Latest / Professional Ag Marketing Podcast / Fading the Inflation Trade | Grain Market Talk May 29th, 2026

Transcript

Fading the Inflation Trade | Grain Market Talk May 29th, 2026 · Professional Ag Marketing Podcast

• 0:03
  SPEAKER_02: You're locked in to the Green Market Talk Podcast.
• 0:06
  SPEAKER_02: Fast updates, market movers, and the green news you need right now.
• 0:12
  SPEAKER_02: Trading commodity futures and options involve substantial risk of loss, but is not suitable for all investors.
• 0:21
  SPEAKER_00: All right.
• 0:22
  SPEAKER_00: Today is May 29th.
• 0:24
  SPEAKER_00: I've got Jordan with us here today to talk about the grain markets.
• 0:27
  SPEAKER_00: How's it going, Jordan?
• 0:28
  SPEAKER_00: Good.
• 0:28
  SPEAKER_00: How are you, Mike?
• 0:29
  SPEAKER_00: We're doing very good, unlike a lot of the markets today, Jordan.
• 0:32
  SPEAKER_00: So what we're going to talk about a little bit today is just what moved the markets this week, mainly Iran.
• 0:37
  SPEAKER_00: Then we're going to talk about just how uh inflation trade kind of happened this week or didn't.
• 0:42
  SPEAKER_00: And then kind of break down a little bit of seasonal stuff going on.
• 0:45
  SPEAKER_00: And then just three quick bullet points with weather, Iran, and China.
• 0:50
  SPEAKER_01: Yeah, let's uh let's get started because uh these markets uh were quite red this week, so lots to talk about here.
• 0:56
  SPEAKER_00: Definitely.
• 0:56
  SPEAKER_00: So a lot of the things uh leading into the end of the week revolved mainly around the US and Iran conflict going on there.
• 1:04
  SPEAKER_00: The US and Iran are nearing some type of deal to end the war and reopen the Strait of Hormuz that absolutely dominated almost all trade headlines through the end of the week and markets.
• 1:15
  SPEAKER_00: Uh really led to what I would call fading the inflation trade, Jordan, towards the end of the week.
• 1:21
  SPEAKER_00: And we saw just red across the board, didn't we?
• 1:24
  SPEAKER_01: Yeah, so I would agree totally.
• 1:26
  SPEAKER_01: You know, last week um we would have been trading over a hundred bucks there on crude oil, and now this week, you know, another dollar thirty lower again today at 87.55 has really seen um that energy market back off because, you know, of such easing that we've seen over there in the Middle East.
• 1:43
  SPEAKER_01: And, you know, that's kind of bled into that corn market, um, you know, really taking that premium back out of it, which is where we're at today.
• 1:50
  SPEAKER_00: The Iran conflict I thought this week was interesting because it was very conflicting reports all week.
• 1:55
  SPEAKER_00: Trump said one thing, Iran said another thing, and then an hour later you had the opposite headline come out and move the market back the other way.
• 2:04
  SPEAKER_00: So the market was back and forth a lot this week with headlines regarding the US and Iran situation.
• 2:10
  SPEAKER_00: And I felt like the market, even trading lower a little bit here now, is growing a little bit numb to the headlines towards the end of the week here, just to the extent that it can't truly buy into a headline anymore.
• 2:23
  SPEAKER_00: Like when this first came out, I mean, we were moving this crude oil market five to ten dollars.
• 2:28
  SPEAKER_00: Now it seems like it'll get the direction right, but it just can't buy into it continual section uh sessions long, I feel like.
• 2:35
  SPEAKER_00: And uh that's kind of stunted um a little bit of the upside more.
• 2:39
  SPEAKER_00: Now they're just fading it to the downside, and they're fading the inflation trade, I think, and across all of these markets.
• 2:46
  SPEAKER_01: Yeah, I would agree with that.
• 2:47
  SPEAKER_01: You know, yesterday there was, you know, a couple analysts kind of talking about how you know corn was a little bit higher while crude was lower.
• 2:54
  SPEAKER_01: So, you know, where they kind of decoupling each other, and then today, you know, down pretty hard, along with crude oil being a little bit lower.
• 3:01
  SPEAKER_01: So you kind of want to put them back together.
• 3:03
  SPEAKER_01: But overall, it seems like you know, the seasonal and the fundamentals are maybe starting to, you know, fade this corn market a little bit more, is what it kind of feels like.
