Markets Climb Against the Grain: Strength Builds Despite Falling Crude

Despite crude oil and other energy markets falling into the weekend on another peace plan submission from Iran, corn, beans, and wheat moved higher to cap another week of impressive gains. Wet and cold US planting conditions remained intact through the weekend, but a quick warm up should begin to take over traders' thoughts as an offset to the obvious impasse between the US and Iran drags into its third month. The normal seasonal bearish trend after the US crop is 50% planted will be muted this year as crude oil over $100 a barrel will continue to keep ethanol and bio-diesel margins wide to keep demand for grind and crush high as the US enters the high driving season when school ends later this month.

News and Notes:

- The US Midwest is expecting a quick warm up after a very unseasonably cold last 5-7 days. Although rain continues to cause some planting and emergence concerns in MO, S Il and S IN, the overall US crop picture is pretty good. There are also no major Northern Hemisphere weather concerns for Europe, Russia, and China. Some concern is merited for roughly 1/3 of Brazil’s safrinha corn crop that is in drought conditions.

- The new crop corn, bean and wheat charts are on Page 2 and show the steady advance in prices in 2026 and since the summer lows last summer. The technicians see impressive charts that continue to grind higher independently of the underlying fundamentals. The bearish fundamental traders have been wrong most of the year as all focus was on the comfortable world supplies and the mostly unstressed growth and harvest of Brazil and Argentina’s record crops. With the war now nearing 3-months old and crude trading 45% higher than pre-war, the inflation investing movement has kept buyers involved in all markets, especially any crop used as a renewable fuel stock. The 4th chart is for May Feeder Cattle and this week’s drive to new all-time highs and the resistance left from last fall. Although new all-time highs were made twice in April, the all-time daily high close still stands from last October 16th.

- Outside of the day-to-day developments with the Straits and Iran, the next 7-10 days will see a rapid advance in US planting and the May 12th monthly USDA report. As US planting progress moves toward 40% this weekend and past 50% next week in generally non-threatening conditions, the need for any prevent planting premium will begin to be removed. With the drought map shrinking over the last few weeks, early crop condition reports are expected to be in line with the 5YA for the G/E rating.

- The standing Sales Target for the last 10% of the 2025 corn crop was hit today at $4.75. In between interest expense, hidden storage costs and shrink, it was time to finish. With the US crop being planted at a near record pace, the market will begin to extract late planting premium from all contracts soon. In a higher interest/lower price/higher input cost market, long-term storage, even for most tax planning, is becoming more of a problem than an opportunity.

- Weekly Changes: Corn + 7 3/4 (May ‘26), + 14 1/2 (Dec ‘26), Beans + 21 1/2 (May ‘26), + 27 (Nov ‘26), Wheat + 21 (July ’26), Crude + 754, Diesel + 1521, Dow + 254 , US Dollar - 359, Cattle + 777, Feeder Cattle + 1050, Hogs - 147, Cotton + 398, Milk + 24 (17.08).

It is hard to believe that 2026 is already one third of the way over as we embark into May. Many of the factors that have moved the markets in the last few months were not present when 2026 started and will figure into price discovery for the rest of the year. High fuel and fertilizer prices will not go away quickly even when the Straits re-open. Concern is appropriate and warranted looking out into the Southern Hemisphere growing season where fertilizer shortages will impact planting intentions for SA. Through Sunday morning there has been no major breakthrough or breakdown in peace negotiations with Iran, but the Straits remain blockaded which should keep Sunday night trade similar to last week’s trade of a bullish leaning choppy trade in the ag and energy markets. Have a great Sunday.