The Commstock Report

A significant shift was marked in the expectations for U.S. monetary policy. Futures markets moved to assign a higher probability for the central bank raising interest rates this year over keeping the federal funds rate unchanged at 3.75 percent. The updated interest rate outlook was a reversal from the start of the year when traders were pricing in at least two quarter-point rate cuts, with some positioned for as much as a full point of easing. FOMC rate hike odds and bond market yields jumped further on Friday following the monthly jobs report.   Payroll counts were stronger than expected, just as numbers were in the leading employment reports earlier in the week. The Jobs Openings and Labor Turnover Survey (JOLTS) for April measured job openings climbing from 6.9 to 7.6 million, the highest in nearly two years. Layoffs were down, but fewer people quit their jobs, which signaled diminishing confidence in being able to find something different. Similarly, even though job openings were up, actual hirings were down, suggesting employers were stretching out the hiring process and becoming more selective due to uneasiness about the economy. Another private payrolls report for May beat expectations as it recorded growth in…

06/05/2026 Click Above to Watch the Morning Market Talk Video Markets Relatively Calm for Now After Tumultuous Week On the Grains Corn futures extended their sharp price plunge overnight, with July marking a contract low and December falling to the lowest since mid-January. Soybeans and the wheat markets had a varied tone in two-sided trade. All things considered, grain and soy markets were relatively quiet overnight after a week filled with massive fund liquidation. The aggressive fund selling has left markets overdone to the downside, but it’s difficult to get the herd turned when it’s all heading swiftly in one direction. Bulls need a catalyst to halt the selling and reenergize their efforts. Markets indicate weather conditions are viewed as generally favorable. While that may be broadly the case, these maps signal there are extreme variances. It’s haves (ample soil moisture) vs. have-nots (drought) vs. have too much (saturated). Key through the growing season will be whether the extremes smooth out or widen. The geopolitical situation in the Middle East remains shaky. Attacks continued overnight between Hezbollah and Israel in southern Lebanon after the Iran-backed militant group rejected a U.S.-brokered proposal aimed at securing a broader truce. The U.S. and…

In my view the conflict with Iran is worsening rather than improving. Some believe that President Trump has gotten caught in what they call an "escalation trap". "The escalation trap is a cycle where limited military actions fail to achieve their intended political goals, causing leaders to continuously escalate the conflict in an attempt to bridge the gap between military action and strategic outcomes. This cycle often leads to a widening, uncontrollable war." I think that the president's constant vacillation between additional military action and negotiation is because he is searching desperately for an exit from the trap without admitting he is caught in it. Israel does not want to end the war with Iran still functional enough to continue to be a threat. The US blockade will strain the Iranian economy but they will deem the political benefit, more strain on the global supply chain that will make everyone else hate us more, worth it. Even if some kind of superficial agreement is reached, it will not end the larger conflict. The Mid-East is the epitome of a "forever war" if there ever was one.   I also do not like being misled as to the state of affairs.…

06/04/2026 Screwworm Confirmed: Emotion, Money Flow and Perception Vs. Reality Click Above to Watch the Morning Market Talk Video Screwworm Confirmed: Emotion, Money Flow and Perception Vs. Reality On the Grains Soybeans faced follow through selling overnight after downside breakout from the sideways range on Wednesday. Corn followed, with July futures scoring a contract low and December matching the early February low. Winter wheat markets also traded lower. China has started purchasing U.S. soybeans under the framework of the Busan trade agreement, according to USDA Deputy Secretary Stephen Vaden. This is something I alerted you to last Friday via my subscribers-only video. On May 29, USDA reported daily soybean sales of 192,000 MT – 60,000 MT for 2025-26 and 132,000 MT for 2026-27. Daily soybean sales announced on May 14 were similar, with 120,000 MT for 2025-26 and 132,000 MT for 2026-27. It appears these purchases by “unknown destinations” was likely China. The key question now is whether Vaden’s comments mark the beginning of a sustained Chinese buying campaign or simply the first symbolic purchases under the new agreement. Until USDA export sales data verifies the volume and frequency of transactions, soybean traders are likely to view the reported purchases…

The corn market has once again given back all its war premium and then some, falling below the $4.70 region.  The back and forth between the on again - off again conflict between the US and Iran continues.  One interesting consequence with war is it tends to invent new technologies (think GPS, early-stage computers).  This war has created a new word.  That word being "quasi-ceasefire" - used to refer to the pending conflict between the US and Iran.  It appears to be an oxymoron such as "quasi-diet".  In this scenario, I believe it means either side promises not to fire on the other….unless they get a clear shot.   While traders appear to want to believe that the Strait of Hormuz will reopen soon, the current standoff is less encouraging.  Online bets place the chance at opening the Strait of Hormuz by September 1st and 50%.   The market is growing tired of the back-and-forth stalemate.  Crude oil and corn are trading in opposite directions to the start the week.  Bulls will want to keep attention on the quasi-ceasefire but may find it difficult.  The weather outlook is positive, and as such will increasingly apply pressure to the market.  The dry…

