Corn Futures Decline Along With Crude Oil -- Daily Grain Highlights

By Kirk Maltais

--Corn for July delivery fell 2.5% to $4.68 a bushel on the Chicago Board of Trade Wednesday, in response to a sharp slide in crude oil prices on headlines surrounding the U.S./Iran negotiations.

--Wheat for July delivery fell 1.6% to $6.17 3/4 a bushel.

--Soybeans for July delivery fell 1.4% to $11.94 1/4 a bushel.

HIGHLIGHTS

Moving in Tandem: Crude oil futures dove Wednesday, pressuring CBOT grain futures due to the correlation between oil prices and renewable fuels - for which corn and soybeans are both key feedstocks. Grain traders are bracing for a deeper pullback due to the large net positions built by fund traders in recent weeks. In a note, Doug Bergman of RCM Alternatives pegs corn's support level at $4.60 a bushel, with soybeans potentially sinking back below the $12 a bushel mark and wheat seeing support at $6 a bushel.

Reducing Risk: War-related risk premium essentially melted off of CBOT grain futures throughout the day. This morning, President Trump posted on Truth Social that the U.S. would end its military campaign against Iran if Tehran agrees to terms under discussion. However, Trump also threatened resuming bombing if terms are not agreed to, which made some traders more cautious about removing that risk premium- or additional cushion to prices to account for unforeseen developments that affect the supply/demand picture.

INSIGHT

Some Doubts Emerge: Agricultural and soft commodities mostly fell Wednesday, taking cues from lower crude oil. While this reflected optimism that Iran and the U.S. will reach a deal to end the war, some traders are not convinced that such an end is imminent. "I am skeptical a lasting U.S./Iran deal gets done," said Robert Yawger of Mizuho Securities USA in a note. Yawger speculates that the IRGC will not agree to turn over their nuclear materials, and an agreement to reopen the Strait of Hormuz could quickly dissolve back into a stalemate. However, should such a deal be made, then world industries will likely quickly recover, said Yawger.

Status Quo: Analysts surveyed by WSJ said that they largely expect U.S. soybean exports to post another weak showing in Thursday morning's weekly export sales report. They forecast a range between 200,000 metric tons and 600,000 tons--with the majority of analysts keeping the high-end of their forecast around 400,000 tons. On the other hand, corn is expected to have another strong showing, with analysts predicting sales to land anywhere from 800,000 tons to 1.85 million tons.

Accumulating Stacks: Inventories of ethanol in the U.S. grew over the past week, according to EIA data. In its weekly report Wednesday, the EIA said that ethanol inventories for the week ended May 1 rose 219,000 barrels to 26.02 million barrels. That exceeded the forecasts from analysts surveyed by Dow Jones this week, who forecast stocks between 25 million barrels and 26 million barrels. Average daily production also rose, to 1.017 million barrels a day, up 8,000 barrels a day from last week. Surveyed analysts had forecast sales to land anywhere from 1 million barrels a day to 1.1 million barrels a day.

AHEAD

--Zoetis Inc. will release its first-quarter 2026 earnings report at 7 a.m. ET Thursday.

--The USDA will release its weekly export sales report at 8:30 a.m. ET Thursday.

--The CFTC will release its weekly Commitment of Traders report at 3:30 p.m. ET Friday.

Write to Kirk Maltais at [e-mail]

(END) Dow Jones Newswires

05-06-26 1510ET