Daily Market Cast: 5/22

Daily Commentary: Friday, May 22 2026

Transcript

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Hey everyone, this is Allison giving you today's Daily Gray Market commentary for Friday, May 22nd. And today's action felt more like choppy pre-holiday positioning than a clean shift back to bullish momentum. Higher energy prices, daily export sales of corn and soybean meal, and a little relief buying after yesterday's lower close all help support prices into the end of the week. And after three straight days of fun selling, it also looked like some position squaring ahead of the three-day Memorial Day weekend. But the big story has not changed. Grain markets are still trying to decide how much geopolitical risk belongs in price. Energy matters. It supports ethanol margins, soybean oil, freight costs, inflation psychology, and broader commodity fund interest. But until the market sees either real escalation or believable de-escalation, this is still a two-sided volatility market, not a clean trend. And weather is in that same awkward middle ground as well. It is supportive enough to keep sellers from getting too aggressive, but not threatening enough yet to justify a full weather premium. It's still early in the US growing season, so the trade can tolerate on even forecast for now. And that patience will disappear quickly if heat expands or rainfall disappoints here going into June. And just as a schedule reminder, markets and government offices are closed Monday, May 25th for Memorial Day. Grey Markets will now reopen not until 7 p.m. on Monday for the overnight session with normal trading resuming on Tuesday. So enjoy the Memorial Day weekend, but also take a moment to remember why we have it, to honor the men and women who gave their lives in service to this country. Markets will reopen. Family gratitude and perspective matter too. So for corn, corn was supported by another round of USD flash sales. We got Mexico and unknown buyers taking nearly 604,000 metric tons. The important part is not just the sale itself, it is that new crop commitments are finally starting to pile up. And after a week where December corn tested $5 and then back off, demand needs to keep showing up if the bulls are going to defend this rally. And seeing it show up on breaks is great. And the fertilizer story also matters. The EU is temporarily lifting customs duties on key nitrogen fertilizers like urea and ammonia for one year because of the Iran war. And that's just a reminder that this is not just a grain market. Energy, fertilizer, freight, geopolitics, weather are all tied together right now. So July corn did close a penny higher at 463 and a half, losing 7.5 cents for the week. December selled one and a half cents lower at 486.5, down five and a half cents for the week. And soybeans were supported by the product side again today after the USD announced a flash sale of 252,000 metric tons of soybean meal to an onknown buyer. Crush margins rebounded 10 cents at 350 and a half per bushel, keeping the domestic demand story front and center. And with crush margins still near record highs, biofuel demand expanding, and potential for Chinese demand to return closer to pre-tariff levels, the floor under soybeans has moved higher. And the biofuel story is not just a US situation. Australia is reportedly looking at biofuel mandates as part of a plan to improve energy security, reduce transportation emissions, and support its egg sector. And that matters because global policy continues to build a longer-term demand story around vegetable oils and oil seed products. So that doesn't mean that the market is has a free pass higher here. Favorable US weather is still limiting some upside now. And China still needs to prove demand with actual purchases, not just headlines. So near term, July soybeans likely remain trapped in a broad 1175 to 1225 range. July soybeans managed to close two and a quarter cents higher today at 1196 and a half down five and three quarter cents for the week. November closed a penny higher at 1187 and three-quarters down a penny for the week. And wheat is still struggling to regain some upside momentum here. Better rain chances across parts of the plains have really taken some of the urgency out of the weather story, even though the hardwood winnery drought stress is far from fixed. And at this point, it's likely not going to get fixed. And that is the important distinction. The crop is stressed, but the market is no longer willing to chase every weather scare here without follow-through. So Kansas City wheat still has weather premium underneath it, but traders are more cautious about Chicago and Casey failing to hold rallies here near the recent highs. So technically, the charts have turned more defensive short term. Support now sits in July, Chicago near 624, Casey at 661, and Minneapolis near 680. Those are the key levels to watch. Globally, wheat has uh has a supply. Sorry, Russia continues dealing with some fungal disease concerns, and the International Grains Council trimmed their world wheat production estimate this week. But Argentina lowering export taxes does add some competition and could make U.S. export demand harder to earn, especially at these prices. July Minneapolis wheat closed less than a penny lower at 689.5 down two cents for the week, and September ended the day less than a penny lower as well at 710.25 down four and a half cents for the week. And the cattle complex started today exactly where it left off yesterday, and it wasn't positive. Early trade felt like the funds were fighting to get out of the door and long positions as liquidation pressure just dominated the market. And there didn't appear to be any major fundamental reason behind the sharp sell-off outside of aggressive fund movement and maybe some money rotation. There are still no rumors suggesting the broader, the border, the broader, the border will reopen. And it was difficult to believe traders were positioning heavily ahead of today's cattle on fee report. Feeder cattle absorbed the brunt of the selling pressure, trading more than $12 lower at one point during the session. Live cattle were down roughly $2.50 to $3 at their worst. So once the bulk of the liquidation passed through the market, the selling pressure eased and futures actually recovered off the lows. Feeders still closed sharply lower, but managed to at least regain nearly half of the session's losses at by the close. August feeder cattle finished down $6.675 at $349.85, while October feeders lost $6 to close at $343.62.5. June live cattle actually recovered to close $15 higher at $2.49.30, while October live cattle slipped 22.5 cents, selling at $2.30.72.5. And speaking of the cattle on feed report, pre-report estimates on feed numbers averaged $101.4 of a year ago with a range of about 100-102.5% versus 98% last year. Placement estimates averaged 103 with wide range compared to 97.5% a year ago. Marketings were estimated at 90.5 with expectations ranging from about 89 to 91 versus 97.5% last year. The actual report did show on-feed numbers at 99% below the entire range of estimates, which is considered friendly for the market. Placements and marketings both came in within expectations, although placements landed toward the upper end of the range while marketings were near the lower end. So overall, the report could be viewed as neutral to slightly negative because of the sluggish marketing number. However, considering the sharp break in futures here over the past several sessions, the downside impact from the report may already be largely factored into price. The cold storage report showed meat supplies in free users were at 4% from the previous month, but still 4% below Eurogo levels. So overall, that was viewed as a fairly supportive report. Lean hogs finished mixed on the day with June and July contracts posting small gains while deferred contracts closed modestly lower. Traders may be anticipating that cash market can rally another $5 or move closer to current June futures values. Lean hog index was quoted at $91 yesterday, while June Leanhogs gained 62.5 cents, closing at 95.75. October Hog slipped 27.5 cents, finishing at 87.125. So again, if you have any questions, of course, feel free to reach out. Otherwise, have a great night and a great Memorial Day weekend. We'll talk to you again next week.