06/03/2026 Click Above to Watch the Morning Market Talk Video Tariffs Push Rebuilds; Middle East Conflict Continues On the Grains Soyoil futures strengthened overnight and are trading just below Monday’s contract highs. Soybeans followed to the upside. Wheat markets mildly extended their price slides. Corn has come off its for-the-move lows overnight to chop around unchanged early this morning.Traders have a lot of volatile news and events to digest, with many of the factors giving conflicting price signals. The U.S. and Iran continued their clashes overnight, threatening the shaky ceasefire, while the Trump administration proposed new tariffs on a host of key trading partners. Traders are also digesting normal summertime fundamentals, including weather, crop conditions and potential impacts to production potential. The U.S. is proposing new tariffs of at least 10% on imports from 60 trading partners, the Office of the U.S. Trade Representative said late Tuesday.   Following an investigation into how trade partners handle goods allegedly produced by forced labor, a 10% tariff rate would apply to imports from Canada, Mexico, the European Union, Taiwan and UK, among others. Products from other major economies, including China, India, Japan, South Korea, Brazil and Switzerland, would be subject to a 12.5%…

Part 2 of 2 One of the most notable differences between this Ag recession and the 1980s farm depression is that this time politicians do appear to be more open to farm aid than before. Back then, we had to have tractor-cade protests and farm-aid concerts to draw attention to the disaster. Back then, farm banks failed in large enough numbers to worry the Fed. There is no issue this time with farm bank solvency. This time Trump exchanges political support from farmers for ACHs, above and beyond farm bill safety net provisions, on a regular basis. It is entirely political, but the ACH deposits spend the same. These payments do not make farm finances whole but they reduce the sting of his trade war policy.  The farm bill safety net is being improved and hopefully will not be deeply drawn upon. It is likely they will pass a new farm bill before the mid-term election. Farmers never got this much attention in the 1980s until the farm banking sector was overwhelmed. The Farm Credit System went belly up but this time they are solvent enough to continue paying dividends to their borrower/customers. They used the farm aid back then…

06/02/2026 Click Above to Watch the Morning Market Talk Video Grain Purge Continues On the Grains Corn, soybean and wheat futures traded lower overnight, despite lower-than-expected initial crop condition ratings for corn and soybeans and a sharp reduction to Australia’s expected wheat production. Speculators continue to shed length in the grain markets, proving again how powerful money flow can be when the herd gets moving all in the same direction. Crude oil futures eased from Monday’s gains as traders wait on developments in the Middle East amid mixed messages on talked aimed at reopening the Strait of Hormuz and ending the war. USDA’s initial corn crop condition ratings came in lower than anticipated at 67% good/excellent, down two percentage points from last year and four points below the five-year average. USDA pegged 5% of the crop as poor/very poor. Notably poor conditions were reflected for Ohio, Colorado and Texas – with all sub-50%. That’s a rough start for those states. Colorado and Texas are lacking soil moisture, while Ohio has been saturated. USDA’s first soybean condition rating placed 66% in the good/excellent categories, down one point from last year but one point above five-year average (actually a three-year average since…

Part 1 of 2 While crop production margins have been negative and subsequently the number of farm bankruptcies has climbed, there is just no where near the degree of financial crisis occurring that defined what the Ag sector went through in the 1980s.  Nationally, farm bankruptcies were 44% higher last year than in 2024, but the increase is inflated in terms of percentage from a relative low level. The farm media talks up the current financial squeeze intending to elicit sympathy from readers and the public but what it shows is the lack of appreciation for what a real farm sector economic disaster looks like. In many ways, the Ag Depression of the 1980s was the defining period of my life.   Interest rates have climbed from historical lows but are a third of what they were at their peak in the `1980s crisis. Commodity prices reflect the value of the dollar. Currently, the dollar index hits a wall near par (100). Comparatively, during the U.S. farm crisis of the 1980s, the U.S. Dollar Index (DXY) surged dramatically, peaking at 164.72 in February 1985. This represented an appreciation of roughly 80% to 95% from its mid-1980 trough, devastating American agriculture by…

06/01/2026 Click Above to Watch the Morning Market Talk Video RINs & Repeat for Soy Oil; Corn Struggles Continue On the Grains Soybeans and soy oil strengthened overnight, with the later scoring contract highs and pushing to the highest level since November 2022 on the continuation chart. Wheat also firmed amid corrective buying, while corn struggled to find buyers, with July futures touching the lowest price since Feb. 20.As the calendar flips to June, weather and crop conditions typically dominate traders’ focus. This year, geopolitics and trade remain prominent in headlines, giving traders a split focus. Forecasts call for seasonal to slightly warmer temperatures across northern and western areas of the Corn Belt, while southern and eastern locations are expected to be cooler. Rains are likely to favor the dry western areas of the region. Meanwhile, USDA will issue its first crop condition ratings of the growing season for corn and soybeans after today’s market close, with high marks expected. RIN Prices Surge to Record Highs Soy oil futures, and soybeans by association, are being supported by record prices for Renewable Identification Number (RIN) credits. D4 biomass-based diesel and D6 conventional ethanol RINs climbed to all-time highs, underscoring growing stress…