Daily Market Cast: 5/26

Daily Commentary: Tuesday, May 26, 2026

Transcript

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Hey everyone, this is Allison giving you today's Ely Green Market commentary for Tuesday, May 26th. And crude dropped hard on Iran news here to start the week, but the bears were not necessarily rewarded with a complete knockout. Corn, soybeans, wheat were lower in today's session, but not horrendously lower. And that matters. If crude was supposed to break the grain complex, it didn't happen today. And even more important, US oil prices have reversed off their lows, actually pushing back toward that $95 a barrel mark. So, end of story, energy isn't on the conversation yet. Fund activity was not bearish enough to really change the big picture either going into the week. Yes, there was some trimming around the edges, but there was no mass exit. So funds clearly still want to defend the long side of the market. Why? Weather risk, geopolitical risk, inflation risk, pick your poison. So that doesn't mean that they're blindly bullish, it just means that they're not ready to abandon length when crude is still volatile. Iran headlines are still moving energy, wheat still carries production risk, and summer weather has is just getting started. So, and that's the main story right now. We don't have a confirmed weather market really outside of wheat. And wheat story has already been largely factored in. Yes, hotter, drier forecasts are starting to show up across parts of the Midwest here, especially over the next couple of weeks, and that keeps weather on the radar, but the market has not been forced into panic mode yet. So the big what if remains. Will seasonal trends hold and pressure prices lower here into the end of June? And if you remember in 2012, that was the drought year, the co that corn actually did still lose roughly a dollar between the May high and the June low before exploding higher. And that's the part weather bulls tend to forget. If this turns into a real weather market, there will be opportunity. But if history rhymes even a little bit, we may still have another five weeks of frustrating what if trade to get through before we see a breakout one way or the other. July corn did test major support near 456 today. December corn is actually sitting near the bottom of its range, um, near that 480 area. Technically, the bears have the short-term edge. Corn has posted several sessions of lower highs and lower lows. And if support fails here, long liquidation could pressure futures lower very quickly. But demand is still the problem for the bears case. Today's export inspections back that up, coming in toward the upper end of expectations. So corn is caught between two stories: strong demand and good early crop conditions. And the chart gives the bears the edge right now, but demand keeps it hard for them to land the knockout punch. So July corn day closed five and three quarter cents lower today at 457.5. December settled four and a half cents lower at 482. And soybeans were the weak link today, but not necessarily because of crude. Soybean oil actually gained ground as crude turned off its lows. So the bigger issue was meal. Soybeans uh followed meal lower, and some of that may have been some spreading action between the products, but there's also a demand concern that we're seeing show up. Indian traders reported can't reportedly cancel 25,000 metric tons of soy meal export contracts for the first time since 2021. And they also booked 80,000 metric tons of soybean meal imports from African countries after soaring domestic prices reverse normal trade flows. And that matters because meal has been the leader of the soybean complex. So if meal starts to lose momentum, soybeans lose one of their strongest support pillars. So today's soybean weakness was not just about crude oil, it was about the product side flashing a little bit of a warning sign here as far as demand goes. We might be just a little bit too high for the global market. July soybeans ended 10.5 cents lower today at 1186. November closed at 1180 and a quarter, down seven and a half cents. And wheat finished mixed city with Minneapolis, the only market able to find some strength. The problem for wheat is simple. It's really struggling to find a fresh bullish catalyst. Falling crude, easing geopolitical attentions have taken some of that premium out of the market. And at the same time, improving Black Sea export competition and seasonal hard red winter wheat harvest pressure do continue to weigh on prices. We are hearing that Ukraine exports are expected to rise sharply this year, which just adds another bearish factor here, at least in the near term. But wheat is not falling apart either. Demand remains quietly supportive underneath the surface. U.S. wheat inspections are still running roughly 10% ahead of last year's pace, with less than two weeks left of the 25-26 marketing year. So that's helping prevent a bigger breakdown, even with fund liquidation and mostly favorable U.S. growing conditions. Longer term, wheat still carries food security premium. Shrinking acreage, high input costs, declining production potential across key exporters are not necessarily bullish headlines every day, but they are still sitting underneath the market. So today at July Chicago weed ended the day at 635.5 down 10.3 quarter cents. July KC settled five and three quarter cents lower at 676 and a quarter. And July of Minneapolis finished at 691 and three quarters up two and a quarter cents. And the cattle complex opened under pressure following Friday's bearish results from the latest USDA Cattle on Feed Report, but early selling quickly faded. Buyers stepped back into the market. And even with the rebound off the lows, the market really struggled to maintain the strong gains posted earlier in the session. So after the sharp weakness late last week, overall market sentiment has clearly turned a bit more defensive. And for now, the bears appear to have short-term control of the trade. So with the first major grilling holiday of the summer now behind us, seasonal beef demand could soften temporarily until retailers begin stepping up purchases ahead of Independence Day holiday. So beef cutout values were sharply higher at midday, which could provide some relief to packer margins and help stabilize the cash cattle prices. One positive development for the Bulls was the ability to push deferred live cattle and feeder cattle contracts into some positive territory by the close, signaling some of the underlying long-term optimism despite some nearby weakness. So June live cattle did close down $1.075 at $2.48.22.5, while December live cattle gained 45 cents, settling at $2.30.55. In feeder cattle, August feeders slipped 40 cents to close at $3.49.45, while October feeders ended 27.5 cents higher at uh $343.90. Lean hog features continued to look overpriced relative to current cash market levels. Uh poor cutoff values were stronger at midday, which isn't an encouraging sign for improving cash prices, but sustained strength will be needed before packers become more aggressive bidders in the cunt in the country. So the normal seasonal rally in hogs has yet to fully develop, leaving the July-August contracts pretty vulnerable to additional downside pressure if cash fundamentals fail to improve. So June, lean hog features closed 37.5 cents higher at 96.12.5, while August hogs fell $1.025 to close at 99.05. So again, if you have any questions, feel free to reach out. Otherwise, we hope you are staying cool, enjoying some nice weather, and we'll talk to you again tomorrow.