Traders "Buy the Dip" in the Corn/Soybean Markets - Wheat Struggles

Ajouté : 2026-05-09

[00:00:00]Morning, guys. It's Friday, May 8th, 5:24 a.m. Central time. Grain markets are mixed this morning. Mackenzie's off today. Matt Bennett is here. Good morning, Matt.

[00:00:09]>> Morning, Joe.

[00:00:10]>> Let's start off with yesterday's price action. Wheat futures fell sharply. The nearby July Kansas City wheat contract lost nearly 20 cents per bushel. The Sep 26 spring wheat contract lost nearly 17 cents. The July SRW contract lost only 5 cents. Some US wheat areas, including western Kansas and eastern Colorado, caught rain over the last few days, although many boots on the ground sources believe it's too little too late. The Kansas Wheat Commission will run their annual crop tour next week.

[00:00:38]Corn futures recovered late on Thursday.

[00:00:40]The D contract bottomed at 483 prior to closing closer to 490. Soybean futures also recovered. November contract finished about 9 cents off of its daily low. Before we get into the charts, let's look at some of this um HRW wheat weather. This just this isn't enough to like save the crop, is it?

[00:00:58]>> No. I mean, it's not. I mean, you talk to guys out there and they're going to tell you that uh you know, this crop's been through, you know, hell. Uh you obviously had frost freeze events you've had to deal with. I think one of the things yesterday that maybe hurt us is that it didn't get quite as cold, you know, as what they were projecting. And but yes, this rainfall certainly is something people have watched. The problem is you get the wheat so far along in the game and there's just not much. stock, you can't resuscitate it.

[00:01:24]Um, you know, you may be able to hold on some weight, but I I do think in a lot of areas it's too little too late.

[00:01:30]Probably not for everyone, but um it's been a frustrating year for a lot of those guys. The western two-thirds of Kansas just had horrible weather.

[00:01:38]>> You probably saw the results of the Oklahoma wheat tour that was out earlier this week. They're talking less than half a crop basically. Um the Kansas wheat tour is going to be next week. I don't think it'll be as bad as Oklahoma, relatively speaking, but I don't think it's going to be good. No, I don't think that the yield will come in as low as Oklahoma, but I mean, you're talking a lot more acres that are still going to have a pretty massive hit versus normal.

[00:02:00]So, yeah, it ain't going to be pretty.

[00:02:02]>> Okay. So, next 7 days in terms of the forecast. There's there's nothing in terms of rainfall. Maybe you get some rain during the 8 to 10 day period in the extended forecast, but now you're talking I mean, you're talking the middle of May for the HRW wheat crop.

[00:02:16]It's just like even if these rains fall, I don't know that that's going to be helpful either.

[00:02:20]>> I agree. I mean, again, it's just you can't do anything to something you've already tried to kill, you know.

[00:02:26]>> Okay, let's go to price action. So, wheat was down in the Kansas City at least, down almost 20 cents yesterday.

[00:02:32]Um, do you think that part of this is like, hey, we've already discounted the drought. We know this is a short crop and now we're looking around, traders are looking around, US wheat's really expensive relative to any global competition. Is that the story now?

[00:02:46]>> Yeah, I believe so. I I you know to me we've probably let this thing run its course for the time being. I think longer term you know the wheat market actually could see some support still. I mean the thing we always have to remember is that US crop is not the the end all be all by any means. You know we're a small player whenever it comes to this world uh wheat export situation.

[00:03:08]But I think moving on out farther, you know, I was doing a video yesterday with with Snodgrass, you know, and he he was talking about how this strong El Nino affects, you know, different parts of the world, you know, and one place that's uh starting to dry out that they're really concerned about long-term moisture is Australia. You know, you start talking Australia or Black Sea region, it's a little bit bigger deal than the US. Uh but I think on farther out, you could kind of cut into this wheat situation, especially whenever you're looking at the uh the issue with fertilizer. I mean, ura is is not cheap.

[00:03:38]It's not going to be cheap for a while, and ura is your main source of nitrogen for, you know, your wheat crop globally.

