Ag Markets Caught Between Tehran & Beijing

China reopens poultry access for 17 U.S. states | Farm credit stress builds | USMCA review enters critical phase | Bayer Roundup settlement faces legal pushback

Link: Updates, May 25: Iran Deal Fatigue Grows as “Near Breakthrough”
          Headlines Keep Reappearing
Link: Trump Team Signals Iran Deal Still Fluid as Uranium Fight Intensifies

Link: The Week Ahead, May 24: Iran Deal Framework Still Fluid as Key
          Details Remain Unresolved

Link: Weekend Updates, May 23-24: Trump: Iran Deal Near as
          Hormuz Reopening, Nuclear Talks Take Shape; Details Murky
Link:  USDA Raises 2026 Food Inflation Forecast as
          Grocery Costs Accelerate

Link: Video: Wiesemeyer’s Perspectives, May 22
Link: Audio: Wiesemeyer’s Perspectives, May 22

TOP STORIES
 

— U.S. strikes Iranian missile sites amid fragile peace push: U.S. forces attacked Iranian missile sites and vessels in southern Iran, framing the action as defensive even as talks over Hormuz reopening and a broader ceasefire continue.

— Iran presses for immediate access to frozen assets: Tehran is demanding $12 billion of its frozen overseas assets upon announcement of a U.S./Iran MOU, with the remainder within 60 days, underscoring sanctions relief as central to negotiations.

— Peace hopes collide with harsh realities: Columnist Walter Russell Mead argues both sides have political incentives to signal progress, but core gaps over security, deterrence, and Gulf Arab vulnerability remain dangerously unresolved.

— China reopens poultry access for 17 U.S. states: Beijing has lifted HPAI-related poultry restrictions for 17 states under the 2020 regionalization agreement, with more states potentially eligible soon as the 90-day post-outbreak timelines are met.

— USMCA review enters critical phase: U.S./Mexico talks are advancing ahead of the July 1 review date while Canada risks being sidelined, with negotiations likely to extend well beyond the formal deadline.

FINANCIAL MARKETS

— Equities today: Global markets were mixed as ceasefire optimism faded following fresh U.S. strikes on Iran, though U.S. futures rallied Tuesday; key data including PCE and GDP figures are due this week alongside major corporate earnings.

— BP chairman ousted amid governance concerns: BP shares fell over 5% after the abrupt removal of Chairman Albert Manifold over governance and conduct concerns, adding leadership uncertainty as the company reassesses its energy strategy.

— Ceasefire hopes seen as longer-term market positive: The Sevens Report says a U.S./Iran deal is largely priced in but could gradually improve markets by easing oil prices, lowering Treasury yields, and allowing investors to refocus on strong earnings.

— Pinch points reshape global economics and trade: McVean economist Michael Drury warns that chokepoints in energy, shipping, AI supply chains, and U.S. fiscal structure are creating compounding vulnerabilities across the global economy.

AG ECONOMY

— Farm credit stress builds: Rising fuel and fertilizer costs from the Iran war are pushing farm loan demand higher and repayment rates lower for a tenth consecutive quarter, with bankruptcies up over 40% in 2025.

AGRIBUSINESS

— Bayer Roundup settlement faces legal pushback: Cancer patients are challenging the proposed $7.25 billion Roundup settlement, alleging collusion and unfair opt-out restrictions, with a fairness hearing set for July 9 and a Supreme Court ruling potentially reshaping future liability.

AG MARKETS

— Markets caught between Tehran and Beijing: Geopolitical uncertainty around the Iran war and unresolved U.S./China tariff structure are keeping commodity, equity, and agricultural markets in a cautious holding pattern.

— Grain markets mixed overnight as corn holds gains: Corn futures held modest gains on weather concerns while wheat and soybeans eased amid mixed demand signals.

— Grain futures trade lower overnight: Corn, soybeans, and wheat all declined as favorable early-season crop conditions outweighed dryness concerns, with July corn at $4.60 and July beans at $11.90¾.

— Global grain markets mixed as weather risks offset peace hopes: Easing Middle East tensions pressured CBOT futures lower while dryness concerns in the U.S. Midwest and Western Europe supported wheat values.

