Key Takeaways
- • Cattle inventory builds modestly while marketings decline: Feedyard on-feed cattle estimated at 101.6% of year-ago levels (range: 100.2–102.4%), with April placements up 104.6% but April marketings down 9.3% year-over-year, signaling inventory accumulation and delayed slaughter pace.
- • U.S. grain exports surge on wheat strength and geopolitical support: Week-ending May 14 total grain inspections reached 2.23 million metric tons; corn exports hit 1.38 million tons, while wheat exports jumped 483,881 tons. Year-to-date corn exports now total 58.58 million tons versus 45.58 million tons last year—a 28.5% increase attributed partly to reported $17 billion Chinese agricultural purchasing commitment.
- • Wheat rallies on 35-year-low crop condition ratings and diplomatic developments: Winter wheat conditions hit their worst level in over three decades due to dryness across the U.S. Great Plains, driving price appreciation despite softness in U.S.–China trade negotiations and geopolitical tensions including Iran sanctions and Strait of Hormuz closure.
- • Palm oil exports collapse 20.5% month-over-month; Malaysian crude palm declines: May 1–20 palm oil exports fell to 690,220 tons from 868,281 tons in April, with crude palm oil down sharply to 133,603 tons. Crude palm oil cash prices declined $30/ton in June delivery, signaling weakening demand and inventory pressure.
- • Soft commodities mixed on demand uncertainty and geopolitical risk: Cotton fell on doubts about the China deal announcement; cocoa posted mixed trends despite West African harvest strength, with demand dampened by 2024 price surge and chocolate reformulation; coffee and sugar gained on supply expectations and energy cost implications from ongoing Iran conflict.
Summary
U.S. cattle feedyards show modest inventory expansion with mixed slaughter signals as of May 1. The consensus analyst estimate for cattle on feed stands at 101.6% of year-ago levels, with a range of 100.2–102.4%, indicating supply growth relative to the prior year. April placements averaged 104.6% year-over-year across eight major commodity analysts, suggesting strong feedlot intake momentum. However, April marketings declined to 90.7% of last year's volume—a 9.3% contraction—indicating that despite strong placement activity, slaughter pace has slowed. This dynamic suggests producers are holding cattle longer in feedyards, likely waiting for improved pricing signals. The USDA Cattle-on-Feed Report is scheduled for release Friday, May 24 at 3 p.m. ET.
U.S. grain export momentum accelerated sharply through mid-May, reflecting both logistical strength and geopolitical trade developments. For the week ending May 14, total grain inspections for export reached 2.23 million metric tons, down from 2.96 million the prior week but ahead of the 2.47 million tons reported in the equivalent 2025 period. Corn exports dominated at 1.38 million tons for the week; year-to-date corn shipments now total 58.58 million tons versus 45.58 million in the prior marketing year—a 28.5% year-over-year increase. Wheat exports surged to 223,972 tons for the week, bringing the marketing-year total to 23.10 million tons compared to 20.75 million last year. Sorghum exports nearly doubled year-to-date to 3.87 million tons from 1.74 million. The White House announced over the weekend that China had agreed to purchase up to $17 billion in U.S. agricultural goods in addition to soybeans; however, China has not publicly commented on these reports, leaving traders uncertain about execution.
Wheat futures rallied amid crop stress and diminished global supply outlook. Winter wheat crop condition ratings fell to their lowest level in over 35 years, driven by persistent dryness across the U.S. Great Plains. The tight moisture situation contrasts with wet conditions in the Midwest and Western Europe, which raises quality concerns for some regions. Despite selling pressure linked to U.S.–China summit negotiations and geopolitical headlines—including President Trump's announced pause on Operation Freedom to pursue Iran ceasefire talks and subsequent rejection of Iranian proposals—follow-through buying on reduced condition ratings supported price strength. Trends on Chicago Board of Trade wheat futures remain mixed to up, with July support at 631, 628, and 606, and resistance at 684, 696, and 708.
Softer commodities posted divergent price action on demand uncertainties and energy market spillovers. Cotton fell as traders expressed skepticism about the reported China agricultural purchase agreement; USDA planting progress data showed ahead-of-schedule activity despite dry conditions in Texas and forecasted scattered showers elsewhere. Cocoa posted gains with daily and weekly trends moving upward, supported by West African main crop arrival and positive rains for the next crop; however, demand has fallen sharply after prices nearly tripled in 2024, prompting chocolate manufacturers to reformulate and reduce bar sizes, raising the risk of a global surplus in 2026/27. Coffee rallied in New York and London on favorable production prospects for next crops in South America and Asia, with good weather reported in Mexico and Central America, though Vietnam has experienced drier conditions. Sugar strengthened on both exchanges, with upside trends on daily charts, as petroleum price increases tied to the ongoing Iran conflict and Strait of Hormuz closure raise the prospect of higher feedstock costs for ethanol production diverting demand.
