AM Market Report – May 20, 2026

GOOD MORNING…HERE IS YOUR MORNING MARKET NEWS

OVERNIGHT GRAIN TRADE

ICE canola futures are narrowly mixed to start this morning…the nearby July contract down $1/tonne, but the Nov and further deferred contracts are up $1 to $2/tonne.

Chicago soybean futures are trending 5 to 7 cents/bu lower this morning, with soymeal slightly lower and soyoil narrowly mixed.

CBOT corn futures are losing 3 to 5 cents this morning.

US wheat markets are leaning lower…Minnie spring wheat futures mostly a penny weaker though Sept contract is up 2 cents), with the winter wheats losing 2 to 4 cents.

Tension in the Middle East has calmed temporarily, so traders will focus on the US crop growing weather going forward. Crude oil prices have retreated but remain elevated.

US grain markets have wobbled a bit on some concerns regarding China actually committing to buying $17 billion in US ag products.

The market is monitoring China for official confirmation that it has eased its 10-15% duties on US grain and soybean imports. Strong cash rumors were noted late last week about the reduction, but China has yet to post an official confirmation on its trade websites. Such confirmation is needed for private buyers to return to the US market and make new purchases.

For now, US ag markets will take the White House at its word that China has agreed to secure $28-30 billion of US ag goods annually through 2028. But the market will want to see China drop its import duties on US grain and then start making actual cash grain purchases. The tariff reduction will be the only confirmation that China supports importing larger tonnages of grain and cut a trade deal with US President Trump.

The Strait of Hormuz is still closed, and if the US war against Iran does not end in the next several weeks, world energy markets will push to new highs as they form a triangular pattern on the charts.

Latest on US-Iran war

– Trump threatens Iran with big hit if there s no peace deal soon
– Iran threatens to extend conflict beyond the region if US and Israel resume attacks

President Trump threatened to resume strikes on Iran in the coming days as part of a perverse push for a deal to end the war, according to Bloomberg. I hope we don t have to do the war, but we may have to give them another big hit, Trump told reporters on Tuesday. Meantime, the Republican-led US Senate signaled opposition to continuing the war with a procedural vote on Tuesday evening that reflected deepening unease over a foreign conflict.

Iran s paramilitary Revolutionary Guard on Wednesday put out a strongly worded statement threatening to extend the Middle East conflict beyond the region if the US and Israel resume attacks against Tehran, CNBC reported. In the event the aggression against Iran is repeated, the regional war that was promised will this time be extended beyond the region, and our crushing blows will bring you to ruin in places you cannot imagine, Iran s Revolutionary Guard said, according to a statement reported by the country s semi-official Mehr news agency.

In Other News

– Hormuz closure could trigger agrifood shock… The closure of the Strait of Hormuz is the beginning of a “systemic agrifood shock” that could trigger a severe global ?food price crisis within six to 12 months, the United ?Nations Food and Agriculture Organization said on Wednesday. The disruption is not a temporary shipping problem, the agency said, warning “the window for preventive action is closing quickly”. Governments, ?international financial organisations and the private sector need to take ?decisions on alternative trade routes, restraint on export restrictions, protection ?of humanitarian flows and buffers to absorb higher transport costs, ?it added.

The time has come to “start seriously thinking about how to increase ?the absorption capacity of countries, how to increase their resilience to this choke, so that we start to minimize the potential impacts,” FAO Chief Economist Maximo Torero ?said.

The FAO Food Price ?Index…which tracks monthly changes in international prices of a basket of globally ?traded ?food commodities…rose for a third consecutive month in April, driven by high energy costs and disruptions linked to the Middle East conflict.

FAO also warned the crisis could ?deepen with the onset of El Ni o weather phenomenon, expected to bring droughts and disrupt ?rainfall patterns across several regions.

– China commerce ministry does not mention $17 billion in US ag product purchases… In a statement today, China s Ministry of Commerce confirmed there had been a guiding target set between the two countries with the goal of expanding two-way agricultural trade, but made no mention of the US government s claimed $17 billion number for US ag product purchases from China, Bloomberg reported overnight. With no official confirmation of the figure yet from the Chinese government, lingering concerns about the trade dispute between Washington and Beijing are putting some downward pressure on grain prices, said Tobin Gorey, a strategist at Cornucopia Agri Analytics. You can make promises about we ll buy this, we ll buy that, and it s helpful. But people want to see it, he said in the Bloomberg report.