— Ukraine wheat outlook stable despite export slowdown: Ukraine’s 2026 wheat crop is projected near 22–23 million metric tons, with inventories up sharply year-over-year, though export pace is running behind last season.

— India reverses soymeal trade flows: A 41% surge in domestic soybean prices has led India to cancel export contracts and book 80,000 tons of African soybean imports, potentially redirecting Asian soymeal demand toward the Americas.

ENERGY MARKETS & POLICY

— Tuesday: Oil markets caught between Iran diplomacy and renewed strikes: Brent crude held near $96 as markets weighed ceasefire progress against continued military activity, with WTI down 3.6% around $89.50.

CHINA

— China steps up monetary easing: The People’s Bank of China cut its one-year MLF rate to a record low to support slowing growth, with implications for commodity demand, the yuan, and trade tensions with the U.S.

WEATHER

— NWS outlook: Heavy rain and severe weather continue across the Southern U.S. through midweek; unsettled conditions persist in the West; unseasonably hot weather across the northern Plains runs 20–30 degrees above normal.

— Corn Belt turns drier as heat builds across Plains: A drier, warmer 15-day forecast favors rapid planting progress in the western Corn Belt but raises growing concerns about topsoil moisture heading into June.
 

—Equities today: Global markets were mixed after optimism over a near-term end to the Middle East conflict faded following fresh U.S. strikes on Iranian targets. Meanwhile, U.S. stock futures rallied Tuesday as Wall Street reopened after the holiday weekend, with investor sentiment lifted by growing optimism over a possible peace agreement between the U.S. and Iran. Despite the improved tone, major sticking points remain unresolved, including Iran’s nuclear program and Tehran’s insistence on retaining influence over shipping activity through the Strait of Hormuz. Last week, the Dow climbed 2.13%, while the S&P 500 gained 0.88% and the Nasdaq Composite rose 0.45%, supported by optimism surrounding Middle East diplomacy and another round of solid corporate earnings.

In Asia, Japan -0.3%. Hong Kong flat. China -0.2%. India -0.6%.

In Europe, at midday, London +0.8%. Paris -0.8%. Frankfurt -0.4%.

Treasury yields are retreating sharply amid ongoing peace deal hopes despite reports of U.S. missile strikes on Iranian targets over the weekend.

Investors are now turning their attention to a heavy week of U.S. economic data, including the PCE inflation report and revised GDP figures, along with earnings from Zscaler, Salesforce, and Dell Technologies, among others.

—BP chairman ousted amid governance concerns

Energy giant names interim replacement as investors react to boardroom turmoil and strategic uncertainty

Shares of BP fell more than 5% after the company abruptly removed Chairman Albert Manifold, citing “unacceptable” concerns related to governance standards, oversight, and conduct. The board said Ian Tyler will serve as interim chairman following Manifold’s departure, less than a year after he assumed the role in October.

The leadership shake-up adds fresh uncertainty at a critical time for BP, as the company has been reassessing its long-term strategy and increasing its emphasis on traditional oil and gas production. Manifold had been viewed as a key supporter of accelerating BP’s pivot back toward hydrocarbons after investor pressure mounted over weaker returns and concerns that the company had moved too aggressively away from fossil fuels.

The market reaction reflected broader worries about instability within BP’s leadership ranks and the potential impact on strategic execution, particularly as major energy companies continue balancing shareholder demands for profitability with long-term energy transition goals.

—Ceasefire hopes seen as longer-term market positive

Sevens Report says a U.S./Iran ceasefire may not spark an immediate stock surge, but could steadily improve the outlook for equities and bonds by easing oil prices, lowering Treasury yields, and shifting investor focus back toward strong earnings growth and stable economic fundamentals

According to the Sevens Report, markets have already largely priced in expectations for a U.S.-Iran agreement, which is why oil prices have remained near $100 per barrel instead of spiking toward $150 despite months of conflict and disruptions in the Strait of Hormuz. As a result, the report argues that a formal ceasefire announcement alone is unlikely to trigger a dramatic rally in equities. 

Still, the report outlined several reasons why a finalized agreement could become a constructive medium-term catalyst for markets. First, Sevens Report expects oil prices and Treasury yields to decline if tensions ease, with crude potentially retreating into the $80-per-barrel range and the 10-year Treasury yield falling closer to 4.20%. Lower energy prices would reduce inflation pressures and help stabilize financial conditions.

