The Commstock Report

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…

05/29/2026 Traders Continue to Favor Soybeans, Soy Oil Morning Market Talk There will not be a morning Market talk due to tech issues.On the Grains Soybeans and soy oil traded higher overnight, with soyoil posting contract highs. Corn and wheat failed to sustain early buyer interest and are mildly weaker. Soybeans are working on modest weekly gains, while corn and wheat are poised for sharp losses. End-of-week and end-of-month positioning will come into play today, with traders monitoring geopolitical events and weather. The U.S. and Iran have reached a preliminary deal to extend a ceasefire by 60 days and discuss the future of Tehran’s nuclear program, pending President Trump’s approval. Markets are proceeding with cautious optimism, as final wording on the memorandum of understanding hasn’t been finalized, according to Iran’s semi-official Tasnim news agency. The memorandum of understanding would reportedly guarantee that shipping through the Strait of Hormuz is unrestricted and Iran would have to remove all mines from the strait within 30 days. Treasury Secretary Scott Bessent reiterated Trump’s three “red lines” required for a deal — reopening the Strait of Hormuz, Iran surrendering highly enriched uranium and ending its nuclear program. Markets anxiously wait to see if they get results…

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. …

05/27/2026 Click Above to Watch the Morning Market Talk Video Wheat Proving Springtime Rallies Don’t Last On the Grains Corn and wheat opened higher overnight and faded, while soybeans took the opposite path and are trading modestly firmer early this morning. Wheat is proving once again that springtime rallies are really difficult to sustain – even in poor crop years. With harvest results starting to trickle in from the Southern Plains and full-blown harvest just around the corner, speculative money is flowing out of long positions, especially winter wheat markets. Corn is following. Crude oil is weaker amid optimism that a U.S./Iran peace deal and a reopening of the Strait of Hormuz are coming, despite recent attacks. If support at Tuesday’s spike low and the May 6 low are violated, it would point nearby WTI crude oil futures toward the $89 level that provided support in March and April, after the initial upside price spike due to the war. Crop Emergence Jumps Corn emergence jumped 21 points to 60%, two percentage points ahead of the five-year average. Soybean emergence increased by 17 points to 49%, nine points ahead of average. This week’s heat in the western and central Corn Belt…

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…

05/26/2026 Click Above to Watch the Morning Market Talk Video Bears Keep Grip as Iran Deal Fatigue Grows On the Grains Grain and soy futures traded lower coming out of the extended holiday weekend as traders have a split focus between the war situation with Iran and weather. While both could create increased volatility, money continues to flow out of grain and soy markets as traders pare their massive cumulative net long position. Warm temperatures are forecast for the western and central Corn Belt during the next week, while the eastern Belt will trend seasonal to a little cooler. The warmest temps are expected over the northwestern Corn Belt. Rainfall during the next week is expected to be limited to western and southern areas of the Corn Belt into the Ohio and Tennessee river valleys, with the remainder of the region being dry. Warm, sunny conditions will promote crop development in areas with plentiful soil moisture, but rainfall amounts will be critical for the hottest areas, where soil moisture is already lacking. On the geopolitical front, the U.S. and Iran exchanged fire overnight even as both sides said there was progress in talks to reach a peace deal. A pattern…

We honor those who sacrificed their lives in service of our country on this Memorial Day. Grains were closed on Memorial Day before a 7 pm central start for the Tuesday session. Futures were called to a softer start under the weight of lower crude oil, but market sentiment still had the potential to flip based on developments with Iran. In the Headlines Deal or no deal? The weekend headlines started with "Trump says Iran peace deal is near," and then "U.S. and Iran agree in principle to a deal to reopen the Strait of Hormuz," before back-stepping on Sunday to "Iran-US talks continue, no breakthrough yet on war." The market was indicating the consensus expectation for an agreement to be reached as oil futures fell a quick $5 upon opening on Sunday night for the Tuesday session, while stock index and metal futures were higher. President Trump's latest comments were that "Negotiations with the Islamic Republic of Iran are proceeding nicely!" U.S. officials had earlier told reporters that Iran was agreeing to give up its enriched uranium under a nuclear deal that would still be hashed out over the next 60-days of an extended ceasefire. The Strait of Hormuz…

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…