[00:03:44]So, yeah, I do think the wheat story isn't completely over. Uh, but for the time being, I think the excitement's going to definitely be died down. What I've been saying about the fertilizer situation is that I think it will impact global production probably more so outside the United States than in the United States, but that it's it's very difficult if not impossible to quantify exactly what the impact's going to be.

[00:04:06]Like I think you're going to see some shorter crops. I just don't know what what that means in terms of mathematics.

[00:04:12]You know, >> I agree. It's so hard to put your finger on. I mean, we're in a little better situation here in the US overall. It's still going to be tough, you know, for some growers, you know, if they don't have a great year in 26. And I'm talking yield-wise. I think from a financial standpoint, most people should have a better year than they've had these last three years. But you get outside the US where you're more reliant on imported fertilizer. Uh, you know, yes, we have imported fertilizer here, no question.

[00:04:40]But I mean, Brazil is almost exclusively imported fertilizer and you can see some pretty serious production uh cost increases versus what we're going to see here.

[00:04:50]>> We do have a Brazilian production story coming up. Before we get there, let's go to the corn chart. We had some dip buyers emerge on Thursday. Dorn bottomed 483. We're trading closer to 489 early this morning. So, we finished yesterday's session well off of the low.

[00:05:06]um large money managers, the funds have a pretty substantial net long position.

[00:05:12]I would probably argue that you've still got an uptrend in place here. I think the simplest way to look at it is, hey, you draw a trend line from the January low through the April low. We're still sitting above that. I I'd call yesterday's action very positive.

[00:05:24]>> Absolutely. You know, you went down under the 50-day yesterday and uh what' you do? You found some buying.

[00:05:30]Basically, July corn, de corn, they all did what they needed to do yesterday.

[00:05:36]You know, they they caught hold, if you will. Finally found some uh you know, if you're out in mud and found some some good ground to, you know, kind of spin off of and that's exactly what we saw happen yesterday. It looked rough for a while, but buying came in and and the closes looked pretty decent overall. You know, I still think the corn market has a story. I think it'll be pretty interesting to see what the report does next week. I don't see any massive shifts, but I I will be very interested to see how the USDA thinks this demand holds together. But yeah, we did what we need to do yesterday.

[00:06:05]>> I'm very fortunate to have uh premium subscribers all over the country. And what I'm being told from um from the eastern cornbt to the western cornbt is that grain buyers have bought to this point a whole hell of a lot more new crop corn bushels than they have uh say by this point the last two or three years. Farmers have been pretty aggressive about getting this stuff priced. Uh first question, have you heard the same thing? And second thing, what does that mean for the market?

[00:06:34]>> Absolutely, I've heard the same thing.

[00:06:36]What does it mean for the market moving forward? You don't have as much selling pressure, you know, whenever you get into a rally type situation. Now obviously it's way too early for this discussion but in years where it's say a normalsized crop and a lot of growers have stepped in and sold earlier you know the less farmers that there are uh to sell into that type of uh rally the more extreme the rally could get sometimes because you just don't have the uh the offset there. Uh and so I always been telling people here there's nothing wrong at all with stepping in and selling at a profitable level. I mean that's what you should do. No, I mean, can you blame a guy for locking in a profit when it hasn't been there for three years?

[00:07:16]>> Heck no. Do it. Incrementally reward the market whenever you're making money, but also consider, you know, that if you do get in a situation weatherwise, hey, we're already talking three and a half million acres less than a year ago. What if that's five? I mean, I don't know what the number is, but it's five. Let's say it comes in five under, you know, and then we don't get this uh this freaking dance afterwards, you know, like every report the rest of the year where the USDA comes in and raises harvested acres. You know, if we don't have that again this year, uh then you're probably not going to raise a 186 again back to back, especially it's not been the best start. Not been terrible, but not been the best start. Uh obviously, you get into a weather deal and the premium that could come into this thing could be explosive. And so, I would at least want to have some flexibility if you get super aggressive, but never anything wrong with selling at a profitable level. Okay. So, because of all the uncertainty that you mentioned, do you believe that perhaps downside in new crop corn prices is maybe limited for the next uh call it 6 weeks until we know a little bit more about acres and weather and that sort of thing. Maybe call it even two months.