Second, the report said easing geopolitical risks could reopen the door for Federal Reserve rate cuts later this year. The Sevens Report noted that recent FOMC minutes indicated some Fed officials would still favor rate cuts if Middle East conditions normalize and inflation pressures ease. Markets currently see a rate hike as more likely than a cut, meaning any sustained drop in oil and yields could improve investor sentiment toward monetary policy.

The report also emphasized that a ceasefire would allow investors to refocus on what it described as “spectacular earnings and generally solid data.” Sevens Report pointed to continued strength in corporate profits, especially in technology and AI-related sectors, arguing that reduced geopolitical distractions would allow markets to pay greater attention to earnings momentum and underlying economic resilience.

Meanwhile, the report cautioned that the market’s reaction could initially disappoint investors expecting an explosive rally. Instead, Sevens Report said the real benefit would likely emerge gradually through improved market psychology, lower volatility, and a more constructive backdrop for stocks and bonds — assuming inflation does not reaccelerate and economic growth remains intact.

—Pinch points reshape global economics and trade

McVean’s Drury warns geopolitical chokepoints, AI demand, and fiscal strains are exposing fragile links across energy, shipping, and finance

Michael Drury, chief economist at McVean Trading & Investments, argues in his latest weekly economic update that the global economy is increasingly vulnerable to “pinch points” — areas where inflexible supply chains, geography, politics, or financial structures can trigger outsized economic disruptions from relatively small shocks. Drury says the closure of the Strait of Hormuz has become the latest example of how strategic chokepoints can rapidly reshape markets, energy prices, trade flows, and geopolitical strategy. 

Drury notes that crude oil prices have surged more than 50% following the disruption in Hormuz, though he argues the increase has been less severe than many feared because the world entered the crisis with surplus energy supplies and strategic reserves. Still, he warns that complacency about those “insurance policies” could worsen economic problems later this year if Gulf energy exports fail to normalize. He also points to emerging negotiations surrounding a potential new regional deal as markets attempt to stabilize conditions.

Beyond energy, Drury contends that the global economy is now entering a broader restructuring phase driven by geopolitical insecurity and the race to secure alternative trade routes. He highlights growing attention on other maritime chokepoints, including the Straits of Malacca, Bab el-Mandab, the Suez Canal, the Panama Canal, and the Lombok Strait, while emphasizing increased interest in rail and land-based alternatives across Asia, the Middle East, and Latin America.

A major focus of the report is China’s long-term effort to reduce reliance on vulnerable sea lanes. Drury argues Beijing has spent years developing railways, pipelines, ports, and inland logistics corridors stretching across Asia, Europe, and Africa as part of a strategic effort to bypass maritime choke points. He also highlights China’s dominance in global shipbuilding, noting Chinese shipyards now account for roughly 60% of new ship production worldwide and dominate container ships, bulk carriers, and vehicle carriers tied to electric vehicle exports.

Meanwhile, Drury says the AI investment boom is creating an entirely different set of pinch points centered around semiconductors, energy supplies, financing, and rare earth materials. He compares the current AI-driven spending surge to prior transformational investment cycles such as the Space Race, Reagan-era defense expansion, and the late-1990s internet buildout. Unlike prior cycles, however, Drury argues much of today’s capital spending is indirectly being financed through massive U.S. federal deficits, helping keep corporate borrowing costs unusually low despite elevated Treasury yields.

Still, he warns a dangerous fiscal pinch point may now be emerging as U.S. Treasury yields approach or exceed nominal economic growth rates while federal debt has surpassed nominal GDP. Drury says that combination risks creating a “self-reinforcing problem” for government finances, especially given demographic pressures tied to entitlement spending.

Drury concludes that the current period represents far more than a temporary geopolitical shock. Instead, he suggests the world is entering a prolonged era in which governments, corporations, and investors increasingly prioritize resilience, redundancy, and control over critical trade, energy, and technology infrastructure.

—Farm credit stress builds

Wall Street Journal reports that the Iran war’s impact on fuel and fertilizer costs is adding fresh strain to already stressed U.S. farm balance sheets, pushing loan demand higher and repayment rates lower across the Midwest

The Wall Street Journal reported Monday (link) that U.S. banks are increasingly concerned about farm credit conditions as the Iran war drives up diesel and fertilizer prices at a time when many producers are still recovering from the export and price fallout tied to President Donald Trump’s tariff policies last year.