Malaysian palm oil exports contracted significantly, reflecting demand weakness. Exports for May 1–20 fell 20.51% month-over-month to 690,220 metric tons from 868,281 in April, according to cargo surveyor AmSpec Agri Malaysia. Crude palm oil shipments declined especially sharply to 133,603 tons from 185,075, while refined, bleached, and deodorized palm olein fell to 144,325 tons from 137,140. Cash market pricing in Malaysian ports reflected this pressure, with crude palm oil delivered basis South Malaysia declining MYR 30 ($7.55) to 4,550 ringgit per ton for June delivery. Refined, bleached, and deodorized palm olein and stearin offered prices remained steady to slightly down, with July/August/September olein offered down MYR 2.50 to 1,190 per ton.
U.S. grain export momentum accelerated sharply through mid-May, reflecting both logistical strength and geopolitical trade developments. For the week ending May 14, total grain inspections for export reached 2.23 million metric tons, down from 2.96 million the prior week but ahead of the 2.47 million tons reported in the equivalent 2025 period. Corn exports dominated at 1.38 million tons for the week; year-to-date corn shipments now total 58.58 million tons versus 45.58 million in the prior marketing year—a 28.5% year-over-year increase. Wheat exports surged to 223,972 tons for the week, bringing the marketing-year total to 23.10 million tons compared to 20.75 million last year. Sorghum exports nearly doubled year-to-date to 3.87 million tons from 1.74 million. The White House announced over the weekend that China had agreed to purchase up to $17 billion in U.S. agricultural goods in addition to soybeans; however, China has not publicly commented on these reports, leaving traders uncertain about execution.
Wheat futures rallied amid crop stress and diminished global supply outlook. Winter wheat crop condition ratings fell to their lowest level in over 35 years, driven by persistent dryness across the U.S. Great Plains. The tight moisture situation contrasts with wet conditions in the Midwest and Western Europe, which raises quality concerns for some regions. Despite selling pressure linked to U.S.–China summit negotiations and geopolitical headlines—including President Trump's announced pause on Operation Freedom to pursue Iran ceasefire talks and subsequent rejection of Iranian proposals—follow-through buying on reduced condition ratings supported price strength. Trends on Chicago Board of Trade wheat futures remain mixed to up, with July support at 631, 628, and 606, and resistance at 684, 696, and 708.
Softer commodities posted divergent price action on demand uncertainties and energy market spillovers. Cotton fell as traders expressed skepticism about the reported China agricultural purchase agreement; USDA planting progress data showed ahead-of-schedule activity despite dry conditions in Texas and forecasted scattered showers elsewhere. Cocoa posted gains with daily and weekly trends moving upward, supported by West African main crop arrival and positive rains for the next crop; however, demand has fallen sharply after prices nearly tripled in 2024, prompting chocolate manufacturers to reformulate and reduce bar sizes, raising the risk of a global surplus in 2026/27. Coffee rallied in New York and London on favorable production prospects for next crops in South America and Asia, with good weather reported in Mexico and Central America, though Vietnam has experienced drier conditions. Sugar strengthened on both exchanges, with upside trends on daily charts, as petroleum price increases tied to the ongoing Iran conflict and Strait of Hormuz closure raise the prospect of higher feedstock costs for ethanol production diverting demand.
Malaysian palm oil exports contracted significantly, reflecting demand weakness. Exports for May 1–20 fell 20.51% month-over-month to 690,220 metric tons from 868,281 in April, according to cargo surveyor AmSpec Agri Malaysia. Crude palm oil shipments declined especially sharply to 133,603 tons from 185,075, while refined, bleached, and deodorized palm olein fell to 144,325 tons from 137,140. Cash market pricing in Malaysian ports reflected this pressure, with crude palm oil delivered basis South Malaysia declining MYR 30 ($7.55) to 4,550 ringgit per ton for June delivery. Refined, bleached, and deodorized palm olein and stearin offered prices remained steady to slightly down, with July/August/September olein offered down MYR 2.50 to 1,190 per ton.
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