– Alberta Canola seeks federal compensation over China trade disruption...Alberta Canola is calling on the federal government to compensate farmers for financial losses tied to trade actions that contributed to the temporary closure of the Chinese market for Canadian canola. In a letter addressed to Agriculture Minister Heath MacDonald and Finance Minister Fran ois-Philippe Champagne, the organization said canola growers suffered significant financial hardship during China s anti-dumping investigation into Canadian canola imports, which disrupted trade from mid-2025 into early 2026. The letter, signed on behalf of more than 12,000 Alberta canola producers, acknowledged Ottawa s recent diplomatic efforts to rebuild relations with China and restore market access for Canadian agricultural products. However, Alberta Canola argued that producers were left carrying the financial burden of the dispute, particularly as uncertainty surrounding US tariffs added further volatility to grain markets.

According to the organization, many farmers were forced to sell canola at discounted prices because of limited export alternatives, mounting debt obligations, storage constraints, and contractual commitments. Alberta Canola said growers raised concerns during fall producer meetings about the impact of federal trade actions, including Canadian tariffs on Chinese electric vehicles, steel and aluminum, which they believe contributed to the deterioration in trade relations with China.

The organization is now urging Ottawa to introduce a targeted compensation program to offset those losses and stabilize farm finances.

– Australia wheat acres crimped… Australia, the third-largest wheat exporting nation, may have as much as 10 MMT less to ship in the upcoming season, an amount equivalent to 5% of annual global exports, Reuters reported, noting the toll that dry weather alongside the surge in fertilizer and fuel costs is having on planting activity. Australia is the first major grain exporter to plant wheat since the beginning of the Iran war, which has seen the closure of the Strait of Hormuz choke off crude, fuel and fertilizer imports. The report noted other countries are also likely to grow less, shrinking food supply further.

Six agricultural analysts contacted by Reuters said the amount of Australian land planted with wheat would fall by between 7% and 20% from last year, potentially removing the grain from an area nearly the size of Belgium. That means the harvest, due toward year-end, could be between 16% and 41% smaller, the analysts estimated, shrinking from last year’s roughly 36 MMT to as low as 21.3 MMT, if the most pessimistic estimate proves correct and dry conditions extend their grip.

– Ukraine expects small rise in 2026 rapeseed harvest after tough winter...Ukraine’s rapeseed harvest is likely to increase only slightly this year from 2025 due to difficult winter weather conditions, said the trading department of UAC, the country’s largest farmers’ union. Ukraine is a major European rapeseed producer, exporting two-thirds of its crop mainly to European countries. Ukraine’s rapeseed harvest fell to 3.3 MMT in 2025 from 3.7 MMT in 2024.

“Not that much rapeseed was planted – around 1.1 million hectares. Some crops were damaged and some areas were replanted,” UAC said in a weekly report. “We are heading for a not very good harvest…roughly at last year’s level, maybe 100,000 to 200,000 tonnes more.”

Consultancy APK-Inform this weekend estimated Ukraine’s 2026 rapeseed harvest at 3.83 MMT, of which 2.43 MMT could be exported.

– Indonesia to bring commodity exports under centralized control…Indonesian President Prabowo Subianto said that his government will centralize exports of key commodities as part of efforts to boost state revenues and tighten the country’s grip over its abundant natural resources. Prabowo said in a fiery speech to parliament that Indonesia had lost as much as $908 billion in revenues in the last 34 years because its commodities were being sold on the cheap, adding that key exports like palm oil and coal would in future be sold via a central government-run enterprise. Indonesia, a global commodities powerhouse, is the world’s largest exporter of thermal coal and palm oil.

Prabowo’s remarks confirm earlier accounts from two sources familiar with the matter, who said Indonesia was planning the move as part of a drive to strengthen government oversight over its natural resources. Rumours about the plan have spooked the market on concerns that it could lead to changes in pricing mechanisms and squeeze trader margins, with Jakarta’s main stock index shedding 3.5% on Tuesday.

– Speculative sector watch... Global fund managers have piled into commodities on fears the Iran war will spark a significant inflation surge, a closely followed monthly survey showed Tuesday. The BofA Global Fund Managers Survey for May shows managers the fourth-most overweight commodities in the history of the series going back to 1999.

Commodities are certainly enjoying a strong 2026. Gold, silver and precious metals charged into the new year with a series of eye-popping new highs before running out of steam, but crude oil and fuel futures have surged since the start of the Iran war and the closure of the Strait of Hormuz. Agricultural commodities have joined the rally, and have been increasingly correlated with energy as those surging crude and product prices fuel demand for biofuels.

And then there are inflation fears, which appear to have stoked interest in commodities as a broad asset class. Asked what the biggest tail risk is, 40% of investors said “2nd wave inflation,” up sharply from 26% last month.