According to the Federal Reserve Bank of Chicago’s latest survey of agricultural lenders, repayment rates on farm loans declined for the 10th consecutive quarter in the first quarter of 2026, while demand for farm loans also rose for a 10th straight quarter. Lenders said many producers are borrowing more simply to cover higher operating costs tied to fuel, fertilizer, labor and equipment expenses.

Mike McKay, who oversees agricultural lending for KeyBank, told the Journal banks are monitoring farm clients “very, very closely” because of the rapidly shifting economic environment. Meanwhile, Jeff Bailey, CEO of the Bank of Eastern Oregon, said farmers are delaying land purchases and equipment investments as they brace for extended financial pressure.

The article noted that many producers are already trimming input costs by planting fewer seeds, switching to less fertilizer-intensive crops, or simply applying less fertilizer overall — decisions that could eventually reduce yields. That concern has become particularly acute following disruptions in sulfur and fertilizer markets tied to the Middle East conflict and fears over supply flows through the Strait of Hormuz.

Farm lenders are also beginning to report deterioration in credit quality. First Mid Bank & Trust said more agricultural borrowers fell behind on payments during the first quarter, prompting the bank to increase reserves for potential loan losses. Farmland Partners likewise added reserves for potential farm loan losses while acknowledging that farmer stress continues to build.

Meanwhile, Nebraska-based Midwest Bank warned that many farmers have already depleted working capital after several years of rising production costs. Bank executives told the Journal that the Iran war’s effect on diesel and fertilizer prices could intensify those financial pressures heading into the summer growing season.

The Journal also pointed to broader financial strain in agriculture. Farm bankruptcies rose more than 40% in 2025 from the previous year, according to the American Farm Bureau Federation, although filings remain below the highs seen during the 2019 farm downturn.

Analysts noted that government support programs and federal loan guarantees continue to provide an important cushion for lenders. Still, for many smaller producers, persistently elevated fuel and fertilizer costs — combined with uncertain commodity prices and trade flows — are tightening margins to levels where even modest additional shocks could push operations into losses.

—Bayer Roundup settlement faces legal pushback

Cancer patients challenge proposed $7.25 billion deal, alleging collusion and unfair restrictions on future claims

A proposed $7.25 billion settlement by Bayer aimed at resolving thousands of lawsuits tied to its Roundup weedkiller is facing mounting legal opposition, according to Reuters. Attorneys representing 13 cancer patients have formally objected to the agreement and are seeking to move the case from Missouri state court to federal court, arguing the deal unfairly limits plaintiffs’ rights while enriching class-action attorneys. 

The settlement, initially proposed in February, would resolve most claims alleging that Roundup causes non-Hodgkin lymphoma and other cancers. Bayer, which acquired Monsanto in 2018, continues to maintain that decades of scientific studies show glyphosate — Roundup’s key ingredient — is safe and non-carcinogenic. The company is still facing roughly 65,000 U.S. claims tied to the herbicide.

Objectors contend the settlement is the result of “collusion” between Bayer and class-action lawyers, who could receive roughly $675 million in fees under the agreement. They also criticized what they called “draconian” opt-out procedures that could make it difficult for plaintiffs to continue pursuing separate lawsuits. 

Meanwhile, attorneys supporting the settlement argue it provides guaranteed compensation to cancer victims at a time when a pending U.S. Supreme Court decision could significantly weaken future Roundup-related claims. Chris Seeger, one of the lead class-action attorneys, said the agreement is backed by firms representing the “vast majority” of claimants and expressed confidence it will ultimately be approved.

The dispute has also drawn scrutiny from federal Judge Vince Chhabria, who oversees thousands of consolidated federal Roundup lawsuits. At an April hearing, Chhabria reportedly voiced “grave concerns” about the legality of the state-court settlement process and the speed at which it was advanced.

Bayer previously paid about $10 billion in 2020 to settle earlier waves of Roundup litigation, but the company has continued to face persistent legal exposure tied to the product. A final fairness hearing on the current settlement is scheduled for July 9, while additional objections are expected before the June 4 opt-out deadline.

