Daily Market Cast: 5/20

Daily Commentary: Wednesday, May 20, 2026

Transcript

SPEAKER_00 0:00

Hey everyone, this is Allison giving you today's Daily Green Market commentary for Wednesday, May 20th. And losses were present across the board here today as the trade shifted from excitement over potential China demand to the harder part, which is waiting for confirmation. And that is the problem with headline markets. The first reaction is emotional, the second reaction is skeptical. But China's Ministry of Commerce confirmed there was a guiding target between the US and China aimed at expanding two-way agricultural trade, but didn't confirm the US government's claimed $17 billion figure on USA purchases. So until China officially acknowledges the number, or even more importantly, until purchases show up on the books, the market is left guessing. So promises are helpful, but actual buying is clearly better for the trade. Greens were also pressured by a sharp break in crude oil today. We saw WTI falling more than 7% after President Trump said the US was in the final stages of talks with Iran. And that matters because part of the recent commodity strength has been tied to geopolitical risk, energy strength, and inflation concerns. So when crude takes a step back, some of the risk premium comes out of grains too. So that uncertainty put pressure back on grain prices today. The trade wants to believe China's China demand is coming, but after years of terror fights, broken optimism, and headline whiplash, traders are not going to price the full story on words alone. They want sales, they want shipments, they want proof. So today was not necessarily bearish because the China story failed. It was weaker because the market is still waiting to see if the China story is real, while also pulling back some of the geopolitical risk premium that helped fuel the rally. So corn traded lower with the broader grain complex today, but weekly ethanol production for the week was still supportive, just not wildly bullish. Production improved and remains above last year, but corn use for ethanol is still running below pace, especially the USDA's uh pace to meet the current forecast. And this has been happening now for the fifth consecutive week. So that's the key takeaway. Crude inventories were bullish in this week's report, but gasoline and diesel were more mixed. And with crude breaking hard on Irantack, corn lost some of the energy-driven support that helped fuel the recent rally. So technically, July fell through the 50-day moving average today with next support at last week's low of 455. Today the July contract closed nine and a half cents lower at 465 and three quarters. Support for December sits at 480, and today it did close at 489.25, down eight and a half cents. And soybeans traded lower with the broader risk off tone, but the story remains a bit more complicated than simple weakness here. China has indicated it would accept some increase in U.S. tariffs to a previously agreed level and uh continue talks to extend the trade truce. And that keeps the door open, but it doesn't give the market the confirmation it wants. This trade still needs some purchase commitments, sales, and shipments. Chinese customs data did show April soybean imports from the US more than doubled from last year, and that's supportive. But total April soybean imports still came in below expectations for China. And that's just another reminder that headlines help, but actual demand has to follow. Product markets remain the backbone, though, of the complex. Crush margins have eased a bit here, but remain strong historically. Soybean oil is still profitable for biofuel production, even though US soybean oil has priced itself out of the global vegetable oil export market. So that keeps domestic demand supportive, even if export competition does remain pretty slow. July soybeans did lose 9.3 quarter cents, closing at $11.99 and three quarters. November selled 9.5 cents lower at $11.93.5. And wheat traded lower, but once again managed to limit losses compared to corn and soybeans. Frost across the northern growing areas and in parts of Canada overnight offered some support to spring wheat, helping Minneapolis at least hold up better here during the session. Chicago and Kansas City still finished modestly lower, but the relative strength here tells the story. The broader wheat narrative has not changed. Winter wheat harvest is getting closer, but the trade still does not know exactly how much damage has been done to that crop. Add in weather concerns for spring wheat and ongoing issues in parts of Russia, and wheat continues to carry more fundamental support here than the rest of the grain complex. So even on a risk-off day, wheat has um the market willing uh not at least the least willing to sell. Uh July Chicago wheat lost six and three quarters, closing at 660 and a half. July KC ended a nickel lower at 698 and three quarters, and July Minneapolis settled at 604.52 cents lower. And what an ugly start for the day across livestock, um, with sharp losses in both live and feeder cattle. And the main headline tied to the sell-off was news that Cargill announced a lockout at its Fort Morgan beef plant, citing safety concerns amidst stalled union negotiations. So the trade, however, is looking beyond the labor dispute in itself. Packer margins have been sleeping deeper into the red, and traders remember that reduced kills and slower chain speeds helped packers improve margins this past winter. So that has some wondering if this could be the start of a broader slowdown in slaughter pace. But despite today's uh early sharp break, the bigger cattle fundamentals have not changed. Uh supplies of market ready cattle remain tight along with a short supply of feeders, and it took most of the day, but the bulls did fight back in the feeder cattle arena. And after being as much as $5 lower, the bulls came back in and defended their long positions, and by the close, feeders were higher, closing as much as seven dollars off the lows. So the sharply lower feed costs also gave uh feeder bulls some momentum as well. Live cattle didn't fare as well as they did print some triple digit losses, but they managed to close over $2.50 off the lows. So June closed down $1.27.5 at $253.27.5. October was off $2.52.5, closing at $236.77.5. And May feeders expired tomorrow and they closed up $1.15 today at $370.72.5. And the last reported feeder cattle index was at $369.46. So October feeders were up $1.225, closing at $358.875. And lean hogs continue to slowly grind lower as the market just struggles with the same issues of burdens in supply, disappointing demand, and packer margins remaining in the red. New lows for the move were once again printed today, although futures managed to actually trim losses into the close. Still, these small daily declines continue to add up here over time. June lean hogs closed 65 cents lower at 97.275, while August finished down 27.5 cents at 101.82.5. August did recover nearly 90 cents from its session lows by the close, which may suggest some bargain buying surface late in the day, but overall the trend remains pointed lower until demand improves or supplies begin to tighten. So again, if you have any questions, as always, feel free to reach out. Otherwise, have a great night. We'll talk to you again tomorrow.