Katie Geerdes

This short holiday week started off like most weeks have over the last three months, with markets taking direction from crude oil. Grain futures gapped lower on Monday night after crude oil was already down sharply in response to news of a peace deal with Iran. Futures settled off their lows on Tuesday, but crude oil kept falling after that to exert pressure on the broader commodity space. The exception was soybean oil, which decoupled from crude and went on a three-day run to new highs. Soybean oil was standing out for having earlier benefitted from strength in crude oil and for now having the potential to rally further because crude oil is weakening. Lower crude oil futures, assuming they weigh on diesel fuel prices, would pinch biofuel production margins and drive up the costs of compliance with the elevated renewable volume obligations recently announced. As primary feedstock for biomass-based diesel fuel, soybean oil futures were rising in step with the D4 RIN credits that cover advanced biofuels. Soybean oil and D4 RINs rising together reflected increasing attention on shrinking RIN carryover banks and the question of whether enough gallons of biofuels can be physically produced to avoid future compliance…

Dr Elwynn Taylor, now retired, predicted a major US drought akin to 1936 based upon an 89-year drought cycle and tree ring studies targeting 2025 in his seminars for a number of years prior to that date. Both NW IA and the US produced record yields in 2025 so Taylor was obviously wrong…right? I had pointed out that just a small deviation in an 89-year cycle would provide a window of a few years. I had asked Taylor where he expected the drought to be centered and he said Oklahoma like the last cycle. If you talked to wheat farmers in Oklahoma and Kansas right now, after they just lost their winter wheat crop, they would give a different interpretation of the severity of their being drought than farmers in Iowa would. The US as whole is in a drought as extensive and severe as in the 1930s. Wildfires are surging and the dust blowing is being tracked by satellite. Were we still using the tillage practices such as moldboard plowing like decades ago, another dust bowl would be assured under current conditions. A farmer told me last week that he did not roll his soybeans as he feared creating…

Morning Market Talk Below, you will find today's installment of Morning Market Talk. You can copy and paste the link below for this morning's episode.   https://youtu.be/_clSNdHX43s?si=VGmNl7C6BYGROWyk   On the Grains   Soybeans led a round of buying in the grain and soy markets overnight. Soybeans have outperformed corn and wheat recently as traders wait to see if China emerges as a buyer of U.S. cargoes following the recent trade deal. While there's no news on that front, optimism of Chinese purchases is supporting soybean futures. The overnight strength in corn and SRW wheat is nothing more than modest corrective buying tied to the strength in soybeans. Wheat in particular faces an uphill battle as harvest activity will pick up.   Crude oil futures bounced overnight after the U.S. struck Iranian military targets for the second time this week. U.S. officials say the strikes have been defensive in nature and the ceasefire remains intact, but traders have stopped removing war premium for now.   Markets are headline driven and money flow remains the most important factor in daily trading moves, fueled by the geopolitical and trade fronts.     On the Cattle:   Cattle futures shot higher on Wednesday amid…

Be careful what you wish for.  The first part of May was unusually cool, delaying crop development and germination.  Warmer temperatures were needed.  Heat is finally catching up to the season as temperatures will be above average in as much as 80% of the Corn Belt this week.  The warmest temperatures seem centered in the Dakotas, where they will see 95 degrees.  As we look out ahead through the month of June, extreme temperatures pull back a bit, but they remain elevated by 5 degrees or more above their averages in much of the Western and Northern regions.  The Eastern Corn Belt meanwhile hovers closer to its historical temperatures.   The near-term forecast has quickly shifted drier.  How long that lasts will determine if it is a good thing or a bag thing.  I am of the belief that it is a good thing for the time being, for a couple of reasons.  First off, after receiving over 3 inches of rain on one of our farms last week, there was some light ponding, and so drier weather is needed.  What is amusing (at least to me) is that our farms fell into the US drought monitor's "abnormally dry" region. …

Out of gas: My daughter tells me when she tried to fill up at her usual gas vendor in Des Moines last week that they were out of lower-grade, cheaper fuel and cars were pulling in and then leaving again empty. She had enough gas to get to Sparky's on HWY 20, but they were out of E-15, the blend she typically uses. So, it was not just price but availability of gas as holiday demand drained the system. I normally do not blame presidents for things like this but this time why not? He created a global shortage of fuel and is selling our gas into the world market creating a domestic shortage. The oil companies should be able to pay for his ballroom and Arc de Triumph given the windfall profits he is making them.   Our gas shortage will be temporary while the one in Cuba is terminal. They depend almost entirely on imported oil in Cuba. They used to get it from Russia, Venezuela and Mexico and now what they get is entirely dependent upon what we let them receive. We are in a political impasse with Cuba and it is a long story how we…