[00:08:28]>> Yeah, I believe so. I think where your downside would come in is let's say you get on the back side of these storms finally. I mean, clearly a lot of people just continue to get hammered. Uh but if you come in here, let's it's not going to be this week necessarily, but let's say next week you come in and you plant 30% of the corn crop. Yeah, I do think that there could be a little bit of pressure on the market where people breathe a sigh of relief. Hey, this thing is uh definitely going to come in, you know, a normal time frame. The other thing would be is if uh you know let's say the US Chinese situation uh G and Trump uh you don't see any positive results there corn or beans you know if that's the case you could see a little pressure but my personal opinion is that serious downside risk is not going to occur until you get into a bearish uh June 30th number. That that's just my personal opinion.

[00:09:18]>> I think the the one other thing you didn't mention could be this Iran thing and crude oil. Crude oil drops 20 bucks.

[00:09:23]it's probably not going to help the corn market. Um, let's look at soybeans. So, soybeans also found some dip buyers yesterday. I'd probably argue that this uptrend remains intact. Trump and G are going to meet next week. I believe it's next Thursday is the 14th when this thing begins. Um, some people think that there's going to be I don't know if you'd call it an announcement, but maybe like a confirmation of yeah, we are going to buy 25 million metric tons of new crop beans. We haven't seen them buy anything yet, but uh maybe it's coming.

[00:09:50]Yeah, these handshake agreements, I think people are getting tired of them, you know. I mean, it needs it needs to be a hey, this is what we're going to do. This is why we're doing it. U you know, and then we're going to work our way through some of this other stuff, but this is our formal agreement, if you will. It'd be nice to have some signatures, which I mean, shoot, you know, what does that mean? You know, you you could get in spat and screw that up, too. Uh but bottom line is I think that this bean market looks good as well. it.

[00:10:16]You you had buying come in once again where you where you needed it to. Um do I think that we're going to take off and go substantially higher? The market has done better than I thought it would do um the last two months. Be honest with you. Okay. Um, with that being said, I do think if I had a whole lot of old crop beans or new crop beans, I would still be strongly considering, hey, what what kind of money can I make here, you know, and what can I do to lock in a worst case scenario because uh I know everyone's different. We talked about this on Wednesday. Everyone's different on where they can make money, but I know a lot of growers that can make $12 beans or 1170 beans. I know I know a ton of growers that can make those work and I know that they will be kicking themselves squarely in the rear end if you turn around and take this thing a dollar lower. I wrote on this chart too many soybeans in Brazil. I was going to put a question mark after it, but it's not a question, it's a fact. There's too many soybeans in Brazil and they are priced on the export market drastically below uh the way we are priced in the United States. Yet the market's holding together just fine. Um is that is that going to be something that comes to bite us here eventually? I feel like you can't ignore the fundamentals ever. You know, you I know a lot of people are either more technical or they're more fundamental. I've always been a little bit more on the fun or not a lot more on the fundamental side. You got to understand what is the world situation?

[00:11:39]We're we're not uh super burdensome, but at the same time, we're not in a position where we're just uh you know, tight as could be. What has the focus been on the market that's ran this up?

[00:11:49]Well, I think it's been more of a focus on demand more so than supply. You know, people are talking about, hey, you're going to be using We know what our crush has been. Crush here has just been incredible. And we keep posting really big crush every month. I mean, Brazil's talking about a what 100% soybean oil uh diesel mix. Uh other countries are talking about that's been the focus of the market in my opinion is that demand continues to grow. But I mean, we also got to consider, you know, what's Brazil going to do a few months from now whenever they're thinking about this first crop uh if they can't get fertilizer cheap. I mean, are they going to plant even more soybeans in that first crop, you know, and less corn? I don't know. I mean, you're going to you're probably going to gain US acres here as well. So, yeah, I I'm concerned that this big supply, to answer your question, is going to hurt us on down the road. And I wouldn't trust this this market too much. Yeah, it seems like the market's just been focused on, you know, soybean oil rising along with crude oil, RVOS's, uh, strong crush numbers, that sort of thing. And like the export thing and the Brazil thing hasn't hasn't been the focus, even though maybe it should be. I don't know.

