Perspective: Morning Commentary for May 13

By: Arlan Suderman, Chief Commodities Economist

Wed, 13 May 2026, 13:48

Today's Perspective Video: Pivotal Week for the Commodities

May 13 – Red hot inflation at the wholesale level greeted investors this morning, contributing to a generally negative tone for stocks to start the day, while the grain and oilseeds continue to benefit from a bullishly construed USDA crop report released yesterday. The VIX firmed on this morning’s inflation data, but it continues to trade near 18, suggesting a lack of panic by investors, while the dollar index trades firmer near 98.6. Treasury yields popped on the data release, with 10-year yields trading near 4.48% this morning, reflecting a 10-month high, while yields on 2-year Treasuries probed above 4%. WTI crude oil prices are trading near $103 per barrel this morning, while Brent trades near $107 per barrel. The grain and oilseed markets were mixed to firmer, consolidating following yesterday’s big gains.

The headline producer price index grew at 1.4% on the month in April, nearly tripling analyst expectations that it would hold steady at 0.5% monthly gains. The headline PPI rose 6.0% year-on-year in April, up notably from the 4.0% pace posted for March, and well above the 4.8% growth expected by analysts. It’s easy to blame that on surging energy prices due to the Iran war, but core PPI levels soared as well. The core PPI that excludes food and energy rose 1.0% on the month in April, up from 0.1% in March and above analyst expectations of 0.3%. This was a huge miss by analysts. Yesterday’s consumer data showed flat year-on-year inflation in the goods sector a year out now from the reciprocal tariffs, but today’s producer level data showed goods inflation rising 2% on the month and 7.4% on the year in April.

The services sector posted inflation of 1.2% on the month and 5.5% on the year. In fact, the Bureau of Labor Statistics notes that 60% of the April inflation at the producer level can be attributed to a 1.2% gain in final demand services, which was a four-year high. Two-thirds of those gains can be traced to a 2.7% jump in margins for final demand trade services, or margins collected by wholesalers and retailers. Another major factor in the rise in April inflation at the producer level can be attributed to increased margins for machinery and equipment wholesaling. An increase in margins collected might reflect increased confidence in the market due to rising demand as business incentives in the “One Big Beautiful Bill” kicked in this year. Partially offsetting this was a 2.4% drop in portfolio management charges. As for the jump in goods inflation, the BLS noted that more than three-quarters of the of the jump can be attributed to a 7.8% jump in energy. Over 40% of the April inflation can be attributed to a 15.6% rise in the index for gasoline. On the other hand, the index for chicken eggs fell by nearly 50% (49.7%).

President Trump arrived in Beijing over the past hour to a lot of fanfare. It is late evening there now, so direct talks with President Xi and his team will take place tomorrow, before Trump boards Airforce One again to return home. President Trump took more than a dozen corporate executives with him, with just one of those representing the Ag sector. Airplanes, finance and chips are expected to occupy much of the trade talks, based on the makeup of the group traveling with the president, although Ag continues to be mentioned. Iran will also be a significant focus. Sources close to the talks suggest that corn could very well be part of a deal likely to be announced tomorrow, along with possibly dried distillers grains and solubles (DDGS). I still wouldn’t be surprised if wheat is a part of the deal, although I hear less about that. The sources suggest that soybeans remain a part of the discussions, but I remain skeptical that we’ll see anything meaningful there, other than possibly a trade off to buy more corn/DDGS in exchange for lowering next year’s soybean commitment. We won’t have 25 mmt of soybeans to sell China with the current biofuel program, and China’s reserve doesn’t have room for that many soybeans. Nonetheless, I can’t rule out some token soybean purchases. I don’t look for a block buster Ag deal, but any notable corn/DDGS purchases could still make a significant difference.

China’s official Ag Ministry crop balance sheets (CASDE) may provide some clues. The CASDE report projects that 2026-27 soybean imports will drop to 95.5 mmt, with crush falling to 94 mmt. Those numbers are well below USDA’s estimates of Chinese imports rising to 114 mmt, with crush at 110 mmt. China seems to be signaling that it doesn’t need the soybeans, amid a shrinking hog herd. CASDE calls for this year’s corn yield to rise to a trend level of 108 bushels per acre, keeping stocks relatively stable amid soft demand. On the other hand, USDA estimates suggest that China will experience a 12 mmt drop in stocks in the 2026-27 marketing year, bringing stocks down to 55.5% of annual usage, which would be their lowest levels since 2018. Regardless, we should know something over the next 24 hours, assuming that a deal can be reached. That could create some additional volatility in the grain and oilseed markets here in the States. Meanwhile, yesterday’s surge in wheat prices, trading the 45-cent daily limit higher in Kansas City, triggered reports of European wheat sales into the States, incentivized by the arbitrage.

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Matt ZellerWed, 05 Aug 2026, 12:39

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Matt ZellerTue, 04 Aug 2026, 12:43

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Matt ZellerMon, 03 Aug 2026, 12:45

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