The grain trade breaks for the third day in a row and may get blindsided by Iran over the weekend on a deal change.
May 7, 2026
Another lower grain trade again today, as crude oil lets the air back out of the marketplace. Even though oil prices have not violated yesterday’s lows yet, the grain markets will dutifully do that anytime. The best performer yesterday, Kansas City wheat, is the worst performer this morning, as the market always loves to even things out when pessimism is in control. Freeze-drying the Kansas wheat crop for the umpteenth time doesn’t seem to catch any concern anymore, as what is dead is dead and what is not is perceived to produce something is always too much.
A response from Iran is still awaited, and we may not get one till over the weekend. I have this nagging suspicion, since people usually never change, suspecting that the mullahs are going to do a “Zelinski” and hold out on the deal, still indicating a need for nuclear ambitions (obviously for civilian use only), something that the Pres. Trump will not agree to. We could have a bombing resume over the weekend (classic Trump style tactics when the markets are closed) and energy values moving violently higher early next week.
This liquidation phase in the grain market, since the opening-week highs, should run its course today or tomorrow, as the market will shift its focus back to Pres. Trump’s trip to China next week could renew thoughts that we could actually sell grain to China. China will obviously enter negotiations using its 10% tariff on soybeans and 15% tariff on other crops as leverage in talks with the US. Keep in mind that every time we go to bat with China on trade deals, we usually end up with them agreeing to buy US soybeans/grains. This current swoon in prices could be just another buying opportunity for end users.
A big hole is developing in the Brazilian winter safrinha corn crop. Southern Brazil is turning warm and dry, and these conditions are associated with developing El Niño. Many do not see it as a concern, but record yields are not attained this way, and many are already touting record yields for Brazil’s corn crop. Look for this to get dialed back in the months to come. Another concern is that farmers’ planning in Brazil for the next soybean crop could be affected, especially if this super El Niño develops. This is keeping the sell side of soybeans in check, that after three days of selling, we are just back to the top side of a seven-week trading range.
Export sales again were solid for corn this morning at over 1.3 MMTs, creating a situation where the USDA’s optimistic corn export number may need to grow another 100-200 million bushels. On paper, this pulls the new corn crop carryout back under 2.0 Bil Bu. Add to that the prospects of the corn acreage number being under 94 Mil acres, could all of a sudden have new crop corn taking on a whole new look of concern, especially if July weather is not optimum.
Cattle futures were higher again for the second day in a row yesterday, but the recovery was not as strong as the losses that occurred Friday/Monday. This questions the cattle market’s ability to keep rolling higher today, even though energy values are back at yesterday’s lows. Cattle lots are current, with average carcass weights at 948 pounds. That’s up 38 pounds from last year, even though slipping eight from last week.
Yesterday’s cash feeder index remains stagnant as it slipped $0.14 at $375.19. Meanwhile, the cattle auction yesterday saw some loads sold at $255, while Texas had light trade at $256. As expected, our imports are high, and exports are low, as revealed in the latest monthly figures. Imports were the third largest monthly figure at 599 Mil pounds in March, while exports at 586 million pounds for the whole first quarter came in at 82% of a year ago. This is the lowest on the record books going back to 2016. Look for cattle trading action to be more two-sided today.
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