Are Grains and Cattle Positioning Ahead of the End of May? | AOA Markets 5/28/26

Ajouté : 2026-05-31

[00:00:00]The views and opinions of this program are those of the hosts, guests, and callers. There is substantial risk of loss in trading futures and options, which you should carefully consider prior to trading. Well, joining us right now, let's take a look at the market trade as we near the end of the month, May. Tyler Schau with agmarket.net is with us. Tyler, welcome back to the show, my friend. Hope all is well.

[00:00:22]>> Yeah, it's always good visiting with you, Jesse. Things are good. A little bit hot and dry up here, but uh maybe not the worst time in the world to be a little bit dry.

[00:00:30]>> I was going to say, uh allow some of that uh final spring planting activity to get done in parts of the northern tier and, you know, I think for some folks as well that have had moisture that, you know, little heat going to help with some stand establishment and get some of that crop uh emergence uh running strong, I would think as well, Tyler.

[00:00:51]>> Yeah, you're exactly right. Uh we I mean, make no mistake, we're dry. We could use some some moisture, but uh this run of weather over the last week has been really good. A lot of producers are wrapping up uh getting the crop in the ground, kind of moving on to some of the later uh season type uh plantings, but uh it's been a good run. Now, we just need to sit back, hope we get a little rain, and that has been the complaint most early spring is that we had a lot of cold temperatures. Uh so, this is definitely going to help kind of give us some some growing degree days.

[00:01:22]>> Very true. Well, let's talk about this grain market a little bit here. As I mentioned, we're nearing the end of the month of May. So, that's always an interesting time in the markets. When you near the end of a month, you maybe get some fund movement and some uh you know, profit taking, position squaring, things of that nature ahead of a month's end. And really, these grain markets have kind of been ebb and flow and with the headlines. That headline volatility has really been the name of the game throughout the entire month of May, Tyler.

[00:01:54]>> Yeah, the The main driver has no doubt over the last few weeks, been what's going on in Iran and mostly crude oil prices. Uh you know, as we see the crude weakening, it's it's led to some selling by managed money. You're probably right.

[00:02:09]We're we're entering that time frame, late May, where some funds decide they're going to exit on some positions or or square up for the month. Uh and so there's no doubt we're seeing some of that, but we've we've, you know, with the exception of soybeans, corn and wheat have kind of come under some pressure over the last you know, week, week and a half of trade, which is maybe not been what a lot of people are expecting. But we're kind of in that lull where, like I said, you know, yeah, the the forecast is is dry in some areas. That's maybe not the worst thing for some of those crops. Uh the real key is going to be what happens over the next 3 weeks, which, you know, there's a lot of talk out there in the marketplace on on El Nino and kind of a super El Nino cycle.

[00:02:53]And so it'll be interesting to see how that plays out as we move forward.

[00:02:57]>> Are you concerned? I've seen some chatter this week about December corn, for instance, kind of getting down here and testing some support levels again.

[00:03:05]Are you concerned that without some bullish news of sorts, that we could maybe break through some support here in terms of this corn market right now?

[00:03:16]>> Um yes, and that should I mean that should always be a concern for the producer hedger.

[00:03:23]Um you know, if you lay the the 2026 chart over a 2024 chart, it looks strikingly similar what we've seen over the last few months of trade. And then as you roll through the summer, if you recall 2024, all the crops just kind of fell apart and worked their way lower as we moved throughout the growing season. And so that's definitely, in my opinion, got to play a role in the producer's mind as you're sitting here.

[00:03:52]You know, 480 over the last few years has been awfully good sale.

[00:03:57]You know, I work with some producers that tell me that's not good enough and and we can run numbers all day long and and for some producers it is, for some it isn't.

[00:04:06]But, you know, as I remind everybody sometimes the market doesn't care what it needs to be for your operation. It's going to do what it's going to do. So, I think the producers got to look at some of those levels, look back over the last few years, decide if they make sense. There's a lot of ways to to put a floor under this thing and protect in case what you just said happens. We break through some support, weather ends up being really conducive to another big crop. That's going to be a third year in a row and that'll be tough to sustain high prices if that happens.

[00:04:35]>> We're talking with Tyler Schau from agmarket.net here on AOA. Let's look at the cattle complex. Kind of quiet trade there as we work through Thursday's session.

[00:04:46]The cash market been pretty quiet as we talk here this week. Cattle though, I mean, plenty of volatility. We saw end of last week ahead of the holiday. We had some sell-off days. Then we kind of rallied back Tuesday, Wednesday.

[00:05:02]It just feels like maybe there was some headline-driven selling the fundamentals kind of came back into play in this cattle market, Tyler.

[00:05:10]>> Yeah, you're precisely right. This is I mean, this has been the story of the cattle market for really, in my opinion, the last 2 years.

[00:05:18]You know, the fundamentals, the cash market, all those things you just pointed out, strong demand, low supply have obviously led us to where we're at right today.

[00:05:29]The futures market has these little gyrations and these sell-offs that kind of spook some people for a day or two, but the cash market just doesn't give in and and I think that's a testament to the fact that A, as I said, you've got really good demand for the the boxed beef. I think the boxed beef cutouts like 394 something just just shy of $400. Uh so that means demand is rolling strong. And you know at the end of the day there just aren't enough cattle out there. Uh I think I looked uh the the slaughter numbers significantly low uh running below last year uh and last year was below the year before. So uh that's going to keep this thing supported as Packers are out there trying to find animals, feed lots are out there trying to find animals. Uh and that's the the support we need.

[00:06:16]>> I talked about this a bit too. You know, we saw that big placements number on the on feed which isn't necessarily surprising because there's a lot of grass that's been burning up in the plains. And so what do you do? Well, you got to move cattle into feed lots just for survival here, Tyler.

[00:06:34]>> Yeah, and there you know, that that's kind of our read on that. There was a lot of cattle got pulled forward.

[00:06:40]You know, a lot of cattle that were destined to go to grass and and uh that grass isn't there. So producers are cutting them loose. Moving to the feed lots. If you look though year to date, I think placements are still 1% below a year ago. And that's probably with quite a few cattle pulled forward. So be interesting to see what happens as we continue to move through the summer.

[00:07:01]>> Folks can go to agmarket.net for more information. Reach out to Tyler anyone on their great team. Tyler Shaw, always good to talk with you, my friend.

[00:07:12]We're up against the clock in this segment, but have a great weekend and we will talk to you again real soon.

[00:07:18]>> Hey, take care, Jesse.