Latest / Professional Ag Marketing Podcast / Weather Sell Off | Grain Market Talk June 5th, 2026

Transcript

Weather Sell Off | Grain Market Talk June 5th, 2026 · Professional Ag Marketing Podcast

• 0:02
  SPEAKER_00: You're locked in to the Grain Market Talk Podcast.
• 0:06
  SPEAKER_00: Fast updates, market movers, and the grain news you need right now.
• 0:11
  SPEAKER_00: Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors.
• 0:21
  SPEAKER_02: All right.
• 0:22
  SPEAKER_02: Today is June 5th.
• 0:23
  SPEAKER_02: I've got Jaden here with us today.
• 0:25
  SPEAKER_02: How's it going, Jaden?
• 0:26
  SPEAKER_02: It's going good, Mike.
• 0:27
  SPEAKER_02: All by yourself.
• 0:28
  SPEAKER_02: Awesome.
• 0:29
  SPEAKER_02: We're going to talk about the grain markets.
• 0:31
  SPEAKER_02: Now, I'm going to have Cade right away.
• 0:33
  SPEAKER_02: We're just going to pull up a December chart of corn because that thing is nasty, Jaden.
• 0:38
  SPEAKER_02: We've pulled off quite a bit in this December corn since putting in our highs around that 505-506 type area here not so long ago in May.
• 0:47
  SPEAKER_02: And now we have found ourselves right down about 446, 445 most of the day here.
• 0:53
  SPEAKER_02: We've piled on really a lot this week, I would argue, is folks really started to trade the weather, it looked like.
• 1:57
  SPEAKER_02: Corn kind of said, screw it, I'm going to trade my own stuff, and that's lower.
• 2:00
  SPEAKER_02: So what can you tell me about what you see in December corn right now or the corn market futures in general from technical price action, Jaden?
• 2:09
  SPEAKER_01: Yeah, just looking at that chart, um, just the long-term support, I would say is right where we kind of closed that today.
• 2:15
  SPEAKER_01: Around that 445 area.
• 2:17
  SPEAKER_01: I really want that to hold here going forward.
• 2:20
  SPEAKER_01: But like you said, did some a lot of technical damage this week.
• 2:23
  SPEAKER_01: Actually, lost around 30 cents on the December corn contract this week.
• 2:27
  SPEAKER_01: And a lot of guys' crop insurance kicks in around that 440 level.
• 2:31
  SPEAKER_01: So hopefully this level holds here going forward.
• 2:34
  SPEAKER_01: But right now, I think what we saw this week was just funds hitting the sell button.
• 2:39
  SPEAKER_01: You know, they're sick of that I talking about that Iran news.
• 2:41
  SPEAKER_01: They need fresh bullish news.
• 2:43
  SPEAKER_01: And right now, with good weather and no China buying right now, it's gonna be hard for them to buy.
• 2:48
  SPEAKER_02: You got to feed a bull every day, and that's basically what we saw here on this pullback.
• 2:53
  SPEAKER_02: One of the things I want to talk about here is you mentioned at crop insurance around this 439 level kicking in on ECO, particularly.
• 3:01
  SPEAKER_02: Uh, now this this would be an interesting spot because there's a ton of chart support right around 440 on this contract, going all the way back, multiple levels, all the way back into like 2024.
• 3:13
  SPEAKER_02: That this is pretty much benchmark base price on that chart.
• 3:19
  SPEAKER_02: That's one way of looking at it.
• 3:20
  SPEAKER_02: You've got crop insurance kicking in and you have pretty strong support levels here historically on this contract right here.
• 3:28
  SPEAKER_02: So keep that in mind in the first scenario.
• 3:30
  SPEAKER_02: The second is seasonally.
• 3:32
  SPEAKER_02: If you overlay this chart with a seasonal on five, ten, twenty, thirty-year seasonals, it looks very close, especially to the last two years, trade-wise, even level-wise, time-wise, it's very similar.
• 3:45
  SPEAKER_02: This we spike up and we start to sell off kind of this time of the year, and it really doesn't stop going down in these prior years until about the middle of August.
• 3:55
  SPEAKER_02: So, from a seasonal perspective, if you're gonna tell me we had our high in the middle of May, now we sell off into the middle of August, that is like picture perfect grain market 101.
• 4:06
  SPEAKER_02: What happens?
• 4:07
  SPEAKER_02: So that's the seasonal aspect of it is we put our high in May, we're gonna, you know, trade this thing a little bit lower into August seasonally.
• 4:15
  SPEAKER_02: Then there's obviously the last thing to keep in mind, which I want guys to really remember is why we put the positions on in the first place.
• 4:23
  SPEAKER_02: We got well above 20, 30 cents above where crop insurance price is averaged, which is normally a good target spot to have.
• 4:31
  SPEAKER_02: So crop insurance price is 462, add 30 cents to that, 490s.
• 4:37
  SPEAKER_02: That that's usually a good rule of thumb uh to kind of target.
• 4:41
  SPEAKER_02: It was pretty profitable levels if we get uh normal yields for a lot of folks right around that type of uh futures level as well with normal yields.
• 4:49
  SPEAKER_02: So we liked that.
• 4:50
  SPEAKER_02: We liked the time of the year that we made the sale, and then just remember what time of the year you're in, the middle of summer.
• 4:56
  SPEAKER_02: We're start of it.
• 4:57
  SPEAKER_02: So I just mention all that because we put the put the hedge on as a hedge.
• 5:02
  SPEAKER_02: So uh, you know, continue to keep that in mind as we find opportunities to lock in basis coming up here.
• 5:08
  SPEAKER_02: Old crop, we're seeing quite a bit of basis strength with this pullback that we've had.
• 5:12
  SPEAKER_02: If this continues, maybe we'll see some strength on new crop in late summer on basis levels.
• 5:18
  SPEAKER_02: If we don't see much of a futures bounce here the rest of the summer, there should be some pretty good basis opportunities uh later on in the summer for us to take advantage of before we truly realize how big of a crop we could have here potentially.