Of note: The U.S. Supreme Court is weighing whether to hear a closely watched Roundup case that could dramatically affect Bayer’s future legal exposure. The dispute centers on whether federal pesticide labeling law overrides state-law claims alleging Roundup should have carried cancer warnings. Bayer argues that because the U.S. Environmental Protection Agency approved Roundup’s labeling without a cancer warning, state lawsuits should be barred. Plaintiffs contend state failure-to-warn claims remain valid despite EPA approval. A Supreme Court decision to side with Bayer could sharply limit future Roundup litigation nationwide, while a refusal to intervene — or a ruling against the company — would likely allow the lawsuits to continue. The uncertainty surrounding the pending high court action has become a major factor in Bayer’s efforts to finalize a broader Roundup settlement.

—Markets caught between Tehran and Beijing

Investors see the Iran war and the U.S./China trade relationship as the two dominant political variables driving commodities, equities, inflation expectations, and broader risk sentiment 

For much of 2026, markets have effectively traded around two geopolitical storylines: the Iran war and the evolving U.S./China trade framework. The weekend introduced a degree of optimism on the Iran front, with traders interpreting comments from President Donald Trump and regional officials as signs that a ceasefire or broader agreement could eventually reopen the Strait of Hormuz and reduce energy-market stress. Oil prices reacted immediately, with Brent crude falling sharply as markets began stripping out some of the geopolitical risk premium tied to Middle East supply disruptions.

Meanwhile, the China story remains frozen in uncertainty. There has been little fresh news on tariffs, trade architecture, or the structure of future Chinese purchases of U.S. goods — especially agricultural and energy products. That vacuum itself has become a market factor. Traders increasingly believe that large-scale Chinese buying commitments are unlikely until Washington clarifies the long-term tariff framework and enforcement structure.

The result is a market that appears cautiously hopeful on one geopolitical front while remaining strategically defensive on the other.

The Iran variable has become easier for markets to handicap because it is tied directly to visible commodity flows — especially crude oil, LNG, fertilizers, and shipping. The Strait of Hormuz handles a major share of global energy exports, meaning any sign of reopening or de-escalation immediately affects inflation expectations, central-bank thinking, and industrial input costs. Reuters and other reports have shown how the war has disrupted refining, shipping, fertilizers, coal flows, and manufacturing costs globally.

That explains why equity markets rallied and oil retreated on hopes of progress over the weekend. Investors are effectively betting that even a temporary arrangement could lower transportation costs, stabilize fuel markets, and reduce fears of another inflation spike that would complicate Federal Reserve policy.

But the China issue is more complicated because it is not simply about whether negotiations are occurring — it is about what the rules of engagement will ultimately be.

Markets increasingly believe Chinese purchases are now tied directly to tariff clarity. Beijing appears reluctant to make major long-term commitments while the tariff structure remains uncertain, especially with ongoing U.S. scrutiny of Chinese supply chains, technology access, industrial overcapacity, and alleged Iranian linkages.

That uncertainty matters enormously for agriculture, manufacturing, and transportation markets.

For agriculture, traders continue waiting for signals regarding Chinese soybean, corn, sorghum, cotton, beef, pork, lumber and energy purchases. While the Trump administration has promoted the possibility of broader trade understandings and purchase agreements, markets still do not know whether tariffs will remain elevated, be selectively reduced, or become part of a longer-term managed-trade arrangement.

In effect, the market believes China is saying: show us the tariff structure first, then we can discuss purchases.

That dynamic has created a “holding pattern” across several sectors. Commodity traders are hesitant to aggressively price in large Chinese demand recovery without policy clarity. Manufacturers remain cautious about supply-chain investment decisions. Equity investors continue rotating between sectors that benefit from lower oil prices and sectors vulnerable to tariff escalation.

There is also a broader macro implication. The Iran war primarily impacts markets through inflation and energy channels. The China trade issue affects growth, supply chains, industrial production, and long-term capital spending. Together, they create a difficult environment for central banks because one variable threatens inflation while the other threatens economic momentum.

That tension is increasingly visible in market behavior. Investors appear willing to rally risk assets when Iran tensions ease, but those rallies often fade because the unresolved China tariff question continues hanging over global trade expectations.

In many ways, markets are now searching for the same thing in both situations: predictability.