[00:12:52]>> I I agree. I mean, multi-year highs this week in soybean oil, you know, and so you know, you take the shine off that a little bit. Obviously, war premium comes out uh on the oil market. Vegetables go down, soybean oil went down, and that's what we saw on the bean market. Okay, let's go to the Middle East. US and Iranian forces clashed near the straight of Hormuz on Thursday. American troops struck Iranian missile and drone launch sites after three US ships came under attack in the area. No ships were hit.

[00:13:19]President Trump says uh a month-long ceasefire is still technically in place, but the situation is fluid. Iran is expected to respond to US peace proposal within days. Pakistan is acting as a mediator. Here's Trump on Truth Social yesterday, and I'm not going to read the whole thing, but uh with regard to Iran, he said, "A normal country would have allowed these destroyers to pass, but Iran is not a normal country. They are led by lunatics, and if they had a chance to use a nuclear weapon, they would do it without question, but they'll never have that opportunity. And just like we knocked them out again today, we'll knock them out a lot harder and more violently in the future." Um, seems like everything's going really well.

[00:13:57]>> Yeah, seems like it's going great.

[00:13:59]ceasefire whenever you're lobbing bombs.

[00:14:02]I don't know, Joe. I mean, call me a conspiracy theorist, but there's a lot of money made for people in the world uh or for a handful of people in the world whenever there's bombs flying. And so, I I haven't been of the opinion for quite some time that this was going to get over quickly. I mean, yes, it's probably going to have times uh where it's going to be a little bit less active, let's say, but obviously this is a freaking joke right now. You have no idea what's going to happen here and there's no way for us to know. I mean, you could only expect that over the weekend something's going to happen uh one way or the other.

[00:14:37]And I can assure you someone's going to go home with a position here on Friday and they're going to make a lot of money on Sunday night or Monday. That's just my opinion.

[00:14:44]>> On a on a side note to this, I've had a lot of questions from people about what you just said. like Joe, why don't you mention like the insider trading that's going on um you know that h that's happening around these these events and these Trump comments and I'm like yeah it's definitely happening but it's been happening my entire career in every market under every administration so I just don't see it as being fresh news or anything that's really of interest to me this is just power for the course >> I agree with you I think that a lot here over the last few weeks uh months if you will I felt like there's been a lot of very interesting timing things whenever the markets close, whenever it's over the weekend. Uh, and maybe I just notice it more, you know, because I'm following markets obviously, uh, some of these markets that are moving very rapidly.

[00:15:30]I'm following them even closer than I ever have in my career. Uh, but there's no doubt. I agree with you. It's been happening, but I think that it's a little bit, uh, people are getting a little more skeptical and saying, "Hey, we see this. We see what's going on."

[00:15:43]Well, you've got more social media now, like you've got everybody, you know, talking about, oh, we saw we saw this much volume trade at this price 30 minutes before the event. But that that has always been happening for for decad >> for decades. It's been it's been happening. I mean, if you're surprised that some sort of DC insider or somebody in Congress is like insider trading information, I mean, get out from under the rock you've been living. It's been happening for decades. Uh, let's go to Brazil. Brazil's corn harvest is expected to decline this year. private group Agro Consult pegged the crop at 140.5 million metric tonses. That'd be down 7% from the previous year. I think based on their estimates, the biggest concern is the country's second corn crop, which makes up the bulk of what of what Brazil produces. It's on track to fall nearly 10% compared to last year.

[00:16:26]So, um if you look at I just wanted to throw this in for some context. Like Brazil is a tiny corn producer compared to the US, but they do still matter.

[00:16:34]They provide us with some export competition in the right years.

[00:16:37]>> Yeah. No, absolutely. I mean, that's one thing I always try to tell people is I know we talk about Brazil quite a bit.