The survey found 69% of investors say they expect “stagflation” (below-trend growth and above-trend inflation), though that s down from 76% in April. One in four expect a boom (above-trend growth and above-trend inflation), up from 15%. Two percent say “goldilocks” (above-trend growth and below-trend inflation), vs 4% a month ago, while 0% say stagnation (below-trend growth and below-trend inflation), from 1%.

– Global long-term government bond yields rise to two-decade highs… The sell off in longer-maturity government bonds has pushed up yields to levels last seen during the global financial crisis, and market participants are warning yields could rise even farther. A surge in global inflation expectations has brought the average yield on sovereign debt due in a decade or more to the highest since July 2008, a Bloomberg gauge shows. Global long-dated bonds have been under pressure on concern the jump in energy costs will feed into everything from plastic bottles for soda to gasoline for tractors needed to harvest crops. Add in worries over government spending in Japan, the UK and the US, as well as an artificial intelligence boom supporting growth in the world s biggest economy, and investors have been seeking greater compensation to own longer-maturity debt, said the report.

– EU finalizes text of trade deal with US… The European Union finalized the text of its US trade deal after months of negotiations, clearing a major hurdle to ratifying the pact before President Trump’s threatened deadline. The deal would see the EU erase levies on US industrial goods in exchange for a 15% tariff ceiling on the bloc’s exports, and the European Parliament and EU countries will now vote to ratify the finished text. The agreement includes fresh language to address EU concerns over US metals tariffs and allows the commission to suspend the trade deal if tariffs on products using steel and aluminum surpass 15% after 2026.

Outside Markets

The Dow Jones Industrial Average fell 322.24 points lower on Tuesday to settle at 49,363.88, while the S&P 500 was down 49.44 points to 7,353.61. Canada s S&P/TSX composite stock index declined by 92 points yesterday to 33,741.

Early Wednesday, the June Dow Jones Futures are up 153 points. European stock markets are slightly higher this morning, but Asian markets are lower.

Global stocks were muted as bond yields steadied just below multiyear highs amid war-driven inflation fears, though yields remain high enough to cloud the outlook for Nvidia s results due later in the day.

At this point of time, it remains my base case that we are seeing a corrective pullback after an absolutely phenomenal rally, said IG analyst Tony Sycamore. The US yields obviously are creating some rumbles in the market and now attracting a lot of attention.

The June US Dollar Index is up 0.069 at 99.335. The Canadian dollar weakened against its US counterpart…currently quoted at 72.73 US cents.

July crude oil futures are down $2.60 at US $101.55/barrel. Oil prices are weaker after US President Donald Trump again asserted the war with Iran will end very quickly, though investors remain wary about the outcome of peace talks amid continued disruptions to Middle Eastern supply. Prices are likely to still exhibit some upside potential even if a deal is concluded, given that supply will likely not return to pre-war levels immediately, said LSEG research analyst Emril Jamil.

Grain Markets

Chicago soybean futures are slipping 5 to 7 cents/bu lower this morning. Bean futures finished Tuesday down 1 to 3 cents in the front months, but up 1 to 2 cents across the rest of the board.

Soymeal futures are losing $2 to $3/ton this morning after finishing Tuesday down 10 cents to $2/ton in most contracts. Soyoil futures are narrowly mixed but starting to tick a couple of points lower this morning and after closing yesterday 18 to 27 points lower. Crude oil is weak due to questions about what s next in Iran and the Middle East.

Following the announcement of the US-China trade agreement on agricultural purchases, the watch is on for US soybean sales. On the global export stage, Brazil holds a discount to the US of nearly 80 cents/bu on a FOB basis, but that price gap dwindles to only 15-20 cents by September offers.

Brazil s soybean export estimate from ANEC is 16.1 MMT for May, a 0.1 MMT increase from the previous estimate. A private Brazil Consultancy Veeries, expects the country s soybean area next year to grow by the smallest total (400,000 hectares or 988,420 acres) in 20 years due to tight margins and higher fertilizer costs.

US soy planting and emergence are ahead of average, with more rain in the forecast for some areas.

Chicago corn futures are trading 3 to 5 cents lower this morning. The corn market on Tuesday corrected down from Monday s sharp gains, with contracts steady to almost 2 cents lower at yesterday s close.

While bullish traders on Monday built optimism that corn would be included in China’s $17 billion trade pledge with the US, a wetter forecast for the end of May pressured prices.

