings excluding any additional soy or grain sales. Going into the meetings, the funds were holding enormous, long positions totaling 3.26 BBU (1.8 BBU of corn, 1.27 BBU of beans and 150 MBU of wheat) and sold roughly 15% of those longs over the Thursday and Friday breaks. The funds are still holding very large corn and bean long positions, which is a concern heading into a slow news, good US weather time period in late May. The crude chart is the last chart on Page 2 and offers hope that the inflation and bio-fuel trade will support corn and beans to slow the rapid late week descent.

- Status quo was the message from Beijing for bean purchases as the formerly negotiated 25 MMT (917 BBU) will remain the baseline. Unfortunately, this total has not been met in recent years as China continues to leverage their investment and relationship with Brazil as their primary, lower cost supplier. Corn, sorghum, DDGs, and cotton were also disappointed on the lack of expanded trade with China, and also saw the same disappointed selloff seen in the soy complex.

- Thanks to Helena Agri for making the FieldLink podcast available for distribution as this week’s podcast focuses strictly on the markets, marketing strategies, and the potential fallout now that the trade summit proved disappointing. Please listen to our 43-minute discussion.

-  Weekly Changes: Corn – 15 1/2 (July ‘26), - 12 1/2 (Dec ‘26), Beans - 31 (July ‘26), - 18 3/4 (Nov ‘26), Wheat + 16 3/4 (July ’26), Crude + 1004, Diesel + 2267, Dow - 74, US Dollar + 1424, Cattle + 500, Feeder Cattle + 150, Hogs + 787, Cotton - 355, Milk + 1 (16.96).

The US/China trade debacle is just another example that counting on help from the government in developing your marketing plan is far more painful than profitable as bailout checks are becoming the favored course of action rather developing new avenues of demand. High crude oil prices, which appear to be ready to head even higher with the cease-fire ending soon, will add support through ethanol and biodiesel, but year-round E-15 needs to be passed to help offset some of the disappointment of the failures at the trade summit. Without a weather scare developing during pollination, the annual highs for corn, beans and wheat could have been made last week, as fund buying will turn into fund selling without fresh bullish news. Have a great weekend.