6.5.26 Tredas Weekly Recap

Weekly Action:

Jul26 Corn down 28.75 at $4.18

Jul26 Beans down 65.25 at $11.215

Jul26 Chi Wheat down 30.5 at $5.8

Jul26 KC Wheat down 29 at $6.2075

Jul26 Cotton down 240 points at $0.7375/lb

June26 Hogs down $1.55 at $94.3

June26 Fats up $1.825 to $250.075

Aug26 Feeders up $5.475 to $353.9

Dec26 Corn down 28.25 at $4.4675

Nov26 Beans down 52.5 at $11.375

Sep26 Chi Wheat down 30.75 at $5.9275

Sep26 KC Wheat down 30 at $6.315

Dec26 Cotton down 211 points at $0.7748/lb

Grains:

It was a rough week in the ag space as we saw significant downward pressure in the grain markets as they catch up to the steep losses seen in soybean oil. This downturn is driven by a massive exodus of funds liquidating their previously large net long positions, particularly in corn. This week was the worst for the Corn market since February 2025 and the worst for nearby soybeans since September 2024. Although it is early in the growing season for a purely weather-driven sell-off, a combination of market pressures has severely deflated prices. These factors include favorable weather forecasts with expected rainfall across most of the Corn Belt, a distinct lack of new Chinese import demand, and the continuation of 10% supplemental tariffs alongside potential new Section 301 tariffs on China.

Domestically, regulatory uncertainty has added to the market's bearish tone following a lawsuit filed by the American Fuel and Petrochemical Manufacturers Association. This legal challenge targets the legality of the 2026 and 2027 Renewable Fuel Standard (RFS) mandates, citing that record-high compliance costs and tight credit values are causing severe financial strain.

Key Market Drivers on the Horizon

·         Chinese Soybean Demand: All eyes are on the daily export "flash sales" to see if rumored new-crop purchases by China translate into official, confirmed announcements.

·         The June WASDE Report: Ahead of next Thursday's release, the market is watching to see if traders will square short positions and if the USDA will bump up corn export targets to reflect strong current demand.

·         Weather Patterns: Early-season forecasts remain a dominant daily variable, directly impacting crop progress, moisture levels, and overall production potential.

·         June 30th Planted Acreage Report: This report typically coincides with volatility  as final acreage numbers frequently disrupt prevailing trade expectations.

You'll often hear traders talk about "the funds" or "managed money." That's basically large investment firms, hedge funds, and commodity funds that trade grain futures as an investment rather than producing or using grain themselves. Because they control a lot of money, their buying and selling can have a big impact on short-term price moves. When funds are heavily buying, markets can rally quickly, and when they're selling, prices can come under pressure even if the underlying grain fundamentals haven't changed much.

Livestock:

Cattle futures rallied end of week despite the confirmation of New World screwworm in the US.  the majority of feeder cattle contracts reached their newly increased daily trading limit of $10.75/cwt on Thursday. Since the case was confirmed Wednesday evening, no additional detections have been reported. This is the first in Texas since 1966. However, there is a significant risk that screwworm flies could spread through wildlife populations, potentially leading to additional livestock cases.

Weather:

According to the Friday midday GFS data, early next week will bring heavy, soaking rainfall across the eastern Midwest, Tennessee, and Kentucky, aligning with earlier morning forecasts. Total accumulations are projected to reach 1–3 inches, which threatens to disrupt winter wheat harvesting during the first half of June. While these storms should alleviate the unusual dryness affecting Iowa, Illinois, and Kentucky, the midday Canadian model offers a slightly different take—showing a similar pattern but with lower confidence that the heaviest precipitation will stretch into Indiana and Ohio.

Economy:

The U.S. economy continued to show surprising resilience this week, highlighted by a stronger-than-expected jobs report. Employers added more jobs than forecast in May, reinforcing the idea that economic activity remains healthy despite elevated interest rates and ongoing inflation concerns. Strong hiring has reduced expectations for near-term interest rate cuts, as the Federal Reserve remains focused on bringing inflation closer to its long term target.

While the labor market remains a bright spot, consumers are still feeling pressure from higher living costs and energy prices. Housing activity has also stayed relatively subdued as mortgage rates remain elevated. Overall, the economy continues to grow at a steady pace, but markets are increasingly focused on whether strong economic data could keep interest rates higher for longer. Upcoming inflation reports and Federal Reserve commentary will remain key areas of focus in the weeks ahead.

Something That Probably Means Nothing:

The full name of the New York Knicks is the "Knickerbockers"—a nod to the baggy, knee-length pants worn by early Dutch settlers of New York—and was reportedly chosen by club founder Ned Irish simply by pulling the name out of a hat.

Quote of the Week:

“The farmer has to be an optimist or he wouldn’t still be a farmer.” – Will Rogers