On Iran, investors want confidence that oil flows normalize and the Strait of Hormuz remains open.

On China, investors want clarity regarding tariffs, enforcement mechanisms, and whether future Chinese purchases will occur under a stable framework rather than temporary political understandings.

Until both variables move toward resolution, markets are likely to remain highly headline-sensitive — especially commodities, industrials, transportation stocks, and agricultural futures.

—Grain markets mixed overnight as corn holds gains

Wheat and soybean markets eased in early trade while corn futures remained supported by tightening weather concerns across parts of the Corn Belt

Overnight grain trade was mixed early Tuesday, with corn futures holding modest gains while soybeans, soybean products, and wheat futures traded lower amid broad positioning ahead of key U.S. weather developments and ongoing uncertainty surrounding global demand trends.

— Grain futures trade lower overnight

Corn, soybean, and wheat futures weakened in early Tuesday trade as markets monitored improving crop conditions and mixed global demand signals

Overnight grain markets traded lower across most major contracts Tuesday, with corn, soybeans, soybean products, and wheat futures all under pressure as traders continued to assess evolving U.S. weather forecasts and global supply trends.

July corn futures fell 3 1/4 cents to $4.60 per bushel, pressured by expectations for improved planting and crop development conditions following recent favorable weather across much of the Corn Belt. Even with some emerging dryness concerns in northwestern areas, traders appeared reluctant to push prices higher amid generally favorable early-season crop prospects.

Soybean futures also weakened, with July beans declining 5 3/4 cents to $11.90 3/4 per bushel. July soybean meal dropped $2.70 to $329.20 per short ton, while July soybean oil slipped 0.18 cent to 73.80 cents per pound. The soybean complex remained pressured by ample South American supplies and uncertainty surrounding export demand.

Wheat futures were modestly lower as traders balanced improving moisture forecasts in portions of the U.S. Plains against ongoing Black Sea uncertainty. July Chicago SRW wheat futures fell 4 cents to $6.42 1/4 per bushel, while July Kansas City HRW wheat futures eased 1 cent to $6.81 per bushel. Traders continue monitoring crop conditions, export competition, and weather developments across key global growing regions.

—Global grain markets mixed as weather risks offset peace hopes

Dryness concerns in the U.S. Midwest and Western Europe supported wheat values even as easing Middle East tensions pressured broader grain and energy markets lower

International grain and oilseed markets were mixed to lower on Monday night into Tuesday morning as traders weighed improving prospects for a U.S.-Iran ceasefire against growing weather concerns in parts of the U.S. Corn Belt and Western Europe.CBOT grain futures were pressured by “war premium” liquidation tied to optimism over Middle East negotiations, while persistent dryness concerns in Central U.S. and Western European crop regions continued to underpin wheat markets.

Paris milling wheat futures were quoted around €100/metric ton, equivalent to roughly $213.50/metric ton. Using a conversion of 36.74 bushels per metric ton for wheat, that translates to an approximate U.S. Gulf-equivalent wheat price near $5.81 per bushel. The relatively soft European wheat market reflected improving Black Sea export competition and expectations for continued EU dryness that could eventually stress crops if rains fail to materialize.

Russian June FOB wheat values were reported steady near $245/metric ton, with new-crop offers near $244/metric ton. On a U.S. bushel-equivalent basis, that places Russian export wheat near $6.67 per bushel FOB. Russian wheat continues to anchor global export competition, although traders remain attentive to excessive moisture in portions of the Black Sea region and geopolitical risks after Russia reportedly warned the U.S. to remove citizens from Kyiv.

Meanwhile, August Malaysian palm oil futures rallied 23 ringgit to 4,496 ringgit per metric ton. Using current exchange relationships, that equates to roughly $1,055 per metric ton, or approximately 47.9 cents per pound in U.S. terms. Strength in palm oil futures reflected renewed optimism about biofuel demand and firmer energy market sentiment despite the recent pullback in crude oil prices.

Chicago grain futures were softer early Tuesday morning. July soybeans down 10 cents near $11.86 1/2 per bushel, July corn down 5 cents near $4.57 1/2, and July Chicago wheat down 10 cents near $5.36 1/2 during overnight trade.