[00:16:42]We talk about them because they become such a big player in the export deal, but a lot of years they've been about a third of the size of the US crop. Now, could it be even lower than 140? Yeah. I mean, USDA is at what 132 right now.

[00:16:55]>> 132. Yeah. Big disparity.

[00:16:57]>> Big disparity. To me, I don't think USDA does much this next week. The other thing I'd say about this Safrina crop is that, you know, about 20 25% of it went in the ground a little later than what they would have preferred. First of all, second of all, you know, you look at uh the right part of your screen, Migroso, parts of a a big chunk of eastern Brazil is actually pretty dry right now. The NDVI have looked good up to this point, but they're dry and the forecast does not look like they're going to get a whole lot of rain. So, I don't think that crop's going to finish great. Uh, so we may finish closer to what USDA said than than what some of these other folks down there have said. U, I think 132s could still be in the cards, which, you know, would be important if you continue to keep, I guess, world supply from growing, you know, at a time whenever US had such a huge freaking crop.

[00:17:46]>> Yeah, I think that this has been kind of an underlying positive like the idea that that they'll be down. that disparity between USDA and the private groups in Brazil like has been kind of a normalish thing the last several years and USDA is still talking I mean if if you want to just say like percent decline USDA is talking a 3% decline this group's saying a 7% decline that's that's a big difference but >> I mean >> we'll see where they settle in I don't know >> let's go to uh this is the story of the day health officials are concerned following a hivirus outbreak on a cruise ship the ship called the Honda saw three people die after passengers went on a bird watching trip that exposed them to the ha virus, a rare illness usually spread through contact with rodents.

[00:18:27]What makes this outbreak unusual is that the strain involved called the Andes virus can actually spread between people and through close personal contact. Uh people are saying this is the next co map.

[00:18:40]>> I don't think so. But I hope >> I mean >> it is what it is. I I sure hope not a whole lot of people get sick from anything. I'll just say that up front, >> of course. Uh but clearly um there's always this, you know, type of panic. I saw I read yesterday they're trying to track everyone down that was on the ship.

[00:18:57]>> Of course they are. Yeah.

[00:18:57]>> Good luck with that. I mean hopefully they do. Hopefully they get them all all tracked down. But I I do think that >> let's just put this to the side.

[00:19:06]Whatever the next co is, if this is, you know, I think that it's going to look a lot different this time around. I mean, clearly people learned a lot uh the last time around as far as what they're gonna the the levels that they'll be pushed to what they're willing to do, if you will.

[00:19:22]Um but yeah, I I think people handle it a lot different. I I sure hope that this doesn't turn into a massive issue, though.

[00:19:28]>> I don't think it's had any impact whatsoever on any financial market. Not yet. I just think it's worth it's worth noting, put it that way. Okay. Uh Successful Farming had this article out yesterday and I thought it was interesting. They talked about um corn planting and conditions and basically variability across the cornbt. Some places were too wet, some places were too dry. Um it was it was an interesting read. I pulled this map. This is the Iowa State map. So this is precipitation rankings during the month of April. Um if you're ranked number one, like the state of Wisconsin was in most areas, that means you had the wetest April out of the last 134 years. So Wisconsin was very wet. Eastern the eastern half of Iowa was very wet. Um, a lot of Missouri was very wet, Michigan was very wet. Um, what is your general take right now on planting conditions, uh, both in in the past and and what we're going to see here over the next couple weeks?

[00:20:21]>> Yeah, I mean, whenever you look at the progress, if you will, it's normal overall. You know, if you look at overall progress is normal. The problem I believe is whenever you look at a map like this, I mean there's some pretty massive production, you know, in the areas, especially in eastern Iowa for instance, parts of Illinois have continued to get hit as well that are really big production areas. Uh where I'm at, I I don't have it as bad as what some of the folks in eastern Iowa have, some of my customers that I've talked to over there. But at the same time, we're not done planting corn and and we're wet. You know, we're supposed to get rain again today. And so I I what I think variability is a great word for it because there's no doubt some people are sitting in a pretty decent spot. Uh but the other thing to note is that uh GDUs here over the last couple weeks. We haven't had any. You know, I mean you're having a hard time with some of the stuff that was planted uh just getting it to come out of the ground. We've had rain after rain which has kept the soil soft to where you could you'd be able to go ahead and make it up. But the problem is it has no push. So it's not been a great start by any means. uh you know, it still doesn't mean that we can't have one heck of a big crop. It's just not been ideal for a lot of people.

