Hard to push back Turnaround-Tuesday after Monday’s gains. It’s the month of May.
May 5, 2026
It’s Tuesday morning; the Strait of Hormuz is still closed, with 1,550 ships still trapped in the Gulf and only a few transiting out each day. Bear in mind, not one of those ships has any intention of coming back to get more fuel or fertilizer until hostilities are considered over. Meanwhile, grain futures slipped into selling mode on Tuesday after Monday evening’s price strength. Crude oil is relaxing, and back to 103 on the spot contract, off $3.35, as no major missile vaulting or bombing is taking place currently.
A feature yesterday that is not at the forefront of trading this morning is that southern Brazil is becoming warmer and drier. There is little precipitation forecasted for this area over the next two weeks and they will have elevated temperatures. This is the reproductive time for the large second corn crop that Brazil produces and exports. For now it’s not considered a major event within time it will limit selling interest as concerns will grow that the export pace out of Brazil may not be as robust in July as previously hoped and anticipated.
The rapid US planting pace, released yesterday afternoon, had a delayed effect on trade, but it is discussed this morning, as the areas behind average progress are few. The only real crop concern is that winter wheat conditions continue to decline. Even though yesterday afternoon’s wheat condition report showed the good/excellent category increasing by 1%, this is due to good wheat maintaining its appearance. Keep in mind, we have said the Eastern third of Kansas and Missouri has strong production capabilities, while the Western third of Kansas and Colorado is where the crop is falling apart. Note that in yesterday’s data, the poor/very poor category for Kansas, Nebraska, Colorado, and Montana continues to increase as the crop deteriorates (with less middle-ground “good” condition wheat). This morning’s weakness in wheat is tied more to moisture heading for eastern Colorado in the form of snow that the market quickly pounces on and challenges weak longs.
As of this morning, the Chinese/US Summit is still on for May 14-15, with markets finding underlying support for soybeans and corn to be in the mix from China after their absence. It is hoped that China will remove its 10% tariffs on US soybeans, while the US grants access to computer chip technology. (Any buying that was to occur ahead of the summit would come from state purchasing firms that can buy without tariffs if given the green light.)
Yesterday, the cattle liquidation that started from Friday’s contract highs continued in earnest, with June live cattle having to go right to important support in the 249-250 breakout value on the continuation chart before closing well off session lows. Meanwhile, feeder cattle stumbled in the session and only produced a last-minute bounce that did not absorb the bulk of its losses, similar to live cattle. The cash feeder index yesterday showed a gain of $ 1.51 and is at $ 375.54, so here we go again with wide swings from above to below cash. Box beef values yesterday had choice climbing $2.54, with select higher by $3.55. Beef margins for packers are now at a loss of nearly $100/head, but the byproducts continued to climb, keeping Packers solvent. As usual, Tyson’s profits in poultry are what’s keeping them in the black.
On the charts, it’s not unusual for bull markets to correct for 2-3 days. By day 4, buying typically returns (yes, that’s today). If the setback on the charts is nothing more than a technical algorithm run, we should see feeder-cattle discounts to the cash index removed again, with live-cattle futures resuming the optimism of the uptrend the charts reflect. Anything otherwise implies something nefarious is afoot, and an unusual nonseasonal trend is developing in feeder cattle.
Any Questions and to inquire about Livestock Risk Protection Insurance Call: 701-222-0221