—Ukraine wheat outlook stable despite export slowdown

Farmers’ union sees 2026 wheat crop near last year’s levels as inventories rise and forward sales accelerate

Ukraine’s wheat harvest in 2026 is expected to total between 22 million and 23 million metric tons, roughly in line with 2025 production of about 23 million tons, according to the trade department of the Ukrainian farmers’ union UAC, as reported by Reuters. Ukraine remains one of Europe’s key wheat producers and exporters despite ongoing wartime disruptions and logistical challenges.

The forecast broadly aligns with Ukraine’s economy ministry, which recently projected this year’s wheat crop at around 22.4 million tons. However, consultancy APK-Inform offered a more bearish outlook, estimating production closer to 20 million tons — about 15% below 2025 levels — reflecting concerns over weather conditions and production risks.

UAC also noted that Ukrainian wheat inventories are expected to total about 4.5 million tons by June 1, sharply above the 2.6 million tons held a year earlier, suggesting stronger carryover supplies heading into the new marketing year. Meanwhile, traders have already contracted roughly 3 million tons of wheat from the upcoming 2026 harvest, signaling continued international demand for Ukrainian grain.

Export pace, however, has slowed from last season. Ukraine’s economy ministry said wheat exports for the 2025/26 marketing season totaled 12.27 million tons as of May 25, compared with 14.80 million tons during the same period a year earlier.

—India reverses soymeal trade flows

Reuters reports India has canceled soymeal export deals and turned to African soybean imports after a sharp surge in domestic prices tightened supplies and disrupted traditional trade patterns

India has canceled roughly 25,000 metric tons of soymeal export contracts for the first time since 2021 while simultaneously booking at least 80,000 tons of soybean imports from African suppliers, according to Reuters. The abrupt reversal reflects a sharp rally in domestic soybean and soymeal prices tied to tighter local supplies and lower soybean production.

Domestic soymeal prices in India have surged 41% over the past month to a four-year high of 66,000 rupees per metric ton, pushing export offers for June shipments to around $695 per ton FOB, versus roughly $475 a month earlier. Traders reportedly agreed to cancel May and June export contracts after price increases of roughly $200 per ton made shipments uneconomic.

India’s move could redirect Asian soymeal demand toward North and South American suppliers, while also boosting demand for non-genetically modified soybeans from African countries including Benin, Niger, Togo, and Nigeria. Because India only permits imports of non-GM soybeans, African supplies are commanding significant premiums, with recent purchases reportedly priced between $700 and $760 per ton CIF for June and July delivery.

Industry officials told Reuters that India’s soybean imports could climb to a record 800,000 tons in the marketing year ending September 2026, compared with just about 2,000 tons imported the previous year. Tight supplies are expected to persist until India’s next soybean harvest arrives in September and October.

—Tuesday: Oil markets caught between Iran diplomacy and renewed strikes

Brent crude holds near five-week low as traders weigh ceasefire hopes against risk of escalation

August Brent crude oil futures traded around $96 per barrel Tuesday, as energy markets tried to balance optimism surrounding U.S./Iran negotiations with renewed military activity in southern Iran. Traders remain focused on whether diplomatic momentum can ultimately reduce threats to global oil flows through the Strait of Hormuz, even as military tensions continue to simmer. U.S. WTI crude oil futures (August) were down 3.6% at around $89.50. 

Reports indicated the U.S. military targeted missile launch sites and vessels suspected of preparing to deploy naval mines, with U.S. Central Command describing the operations as defensive actions aimed at protecting American forces and safeguarding maritime traffic in the region. The strikes underscored the fragile nature of the current ceasefire environment and reminded markets that the conflict still carries significant risks for global energy supplies.

Meanwhile, President Donald Trump said talks with Tehran were moving in a “positive” direction but cautioned that additional military action remains possible if negotiations fail. The comments reinforced the market’s current two-track outlook — one centered on potential de-escalation and reopening trade routes, and the other on the possibility of renewed conflict disrupting oil exports.

The U.S. and Iran are reportedly negotiating a framework that would extend the ceasefire by roughly two months. Under the discussions, Washington would ease aspects of its blockade while Iran would reopen the Strait of Hormuz, a critical chokepoint that handles a substantial share of global crude oil and liquefied natural gas shipments.

