Perspective: Morning Commentary for May 19

By: Arlan Suderman, Chief Commodities Economist

Tue, 19 May 2026, 13:21

Today's Perspective Video: Corn, Soybean & Wheat Prices Rally on China Announcement

May 19 – High interest rates and a defiant Iran created downward pressure on stock futures overnight. Yet, the VIX remains stable near 18 this morning, while the dollar index trades near 99.3. Yields on 10-year Treasuries are trading near 4.64%, while yields on 2-year Treasuries are trading near 4.09%. WTI crude oil is trading near $108 per barrel, while Brent trades near $110 per barrel. Gains in the grain and oilseed sector were more modest overnight, but mostly positive nonetheless, as money flows into a sector expected to gain from last week’s summit in Beijing.

Iran’s latest peace proposal reflects defiance – a refusal to yield on any U.S. demands. Iran seems to have back tracked on previous progress in negotiations, now demanding that it be able to maintain its uranium enrichment, receive reparations for the war, bring an end to all fighting against it and its proxy groups, release all frozen funds, and removal of all U.S. military forces from the area. This follows a Truth Social post by President Trump on Monday afternoon stating that the leaders of Qatar, Saudi Arabia and the UAE had requested that he hold off a military attack on Iran scheduled for today because, “a Deal will be made, which will be very acceptable to the United States of America, as well as all Countries in the Middle East, and beyond.” Caution is always advised in interpreting comments in the “fog of war,” but the rhetoric suggests that the two sides are still far apart, raising the risk of renewed active military action against Iran that supposedly was going to start today. The bottom line is that there is little evidence that the Strait of Hormuz will open any time soon, and that means that global energy and fertilizer deficits will continue to build. The energy shortages are expected to become more acute in June and July – especially in Asia. The fertilizer story is more of one for the 2027 global crop cycle, with some localized exceptions.

I fully expected a trade agreement to come out of last week’s summit between President Trump and President Xi, and we got one. I have to admit that I started to doubt when Trump returned home on Air Force One without an announcement, but I still leaned toward seeing one in the days ahead. We still don’t have the details that we’d like to see, nor has China confirmed what the White House has thus far posted. But that’s not unusual for trade agreements with China. I remain a skeptic on whether China will fully follow through on this agreement. Annual purchases of $17 billion in Ag products above and beyond the soybean commitments made last October would rank up there as one of the larger Ag trade agreements with China on record. China doesn’t have a good track record for following through on trade agreements, although it surprised me by doing so with the October agreement to this point. Yet, Trump and Xi are expected to meet several more times this year, which will increase the odds of compliance. China’s economic data is turning downward once again, indicating that Xi needs support from Trump to help him gain the renewed confidence of Party leaders so that he can serve another term in office.

China’s April retail sales came in sharply below expectations. The market anticipated 2% growth, but the official data fell to just 0.2%, well below 1.7% growth in March. The category breakdown was alarming as well, with major big-ticket items suffering steep double-digit losses – autos plunged 15.3% (vs -11.8% in March), home appliances fell 15.3% (vs -5%), and furniture dropped 10.4% (vs -8.7%). Electronic devices, the sole outperforming category that saw over 20% growth in previous months, lost momentum, falling sharply to 6.2% in April. Catering sales mirrored the downward trend, slowing to 2.2% in April, down from 2.9% in March. The consumer market decelerated faster than expected despite a moderate rise in consumer inflation. Longer term increases in energy prices pose a significant risk for China’s attempts to stabilize its already fragile consumer market.

Industrial output also fell short of expectations, with growth of 4.1% YoY in April, below 4.7% in March and the expected 5.9% growth. This fell short of 4.7% growth in March and the anticipated 5.9% pace, marking the slowest growth since July 2023. The slowdown underscores lingering stress from high energy prices, overcapacity, and overall fragile domestic demand. While the broader manufacturing sector decelerated to 5.8% growth, down from 6.4% in Q1, the high-tech segment maintained impressively strong growth at 12.6%. Yet, the official unemployment headline sent a conflicting signal, stabilizing at 5.2% in April, down from 5.4% in March and 5.3% in February.

So China has incentive to buy Ag commodities from the United States to get the tariff reduction it needs for accessing the much larger U.S. consumer market so that it can right the ship with its economy. We don’t know if it will hit the target on purchases. I remain skeptical. We don’t know the make up of the purchases either. Spreading that $17 billion over many commodities merely raises the floor under the markets. Focusing it on a few commodities creates a possible bullish demand scenario. Fund managers are afraid to be short any of the potential commodities until they know more about what China will do, resulting in the initial price strength witnessed this week.

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Perspective: Mid-Day Commentary for July 2

July 2 – It’s a tale of two extremes on Wall Street at midday, with the lower rate expectations following this morning’s ugly jobs print providing tailwinds to drive the Dow Jones to another fresh all-time high and remain in the green (+0.5%) at the time of writing, while the ugly selloff in the tech sector is driving the Nasdaq sharply lower (-2.1%), leaving the S&P caught in the middle (-0.6%). The VIX remains relatively muted, up from the morning lows but still on the low side of recent ranges as it hovers around 16.7. The dollar continues to hang in the red amid the aforementioned shift down in rate expectations, though it has bounced from its lows as it currently hangs around the 100.8 level. Treasuries are mixed at midday as well, with 10-year yields up on the day to 4.48% while 2-year yields are down on the day to trade near 4.13%. Crude oil has rebounded through the session as well, with nearby WTI now slightly in the green around $68.20 while nearby Brent remains slightly in the red near $71.20. The ags have lost steam through the session, now trading largely mixed after erasing morning gains.

Mike CastleThu, 02 Jul 2026, 17:09

Grains & Oilseeds

Perspective: Morning Commentary for July 2

July 2 – All eyes are on the labor market to start the day, with the Friday holiday pushing June’s Non-Farm Payrolls report up to the same day, and release time, as weekly Jobless Claims. It was a very ugly headline print for Non-Farm Payrolls with only 57k jobs added in June, effectively only half of the expected 110k. To make matters worse, both April and May were revised lower by 31k and 43k, respectively, to now show a combined 277k jobs added instead of 351k. Despite this negativity, the unemployment rate dropped to 4.2% from the 4.3% seen from March through May, representing the lowest headline unemployment reading since June of last year. However, the drop was largely a function of a collapsing labor force participation rate, falling 0.3% month-over-month to sit at only 61.5% in June, a low not seen since March 2021 during the pandemic recovery. Average hourly earnings came in as expected, up 0.3% month-on-month and 3.5% year-on-year, as did the average workweek at 34.3 hours.

Mike CastleThu, 02 Jul 2026, 13:24

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Morning Grain Comments 7-2

Morning Grain Market Comments - Matt Zeller

Matt ZellerThu, 02 Jul 2026, 11:55

Grains & Oilseeds

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