• 3:12
  SPEAKER_01: And and probably more seasonals and fundamentals because demand is still phenomenally good on corn.
• 3:16
  SPEAKER_00: Absolutely.
• 3:17
  SPEAKER_00: So when I look at just uh a broad overview of what the markets did today specifically, I'm gonna have Cade pop up a uh uh kind of a live commodity view chart here.
• 3:28
  SPEAKER_00: And you can see corn was down nine today, and it was pretty red most of the day.
• 3:32
  SPEAKER_00: Uh, you saw that the July futures month there, that one really broke some pretty key support levels this week.
• 3:38
  SPEAKER_00: That chart looks pretty nasty, honestly, for old crop.
• 3:42
  SPEAKER_00: And uh, you've been seeing that in the spread action weakening a little bit too.
• 3:46
  SPEAKER_00: December corn closed right about that 100-day moving average, so we'll see if that holds.
• 3:50
  SPEAKER_00: Uh, that's gonna be a true tell this next week or not.
• 3:53
  SPEAKER_00: Uh, on the soybean market, that held together most of the day, and I feel like it was because soybean oil, a couple clicks down there, cade, that actually held really strong today.
• 4:02
  SPEAKER_00: We were up over a dollar most of the day on soybean oil, and that was with crude oil even being lower.
• 4:07
  SPEAKER_00: So the soybean oil held together, and I think that helped soybeans hold on most of the day before it kind of fell apart.
• 4:13
  SPEAKER_00: The wheat market down 12 of the last 13 days.
• 4:16
  SPEAKER_00: We've ripped off over a buck there in that uh Kansas City, for example, been a really red market in that uh wheat market.
• 4:23
  SPEAKER_00: And then the SP 500, kind of your sole one on the screen besides soybean oil, that was trading green today up 12.
• 4:30
  SPEAKER_00: Uh that's near record highs there again.
• 4:32
  SPEAKER_00: And then crude oil at the very bottom of the page with the US dollar being lower.
• 4:37
  SPEAKER_00: Now, every one of those would make sense, probably outside of soybean oil.
• 4:41
  SPEAKER_00: Um, you were really fading the inflation trade.
• 4:44
  SPEAKER_00: Crude oil led everything lower with grains, livestock, uh pretty much the SP went higher, the US dollar went lower.
• 4:52
  SPEAKER_00: Like if you had to say that the war was ending, this is how all of those things would have traded today.
• 4:57
  SPEAKER_00: Uh so I felt like the the markets across many different sectors were very in sync with each other towards the end of the week.
• 5:05
  SPEAKER_00: And that could have been the fact that we were at the end of the month, they're long pretty much all the things that they were read today.
• 5:11
  SPEAKER_00: So maybe a little bit of risk off, um, fading the inflation trade, not quite as much concern anymore.
• 5:16
  SPEAKER_00: Crude oil's backed off a lot as well.
• 5:19
  SPEAKER_00: We had a pretty hot PCE price get posted uh earlier this week that was probably built into the market already, and it didn't include a 20% pullback in crude oil now.
• 5:30
  SPEAKER_00: So uh a lot of those things it seems like, and in the grain market too, it had a lot of bullish things to feed off of for a while, and now it kind of just sits and waits as you gotta feed the bull every day, Jordan, and that's what these markets, it seems like, and grains especially are waiting on that next big thing.
• 5:47
  SPEAKER_01: Yeah, and that's exactly right.
• 5:48
  SPEAKER_01: You kind of got to feed this thing every day, and you know, you get to this time of year, and there just really isn't a lot to feed it, right?
• 5:54
  SPEAKER_01: You know, you get the mark or sorry, you get the crop planted in a timely fashion, you get it up out of the ground, and you know, it looks really good, right?
• 6:01
  SPEAKER_01: It just doesn't need a whole lot of moisture this time of year.
• 6:04
  SPEAKER_01: So you usually tend to kind of make a a high there in uh May, early May, and then fall off as you kind of close out May.
• 6:10
  SPEAKER_01: And that's exactly what's happened uh this year.
• 6:14
  SPEAKER_01: And you know, you kind of look at the seasonal and and you dip here around the end of May, and then you kind of move back higher um middle of June to the third week of June because you start talking about a little bit of heat and dryness.
• 6:26
  SPEAKER_01: So uh I think this market is you know following that to a T as far as seasonal.