Despite the softer tone in crude prices over recent sessions, analysts note that volatility is likely to remain elevated because the final details of any agreement remain unresolved. Markets continue to price in the possibility that negotiations could still break down, potentially triggering another sharp spike in energy prices and renewed concerns about global inflation pressures.

—China steps up monetary easing

Beijing lowers key policy lending rate to a record low as officials try to stabilize growth and bolster confidence amid soft demand and trade uncertainty

China’s central bank moved to further loosen monetary policy by lowering the interest rate on a one-year policy loan to banks to a record low, underscoring growing concern in Beijing that the world’s second-largest economy is continuing to lose momentum. The move is designed to encourage banks to lend more aggressively, reduce financing costs for businesses and households, and support sectors still struggling with weak demand, lingering property market stress, and soft private-sector confidence.

The People’s Bank of China’s reduction in the medium-term lending facility (MLF) rate signals that Chinese policymakers are increasingly willing to use monetary easing to stabilize growth as manufacturing activity, consumer spending, and property investment remain uneven. Analysts say the cut also reflects concern that deflationary pressures have not fully disappeared and that export growth could face renewed pressure from ongoing global trade tensions and slower external demand.

Meanwhile, Beijing appears to be balancing two competing goals — supporting economic growth while avoiding a sharp buildup in financial risks. Chinese officials have so far relied on targeted stimulus measures rather than the kind of massive economy-wide stimulus used during previous downturns. However, the latest rate reduction suggests policymakers may be preparing for broader support if economic data continue to weaken in the second half of the year.

The easing step also comes as Chinese leaders attempt to stabilize domestic markets and reassure investors that growth targets remain achievable. Lower policy rates can help ease pressure on indebted local governments and property developers, although many economists argue that structural weaknesses in the housing sector and subdued consumer confidence will limit the effectiveness of monetary easing alone.

For global markets, the move could have broader implications across commodities, currencies, and trade flows. Easier Chinese monetary policy is often viewed as supportive for industrial commodities and agricultural imports if it eventually improves domestic demand. At the same time, additional easing could place downward pressure on the yuan, a development that may intensify trade sensitivities with the United States and other major trading partners.

— NWS outlook: Heavy rain and thunderstorms continue across much of the Southern U.S. through midweek, raising flash flooding and severe weather concerns… …Remaining unsettled across the West as a large Pacific low brings increasing rain and thunderstorm chances along with some high elevation snow… …Unseasonably hot weather continues across the northern Plains and Upper Midwest the next few days as temperatures soar 20-30 degrees above normal.

—Corn Belt turns drier as heat builds across Plains

Forecast calls for rapid fieldwork progress in the western Corn Belt, but mounting concerns over topsoil moisture and crop stress are beginning to emerge as rainfall prospects fade

Weather forecasts for the U.S. Corn Belt have shifted notably drier over the next 15 days, with much of the region expected to receive less than half of normal precipitation. The western and northwestern Corn Belt are forecast to see persistent above-normal to much-above-normal temperatures, a combination that should accelerate planting and other fieldwork but also heighten concerns about declining topsoil moisture and emerging crop stress if meaningful rainfall does not return soon.

The drier outlook is especially notable for portions of Iowa, Minnesota, Nebraska, and the Dakotas, where heat and limited rainfall are expected to rapidly dry surface soils. Analysts say the pattern favors strong short-term planting progress and crop emergence, but sustained warmth and dryness could quickly shift market attention toward moisture deficits heading into June.

Meanwhile, the Mid-South and Southeast are forecast to remain exceptionally wet through at least the next week, with widespread rainfall totals of 2 to 4 inches expected. The excessive moisture is likely to temporarily halt fieldwork and delay planting efforts in some areas, though it should provide meaningful drought relief and improve longer-term soil moisture profiles across key production regions.

In the Hard Red Winter wheat belt, repeated rain chances over the next 10 days are expected to support developing summer crops, pasture conditions, and late-stage wheat development. Most areas are forecast to receive more than an inch of rainfall, helping replenish moisture reserves after recent dryness concerns.

The northern Plains face a mixed outlook, with eastern areas expected to remain mostly dry while enduring extreme heat. Temperatures running 10 degrees or more above normal through the end of May are likely to accelerate crop development but could also intensify stress on topsoil moisture reserves, particularly in spring wheat and row-crop areas already lacking adequate rainfall.