[00:21:30]>> It's probably not ideal. Let's look at the drought monitor. Uh without running through every statistic, there's not there's not any drought to speak of in the central cornbt where you've got drought is in Nebraska in uh the southern half of South Dakota and then of course the HRW wheat areas we've been talking about for months now. Um Kansas and Oklahoma and Texas and Colorado. But this this doesn't tell you everything that's going on. I think the map that we showed before where it showed you how wet we've been is maybe the bigger deal for the corn belt right now.

[00:21:57]>> No, it absolutely. I mean, you know, if you asked every farmer, you know, would you rather be uncomfortably dry in the spring or uncomfortably wet in the spring and they'd tell you rather be dry? You know, if you get a dry start and then could spoon feed the uh crop, that would be ideal. you know, because from a standpoint, uh, from uniformity, bottom line is you would rather be in a little bit drier situation than a wetter one. But yeah, I mean, you look at that map, what, uh, four months ago. And right where where I'm at, I mean, I remember you saying, "Hey, this is as dry as it gets." And what have we had since then, we've had uh, I think so far this year, we're pushing 20 inches of rain. I mean, it's uh, we've had all kinds of moisture, but yeah, there's no drought in certain areas of it. that one corridor, you know, Missouri up through Illinois up to Ohio has just been continued to get hit.

[00:22:45]Whereas south of us, parts of Tennessee are dry as bone and then you get it to the west and obviously they're in full-on drought. And so it's been a halves and have nots type start so far.

[00:22:56]>> Given what I know right now, and I'm no aronomist, but I'll take the under on 186 national corn yield this year, given what I know today.

[00:23:03]>> Yeah. I don't want to do double or nothing. I still got to pay you by the way, but uh you'll take the under on 186.

[00:23:08]>> Yes. Um, that that's that's a you're being pretty risky.

[00:23:12]>> I know. So, USDA is going to have its its first set of official new crop balance sheets out next week. And I think in the Feb outlook forum they had like did they use 183?

[00:23:20]>> 183.

[00:23:21]>> Okay. So, that's probably where they're going to start. I don't think they're going to start with 186.

[00:23:24]>> It'll be 953 and 183 almost surefire thing. Um, you'll probably see a carry out right around 19 is my guess.

[00:23:31]>> Okay. We'll talk about that early next week. Uh, cattle got beat up pretty good yesterday. Feeders were down like six and a half bucks. Any thoughts? Yeah, I mean the thing with the the cattle deal, it's interesting wherever you come in, corn's down, feed grains are down, but yet cattle are still lower. Uh I think one of the things yesterday that really kind of got into this is people are very concerned with the US talking with Brazil that maybe we're going to bring more beef in. You know, uh I don't know from a fundamental standpoint, numbers wise in the US, you can't get to uh bearish this cattle deal. But I don't know, in my opinion, we we it's hard to forecast it. I mean, I just don't know, Joe, if you if you make new highs or not, but you're still at very profitable levels. This cash market's on fire. And so, uh, you know, I don't expect this thing to go to hell in a hand basket by any stretch of the imagination. But, you know, continuing to make new highs. It's not just going to continue for perpetuity.

[00:24:24]>> All right, guys. Outside markets on Friday morning. The S&P 500 is up 34 points, closing in on 7,400 in the futures. Uh, Treasury's up just a little bit. Crude oil is down 14 cents at 9467 in the June WTI. Bottomed in the $89 neighborhood yesterday. So we're we're about five bucks off yesterday's lows.

[00:24:40]Uh Matt, thanks for joining us, guys.

[00:24:42]Have a wonderful weekend. Stay safe.

[00:24:43]We'll be back on Monday.