• 6:30
  SPEAKER_01: And then you couple that with, you know, like you've been talking about this outside market type stuff, and and that's what you get uh when you get into nine lower today, right?
• 6:38
  SPEAKER_01: And yeah, you know, end of the month makes a lot of sense because you look at you know, all the commodities in general were red today with equities higher.
• 6:47
  SPEAKER_01: So, you know, was there there's some money moving out of the commodities and into the equities at month end?
• 6:54
  SPEAKER_00: There are probably uh if I would wrap up here, there's probably three main things driving this market going forward that we can see pretty clearly today.
• 7:01
  SPEAKER_00: Uh one is weather, two is gonna be the Iran conflict, and third would be if China decides to step in and buy anything at some point.
• 7:10
  SPEAKER_00: There was news, we'll start with China here.
• 7:12
  SPEAKER_00: There was news this week about them potentially tearing off the tariffs on our uh on our imports of soybeans and corn.
• 7:19
  SPEAKER_00: That would basically show that they're maybe interested at some point in buying some grains from us, even though economically they probably don't need to.
• 7:25
  SPEAKER_00: And I mean, lower sound numbers, all the reserves are somewhat decent still, they probably don't need to.
• 7:31
  SPEAKER_00: Um so that's a potential, just something to watch out for down the road.
• 7:35
  SPEAKER_00: I think if you get a bullish headline like any of those three flipping, they're gonna quickly react to it, probably, I would say.
• 7:42
  SPEAKER_00: If we start to worry about inflation again, I think they'll bite on something real quick and trade it.
• 7:47
  SPEAKER_00: Um, the other one was Iran.
• 7:49
  SPEAKER_00: That one's probably the upfront closest thing.
• 7:51
  SPEAKER_00: We're trading a lot of those headlines day-to-day right now.
• 7:54
  SPEAKER_00: Uh, hopefully that means we'll get an answer somewhat soon on that situation, even though long term there is infrastructure damage that could play out here.
• 8:02
  SPEAKER_00: And then uh don't forget about anything with we're in the summertime, we're supposed to be seeing really high uh energy demand.
• 8:09
  SPEAKER_00: You know, there could be some problems with consumer sentiment this time of the year as well, as we found out today.
• 8:14
  SPEAKER_00: And then the the third big thing I uh which would be a very normal seasonal pattern mover uh for these grain markets historically would be weather.
• 8:23
  SPEAKER_00: We were supposed to get some rain in the Western Corn Belt.
• 8:26
  SPEAKER_00: They kind of pulled a little bit of that out here for the next week now today, uh, but still a decent chance for Nebraska and South Dakota.
• 8:33
  SPEAKER_00: So we'll see if we get some of those or not.
• 8:35
  SPEAKER_00: But the majority of the corn belt, we're sitting in a very good spot.
• 8:38
  SPEAKER_00: Most of the weather that has played an uh impact in this market up till now was in winter week country, and and that's pretty much that story seems to be over with this combine start rolling down there on the on a cruddy crop.
• 8:51
  SPEAKER_00: So those are the three main talking points I think I'm gonna be at least focusing on or really keeping a uh a close eye on as we look at this uh grain market going forward into the summer.
• 9:02
  SPEAKER_00: Uh any other final thoughts from you, Jordan, here this week on the row crop markets?
• 9:06
  SPEAKER_01: Yeah, so I I think uh you're spot on with those three bullet points.
• 9:09
  SPEAKER_01: And you know, the one thing I would maybe add to that is, you know, we'll get a look at acres here and you know, do we see a little bit of shift on um, you know, a little less corn compared to soybeans?
• 9:19
  SPEAKER_01: That could be one thing that, you know, also kind of pops up here as we kind of move through the growing season.
• 9:24
  SPEAKER_01: And then, you know, the demand side continues to be extremely strong.
• 9:28
  SPEAKER_01: And, you know, if you get China to come in here and buy a little bit, that would be huge.
• 9:32
  SPEAKER_01: But you know, even looking at exports today, we could see a little bit of a bump on old crop exports um even without China.
• 9:39
  SPEAKER_01: So, you know, demand is very solid, is on very solid footing.
• 9:43
  SPEAKER_00: Demand is definitely solid.
• 9:44
  SPEAKER_00: All right.
• 9:44
  SPEAKER_00: Thank you for joining me today, Jordan.
• 9:46
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• 9:48
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• 9:50
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• 9:51
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• 9:52
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