President Trump has said "the clock is ticking" for Iran to make a deal or else "they are going to get hit much harder." Resuming the military offensive against Iran is not off the table for this long holiday weekend ahead, especially after a House vote on war powers was postponed to leave standing President Trump's assertion that the 60-day timer was paused by the ceasefire. While the lower oil market was pricing in elevated odds of a peace deal that could be celebrated over the weekend, also increasing was the potential for traders to be surprised by things blowing up again. As one of many paths forward, consider a scenario where U.S. strikes on Iran continue only briefly as part of what will end the war rather than extend it. Attempting another show-of-strength operation targeting Iran's remaining nuclear capacity could provide political cover for saying again that the nuclear part is taken care of, so hostilities can cease while focus turns to an agreement for keeping the Strait of Hormuz open. The contrasting alternative is for a deal to be struck soon, but that currently presumes one of the sides will cross its red line, either Iran agreeing to…

Grain markets started strong this week on news that China has agreed to purchase an additional $17 billion in US ag products.  This is positive news but like most deals, the devil is in the details.  Is this $17 billion price picked up at the farm or FOB Shanghai?  Is there any fixed volume amount, or is it all based on dollar value?   Is there a mechanism in place if they do not follow through?  What have we given up in return?  We may never have all the answers. While China did not follow through on their Phase 1 trade agreements, we will give them the benefit of the doubt and assume this time will be different as they have fully consummated their initial purchase of 12 MMT of soybeans.   This trade deal is a matter of perspective.  I have seen some feedback where analysts were ecstatic because they compared this deal to the last 12 months of Chinese purchases.  Looking through that type of filter, China will buy 3X more in 2026 than what they did in 2025.  What a smashing success!  However, this approach takes a short term result out context, ignoring the impact from a decade…

I farmed for 51 years where I made the decision as to what to plant before my son took over last year. I grew some corn every year or tried to and many years I was 100% corn. Other crops grown were alfalfa, oats and soybeans. As a livestock feeder I grew a lot of corn on corn and as few soybeans as I could, primarily as a rotation crop to control rootworm. I have always gotten better corn yields than soybean yields. Never much liked walking beans although that is not done anymore. We are now planting soybeans in April to better the soybean yield. My best soybeans, highest yield most profitable soybeans followed multi-year corn. Thus, it always felt to me that I had to grow a lot off corn to produce profitable soybeans. USDA says that we will grow 15.995 bln bushels of corn this year worth $4.40 bushel or over $70bln. More when the corn cut for silage is added. USDA looks for farmers to grow 4.435bln bushels of soybeans worth $11.40 per bushel or a little over $50bln. As a general statement corn has been a profitable crop for us while soybeans not so much.…

05/19/2026 Click Above to Watch the Morning Market Talk Video Market Fever Lifted for Now On the Grains Wheat markets firmed amid mild follow through buying overnight as USDA noted further deterioration of HRW wheat conditions in the Plains. Corn and soybeans traded narrowly around unchanged overnight. Traders are catching their breath and recalibrating markets after the whip-saw price action late last week and Monday as they digest the outcome of the U.S./China trade talks, while also monitoring weather, crop development, demand prospects and geopolitical events.Crude oil futures weakened overnight after President Trump said he would hold off on a planned U.S. attack on Iran as he continues to seek a peace deal. The U.S. also extended a sanctions waiver allowing countries to purchase Russian oil currently stranded at sea for another 30 days. There continues to be a lot of balls in the air that traders must try to juggle. Speculative money flow will give the “temperature” of traders. For now, the fever has lifted, though it may not have fully broken. Winter Wheat Conditions Second Worst Ever USDA rated 27% of the U.S. winter wheat crop as good/excellent, down one percentage point from the previous week, tying 1996…

What occurred at the Trump/Xi Summit? No one really knows for sure. The Chinese do not say. There are many interpretations…here is mine. It would appear China doesn't want to make specific political deals but instead return to a system of commercial ones made by market conditions through a new entity called a Board of Trade. "The U.S./China body would oversee trade issues in sectors including aviation, energy, medical equipment and agriculture. U.S. Trade Representative Greer said the framework would seek tariff reductions on roughly $30 billion worth of goods." $30 bln spread out over so many categories of goods may not amount to all that much for Ag. A White House Fact sheet says, that in addition to the soybeans, "China has agreed to purchase at least $17 billion of agricultural products from the US annually through 2028." While there has been no confirmation of this agreement from the other side we will go with that number for analysis. In 2020 China had committed to purchasing $200bln in goods over 2 years from us and never came close. They bought next to nothing from us in 2025 and did not deplete reserves. There is currently no strong information that…