US corn planting and emergence are faster than normal, and while near-term delays are probable, conditions in other areas are favorable. There are still some questions about just how many US acres will be planted to corn in 2026, which will be partially answered at the end of June.

Traders are also monitoring harvest in Argentina and second crop development weather in Brazil.

US wheat markets are creeping lower… Minnie spring wheat futures are mixed (a penny or less lower, except the Sept contract which is up 2 cents), while the winter wheats are down 2 to 4 cents. The US wheat market was mixed at Tuesday s close, with Chicago contracts up, KC steady and spring wheat 4 to 6 cents lower.

Rains are expected across much of the southern US Plains (HRW territory) in the next week, though it is too late for much of the crop. It will likely also delay any early harvest progress.

Monday s USDA Crop Progress Report still looms over the wheat market. In that report, the USDA’s 43% poor/very poor rating for US winter wheat was the highest mid-May reading since 2014, when the national US winter wheat yield fell 10% below trend. The 27% of the crop rated good to excellent is said to be the lowest for the week since 1989.

Still, any upside to US wheat markets, even weather-related upside, is limited by concerns about US wheat prices become quite expensive relative to other global exporters.

CANADIAN GRAIN MARKET

ICE canola futures posted sharp gains on Tuesday, as the market caught up to the strong advances posted in the Chicago soy complex the previous day.

US soy prices surged on Monday after the White House released a fact sheet over the weekend that said China had agreed to purchase $17 billion in American ag products annually through 2028 following last week s summit between US President Donald Trump and Chinese leader Xi Jinping. Canola did not trade on Monday due to the Victoria Day holiday.

The Chicago market was just mixed on Tuesday, but ICE canola moved higher with the previous day s strength regardless. European rapeseed and palm oil both closed lower Tuesday after moving higher Monday.

July canola jumped up $19.60 yesterday to $757.70/tonne, and November was $14.60 higher at $763.60.

For today… canola futures are mixed this morning. Front month July futures are down $1.20 currently at $756.50/tonne though still within shot of contract highs, while the remaining contracts are up $1 to $2/tonne.

Weaker energy markets this morning is acting as a drag on world vegoil and oilseed markets. CBOT soy complex are softening this morning, though EU rapeseed futures are holding very modest gains, reaching levels overnight that have not been seen since February 2025 on the diesel shortage concerns in Europe.

Malaysian palm oil is barely lower this morning, but has trended higher in recent sessions from reports that Indonesia, the top supplier, plans tighter oversight of commodity exports, including palm oil and coal, to boost state revenue. Indonesia s plan to centralize palm oil exports raises fears of further supply disruption, which added to price momentum after rising input costs prompted Malaysian growers to scale back replanting, delaying a process vital for long-term output.

On the feed grains… Western Canadian delivered feed grain values moved higher over the past week, largely due to rising prices south of the border. Jim Beusekom, president of Market Place Commodities Ltd., reported the cash price of feed barley at $320/tonne landed Lethbridge, with offers of $325 to $330/tonne. Meanwhile, feed wheat s cash price was at $315/tonne with the same bids as feed barley. The value of imported US corn landed Lethbridge was at $300/tonne with bids of $305 to $310.

Trending higher US corn and wheat futures markets this spring season have supported Prairie feed grain values. But also lifting prices is the greater shift to move feed barley out through export channels this year… a lot of the available barley in Western Canada was exported. It s just simply not here anymore, Beusekom said. The people that feedlot alley would normally be buying barley from, they re as good as cleaned out by the elevators that are shipping the exports. Ending stocks for barley are not critical (low), but they are similar to what we ve seen a year ago and competition is very brisk trying to secure what s left in Western Canada.

Beusekom said prices usually decline after the May long weekend except in the case of weather events. In those cases, grain prices would peak in July. This year remains to be seen yet, he said. I think there s plenty of weather issues, but this is far from a perfect year. In Western Canada, there s the problem of too dry in southern Alberta again and you move into Saskatchewan outside of the Palliser Triangle, they re still trying to plant their crop, but it s too wet.

Johnston s Grain is reporting new crop feed barley pricing/delivery opportunities for southern Alberta listed below. Note they are offering up to 30 bu/acre Act of God Coverage, with delivery opportunities available in September October. However, delivery slots are reportedly filling up rapidly and many delivery windows are now shifting to October November. The indications below are FOB Farm pricing.

Lethbridge $5.50
Med Hat $5.50
Brooks $5.50
Fort Macleod $5.50
Vulcan $5.40
High River $5.30
Strathmore $5.25
Drumheller $5.15
Airdrie $5.15
Crossfield $5.15
Acadia Valley $5.15

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