• 5:33
  SPEAKER_02: So those are a few things I've been talking about.
• 5:36
  SPEAKER_02: Weather is the core of maybe why we've made this sell-off, Jade.
• 5:40
  SPEAKER_02: And what can you tell me about what weather we're seeing and what one we're supposed to have the next coming weeks?
• 5:46
  SPEAKER_01: Yeah, over the past week, if you kind of look there, as Cade pulls that up there, we received about a hundred percent of our normal rainfall for the last week there.
• 5:56
  SPEAKER_01: And a lot of those dry pockets that we did have there, Nebraska, South Dakota, those were the states that got most of the rain.
• 6:05
  SPEAKER_01: So um that that kind of put, you know, as that western dryness was creeping into the corn belt, that kind of helped that.
• 6:11
  SPEAKER_01: But looking forward here, over the next week, looks like basically the whole corn belt's gonna be covered with rain.
• 6:17
  SPEAKER_01: And as we get into June and the crops really coming up, um that that's pretty bearish on prices here.
• 6:22
  SPEAKER_02: Well, rain mains grain, and that that precipitation anomaly map that you had there, that kind of sums up what I've learned at World Pork Expo.
• 6:30
  SPEAKER_02: It was dry to the east, and that helped them finish up their planning time frame too.
• 6:34
  SPEAKER_02: So kind of a picture-perfect map there to tell you uh wrapped up some planning that was maybe a little delayed in the east and north, and then uh really the dry spots in the U.S.
• 6:44
  SPEAKER_02: got the rain that it needed to.
• 6:46
  SPEAKER_02: So pretty big move week over week on this corn market to some very strong support levels there.
• 6:53
  SPEAKER_02: We'll see if they hold from a seasonal aspect.
• 6:56
  SPEAKER_02: We normally still chop around, have some have some uh seasonals kind of push us into August.
• 7:01
  SPEAKER_02: But there's three main things I think that really push this market.
• 7:05
  SPEAKER_02: One, weather, obviously.
• 7:06
  SPEAKER_02: Two, the Iran situation yet just isn't over with.
• 7:10
  SPEAKER_02: Uh we need some more concrete evidence of saying this is the direction we're going between Trump and Iran and negotiations, etc.
• 7:18
  SPEAKER_02: And then the third would be China.
• 7:20
  SPEAKER_02: This week with the pullback too, it sounds like we've heard China poking around.
• 7:26
  SPEAKER_02: They've been buying Milo, and now they're asking about some corn prices out and about for export.
• 7:32
  SPEAKER_02: So something to keep in mind there if they do step in and buy some corn from the United States, that would be quite friendly.
• 7:38
  SPEAKER_02: One of those three items, I am expecting for one of those three items to give us a pop at some point.
• 7:43
  SPEAKER_02: I'm just gonna be curious what are we gonna take off by the time we would get that pop?
• 7:47
  SPEAKER_02: But nonetheless, continue to keep in mind what these levels mean if we do get a rally this time of the year.
• 7:54
  SPEAKER_02: What do you do normally?
• 7:55
  SPEAKER_02: What should you do normally?
• 7:57
  SPEAKER_02: And uh keep an eye on this market because we are getting a little bit more volatile again on the on these grains.
• 8:03
  SPEAKER_02: Haven't seen these prices for quite some time.
• 8:05
  SPEAKER_02: So uh a little bit of a exciting trade in the grain markets lately, uh something we haven't seen.
• 8:11
  SPEAKER_02: Any other final thoughts from your end?
• 8:13
  SPEAKER_01: Yeah, I think we should look at that stocks to use chart.
• 8:16
  SPEAKER_01: So with today's or this week's, you know, recent sell-off here, I think it's important to know where does this you know sell-off make sense compared to fundamentals?
• 8:24
  SPEAKER_01: So if you look at the 26-27 balance sheet for corn for the USDA, they're thinking around a 12% stocks to use ratio.
• 8:33
  SPEAKER_01: And where that puts us today is around 461 March futures, and that puts us like right on the trend line over the past year.
• 8:40
  SPEAKER_01: So you could say the market probably has right now a price in a trend line yield of 183.
• 8:45
  SPEAKER_02: All right.
• 8:46
  SPEAKER_02: That's a very good.
• 8:47
  SPEAKER_02: Whenever anybody asks me what should corn price be based on fundamentals, this is a chart I immediately go to.
• 8:53
  SPEAKER_02: So this is always great to keep an eye on.
• 8:56
  SPEAKER_02: Uh, basically, this four to four and a half dollar range is basically right where we should be for this time of the year.
• 9:02
  SPEAKER_02: Uh great to keep in mind as well.
• 9:04
  SPEAKER_02: A few things looking forward to.
• 9:06
  SPEAKER_02: WASDIA port next Thursday, uh, based on uh the decent planning progress we had.
• 9:13
  SPEAKER_02: It'll be interesting to see if the USDA adjusts anything in the yield or or alike because of the faster planning progress that we had for the majority of the United States, anyways, throughout the spring.
• 9:24
  SPEAKER_02: Uh so look forward to that.
• 9:26
  SPEAKER_02: Also, just this time of the year, uh, you start to talk about a six to ten day forecast that starts to matter more and more now as we approach kind of the middle of the July timeframe.
• 9:35
  SPEAKER_02: All right.
• 9:36
  SPEAKER_02: Well, thank you everyone for tuning in today.
• 9:38
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• 9:56
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• 9:57
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• 10:01
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• 10:07
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