Weekly Bushel Cast: 5/29

Managed Bushels Weekly Update: Friday, May 29, 2026

Transcript

SPEAKER_00 0:00

Hey everyone, this is Allison giving you this week's Manage Bushels update on Friday, May 29th. And it really was a disappointing close here for the week. We really had a sharp sell-off the entire week for it being a short week and month end. Some of it can be blamed on positioning. Um we don't really have one headline we can blame this week. It's probably the lack thereof not being a headline to blame things on that probably gave way to some downside pressure here to finish the week. So big technical action here in front of us. Um, and I'm gonna get into it. So we're gonna start with corn. July futures finished the week at 446 and three-quarters. July did hit a seven-week low today. Um, it did manage to claw up a little bit off the low, but I can't sugarcoat it. The market still finished lower. So back on March 9th, July corn topped out at 487 and a half before collapsing 43 cents to 448 following that April USD report. Then crude oil rallied, war premium returned, and corn was given a second chance. And eventually we saw a rally back to 487.5 on May 5th. Now, today's low, 445. So we blew through it. Now we did recommend selling old crop corn both times we traded near 487. At the same time, we did look at reowning those bushels with call options because none of us knew whether a drought was coming. And if 26 turns into another 2012, those calls can provide meaningful upside participation. The problem is that the market hasn't been trading weather or demand. It's been trading crude. Down 40 cents, up 40 cents, down 40 cents again. Nearly every major move in corn since March has coincided with shifts in energy markets and changing perceptions around the Iran conflict. So at this point, corn feels like a grain market that more, that's more like a passenger riding in the back seat of crude oil. So for us, this is honestly one of the most headline-driven schizophrenic environments we can remember. And for 88 straight days plus now, traders have been reacting to daily, hourly, and sometimes minute by minute developments surrounding the Middle East. So weather risk is still ahead of us, but the market's no longer willing to pay for it today. So if hot, dry conditions do emerge in June or July, those calls can come back to life in a hurry. If they don't, the market will continue focusing on that large acreage, improving crop conditions, and of course the absence of a weather story. So if you want to get some calls in place, they are relatively cheap with the pullback. We were looking at July 450s. Today they were about 10 cents, expired June 26th. Now, December futures finished the week at 475. Um, December corn did hit a five-week low today and is now challenging the 50% retracement of the entire year's move near 476, and that matters. Our average cash sale on 30% of 26 bushels is 481. So, in other words, we're now trading back near the area where we told producers to get something protected. So, could December corn break back towards 445? Yes. Um, that would be another 30 plus cents lower from here. And if that kind of move doesn't worry you or faze you, then puts may not be necessarily. But if watching your on-price bushels drop another 35 to 45 cents would upset you, then now's the time to be looking at protecting um what you can based on what you have left exposed. So that's not about being bearish forever. It's just about respecting the risk in front of us. Weather can still change the story, crude can still change the story, but hope is not a strategy. And neither is waiting until the market is already 40 cents lower to decide you wish it would have done something. So you could do a 470 July short dated put for about six cents. Um, that expires the 26th of June. If you want a bit more time, a 470 August short dated put is about 14 cents, expires the 24th of July. Now on to soybeans. July soybeans finish the week at 1186 and three quarters. And we did see the that contract test and hold 1179 and three quarters this week. And actually bouncing off that level, representing the 38.2% retracement of the rally from the January low near 1064 to the recent high of 1250. So for now, the bulls defended an important technical support area. The question is whether they can build on it. So if 1179 three quarters continues to hold, the market can argue this is simply a correction within a larger uptrend. If that support gives way, though, the next downside target becomes a 50% retracement near $11.58. So the first test of support is where traders buy. The second test is where the market decides if they were right. Then that's exactly where July soybeans are sitting right now. So if you need to make some sales, make some sales. Um on November, um, the November contract closed the week at $11.90. Now, November beans remain the market. That's really the hardest to fully explain. And we still have no confirmation of lower Chinese tariffs on US beans. We still have no confirmation of any meaningful new crop soybean business with China, despite the promise of 25 million microtons, roughly 925 million bushels, or essentially the return to normal. Yet we see new crop beans remain at a bid near 30 month highs. Um, and that is still hard to understand. And we're now only a dime away from that $12 level for November beans. So if you have nothing sold or not yet 30% sold, make sure you get there. On the rest, look at puts. Why? Because if this rally suffers a 50% haircut, November beans could be looking back toward that $11. And in that scenario, an $1,1160 floor looks pretty good. So this is not about killing the upside, it's just about defending the downside while the market is still giving us the chance to do it. So again, look at uh August shortdated $11.60 put, they're currently 16 cents. They would expire the 24th of July. Now on to spring wheat. Um, July, Minneapolis uh posted a steep 70 plus cent decline here since May 13th. So technically the contract cut through support here to finish this word, and that's one word ugly. Uh, the next large area of support sits near the 100-day moving average, near 642. And beyond that, support lies near the April lows of 625. So, can it happen again? Yes, it can. We know the contract's oversold, outside markets still matter, macro headlines, crude oil, the US dollar, broader risk sentiment do continue to play a major role here in wheat, just like they do across the grain complex. But the core wheat fundamentals have not changed. The point of power has not shifted. Spring wheat still carries weather risk, acreage risk, and production uncertainty. And the market has simply removed premium here in a hurry. And that is why support levels matter. So if support holds, we can recover quickly. If it fails, the chart opens the door to another leg lower. Now, the September contract technically honestly looks very similar to the old clock contract, for better, for worse. Um, the market has pulled back sharply from recent highs and is now testing an area where support needs to emerge. So if buyers step in here, the move can be viewed as a healthy correction within a larger uptrend. If they don't, the conversation changes. And at this point, neither outcome has been proven. So the bulls can argue, again, the market's simply correcting after an impressive rally and working off an overbought condition. The bears can argue momentum has shifted and the deeper correction is underway. The reality is that support needs to be found here. Um, until the market either confirms support or breaks through it, we are kind of stuck in the middle ground between a normal pullback and something more significant. So the next few weeks will likely determine which story is going to win. Now on to canola. Canola actually still has a weather card at play here. Reports continue pointing toward late planting concerns in parts of Western Canada, especially after seeding deadlines were extended for portions of Alberta's northeast, northwest, and peace regions. So that tells us conditions are not perfect. But the market also knows the crop usually gets planted eventually. So that's the tension in canola right now. So until the year's crop is clearly off to a good start, the market can still justify some risk premium. The bigger point for producers is this canola futures are trading at fresh highs not seen since 2022, and that matters. If you have not priced any canola yet, this is not a market to ignore. Weather can still add more premium, inflation can be supportive longer term, but fresh multi-year highs are exactly where risk management should happen. So price some, protect some, do not prices are often lower in July than they are in May. And that does not guarantee that same result this year, but it should be enough to take notice. So for now, canola has support, but it also has seasonal risk. So if the crop gets planted and starts well, the market may not wait around to see what happens next. So again, as we turn the calendar here into June, just remember that weather markets are built on uncertainty. If the problem today is that the market just sees less uncertainty than it did two weeks ago. So if that changes, opportunities will return. But until then, respect the downside, defend profitable prices, and don't let the weather story that hasn't happened yet keep you from making some decisions. So if you have any questions, as always, feel free to reach out. Otherwise, have a great weekend. We'll talk to you again next week.