Perspective: Morning Commentary for May 11

By: Arlan Suderman, Chief Commodities Economist

Mon, 11 May 2026, 13:27

May 11 – This is a big week for the commodity markets – particularly the Ags. There will of course continue to be a focus on the war with Iran and its implications for energy and fertilizer supplies. But USDA will also weigh in tomorrow with its first supply and demand estimates for the 2026-27 marketing year, followed by the possibility of a significant trade agreement with China later in the week when President Trump travels to Beijing. Stock futures were quietly mixed overnight, with a bit of negative bias this morning. The VIX is trading near 18 this morning, while the dollar index trades near 97.9. Yields on 10-year Treasuries are trading near 4.38%, while yields on 2-year Treasuries are trading near 3.91%. WTI crude oil is trading near $97 per barrel at this hour, while Brent trades near $103 per barrel. The grain and oilseed sector was mostly higher in overnight trade.

Both Iran and the United States continue to hold onto their non-negotiable objectives that are far apart from one another. After 47 years of listening to chants of “Death to America,” President Trump refuses to accept any deal that allows Iran’s Revolutionary Guard to have possession of enriched uranium that could be used in a nuclear weapon. For its part, Iran refuses to give up its enriched uranium, while also demanding that it be given full control of the Strait of Hormuz to collect fees from ships passing through it while also controlling who is allowed to pass through it. That is unacceptable to President Trump, as well as to other Gulf States whose commerce depends on shipping through the Strait. And so the standoff continues, and that is fine with Iran. It believes that time is on its side – perhaps the only option for survival of the regime. As such, world energy and fertilizer supplies continue to tighten. The global fertilizer shortage is expected to be most acute in 2027, while energy supplies are expected to experience rising shortages – especially in Asia – in June and July of this year, increasing as we go forward until demand is sufficiently cut to meet the new lower supply level. That is expected to significantly stifle economic growth in Asia, and to some extent Europe, in the coming months, at a time when the U.S. economy is gaining momentum.

It’s in that setting that President Trump travels to Beijing this week. He is expected to arrive in Beijing on Wednesday evening Beijing time for a welcome ceremony. A bilateral meeting with President Xi is expected on Thursday morning, including a bilateral tea and a working lunch with Xi. A delegation of U.S. CEOs are expected to accompany Trump on the trip, raising hopes of a trade agreement between the two powers. Chinese Vice Premier He Lifeng and U.S. Treasury Secretary Scott Bessent are meeting this week ahead of the summit seeking to work out the details of the anticipated agreement. Look for the agreement to include economic initiatives, likely including China’s purchases of airplanes and U.S. purchases of car batteries, or something similar, along with agreements on extending the shipment of rare earth minerals to the United States, and China’s purchases of U.S. chips, and energy and Ag commodities. I do not expect notable quantities of U.S. current year soybeans to be included in the deal, although a recent surge in soybean call options gives me reason to pause. However, I do expect a package of other Ag commodities to be included. Whether those quantities are market-movers is yet to be seen.

I’m frequently asked whether the Iran war has hurt the relationship between Trump and Xi. I do not believe that it has done so in any significant way. It’s true that Iran has been a critical partner for China, and a major source of cheap crude oil. But it’s also true that this has been a relationship of convenience, with China and Iran’s core values far different from one another. In fact, Iran’s current actions of shutting down the Strait of Hormuz have proven to be quite costly to China. And President Trump and President Xi share a mutual respect for one another – one built on relationship – even though their core values are far different as well. Both need each other politically right now. As such, they both have a vested interest in seeing this happen this week. The remaining question is, what will be the scope of energy and Ag commodities included in the deal?

But first, we have USDA’s WASDE crop report tomorrow, including its first official supply and demand balance sheets for the 2026-27 marketing year. That will provide the backdrop then to Thursday’s anticipated trade agreement announcement with China, as well as weather and Iran war developments through the summer. The average new-crop soybean ending stocks estimate coming from the trade is 361 million bushels, according to Reuters, which tells me that the trade doesn’t expect China to purchase 25 million metric tons of U.S. soybeans in the coming year either, just as I don’t. However, trade expectations for the other major commodities don’t reflect expectations of big shipments to China either. As such, the opportunity for a surprise for the trade is certainly there this week, via tomorrow’s reports, as well as Thursday’s anticipated trade deal announcement. These markets will continue to be vulnerable to fund liquidation on rumors of a possible peace treaty with Iran, but the tail winds are certainly behind them otherwise as we head into the summer. This week should tell us a great deal.

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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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