DeLong Commentary

Midday Grain Update

10:23a

🔴 Corn: After yesterday’s sharp rally, corn is unsure of a direct, playing both sides of the open.  July 2026 is trading 1.25¢ lower at $4.75, with December 2026 following suit at $4.97.

🟡 Beans: Soybeans have been straddling the unchanged line after running into key resistance overnight. July 2026 is sitting 2¢ lower at $12.11, with November 2026 holding in the unchanged to slightly higher range.

🟢 Wheat: Wheat is managing to hold onto modest gains with July 2026 trading 2.4¢ higher at $6.67.

Headlines:

Iran Peace Talks Shift

Iran has walked back progress in negotiations, now demanding uranium enrichment rights, war reparations, release of frozen funds, and a full U.S. military withdrawal leaving the two sides far apart. President Trump indicated on Truth Social Monday that Gulf leaders asked him to delay a strike scheduled for today, suggesting a deal remains possible. Until something changes, the Strait of Hormuz stays closed, and global energy and fertilizer deficits will keep building. Energy shortages are expected to intensify through June and July. The fertilizer impact is more of a 2027 story,  but growers would be wise to start paying attention now.

China Trade Continues

The $17B annual ag purchase commitment from last week’s Trump-Xi summit remains unconfirmed by China and short on details. Skepticism is warranted as China’s compliance history is inconsistent though it did follow through on last October’s soybean commitment. China’s weakening economy adds complexity, with April retail sales growing just 0.2% against a 2% expectation and industrial output at its slowest pace since July 2023. That economic pressure, however, may actually drive compliance. Xi needs a trade win to maintain Party standing. Until the commodity breakdown is known, fund managers are unwilling to hold short positions in potential purchase targets, and that hesitation is providing a meaningful floor under prices.

Crop Progress

Planting continues to advance at a solid pace with corn at 76%, soybeans at 67%, and spring wheat at 73% planted as of May 17, all ahead of average. Winter wheat remains the concern, with conditions at just 27% good to excellent versus 52% a year ago. Internationally, Australia is becoming a story worth watching with elevated input costs from the Iran conflict combined with El Niño dryness has farmers cutting wheat acres significantly. Analysts estimate the harvest could fall 16–41% from last year, potentially reducing exports by up to 10 MMT. In an already stressed global wheat market, that’s a number that matters.

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