AM Market Report – May 7, 2026

GOOD MORNING…HERE IS YOUR MORNING MARKET NEWS

OVERNIGHT GRAIN TRADE

Grain markets are seeing some follow-through selling this morning from overnight price action. The grain futures markets bulls have been spooked by the big downdraft in crude oil prices.

ICE canola futures are down $4 to $5/tonne this morning…currently on a 3 session slide and down 4 of the past 5 sessions since tapping contract highs last week.

Chicago soybean futures are down 7 to 9 cents/bu this morning…dropping back into its 7-week sideways trading range following a brief pop higher…continuing this morning to erode with soyoil.

CBOT corn futures are 5 cents weaker as the emergent double top on the price chart becomes more a more prominent technical feature.

US wheat markets are also falling again…and moving further away from their recent highs…with Minnie spring wheat futures down another 6 to 8 cents right now, HRW tumbling 13 to 14 cents and SRW wheat losing 6 to 7 cents. Funny to see wheat falling as US HRW wheat crops deteriorate in drought and now face sub-freezing temperatures threatening the key Kansas crop.

Latest on US-Iran war

– US, Iran deliberate peace deal with nuclear breakthrough still distant
– Israeli army carries out first strike on Beirut since ceasefire
– French container ship makes rare crossing of Strait of Hormuz

The US is waiting on Iran to respond to its proposal to reopen the Strait of Hormuz and end the war. Iran is expected to give an answer in the coming days, though its leaders have previously shown little sign of yielding on their nuclear program and accepting a moratorium on enriching uranium. The US proposal calls for a moratorium on Iran’s uranium enrichment program and the removal of sanctions on Iran, with all conditions reversible if a wider nuclear deal can’t be reached.

But anything coming out of the White House requires taking Trump at his word. Fact is…the Iranians have discovered they do have a power they were not entirely sure they had before this war started…that is they can literally squeeze the world economy through the use of cheap drones terrorizing shipping through the Persian Gulf. And markets bounce around daily on the next Lucy and the football Trump claim the Iranians are begging for a deal, when that is clearly not the case. This quagmire could go on for some time yet…regardless of what the White House clown says.

In Other News

– Large Canadian crop stocks ahead of new growing season… Old crop stocks of most Canadian grains, pulses and oilseeds were well above year-ago levels ahead of the 2026-27 growing season, with only soybeans seeing tighter supplies on the year as of March 31, 2026, in Statistics Canada s stocks of principal field crops report released May 6.

Wheat

Total wheat stocks at 19.5 MMT as of March 31 were up 12% from the same time a year ago and the largest level in 12 years. On-farm stocks increased by 14.1% at 15.2 MMT. Of that total, durum stocks were up by 19.1% on the year at 3.4 MMT.

Canola

Canola stocks came in at just under 10 MMT, rising 27.4% from March 31, 2025. On farm stocks were up by 30.1% at 8.5 MMT and commercial stocks were up 13.8% at 1.5 MMT. Record production and a 25% decline in exports contributed to the large supplies.

Barley

Total stocks of barley were flat year over year at 3.0 MMT. Commercial stocks rose 19.9% to 585,000 tonnes, while on-farm stocks fell 3.9% to 2.4 MMT.

Oats

Total oats stocks increased 21.0% from March 31, 2025, to 1.9 MMT. On-farm stocks rose 15.4% to 1.5 MMT, while commercial stocks increased 47.7% to 409,000 tonnes.

Peas/Lentils

Pea stocks were up by 84.7% on the year at 2.5 MMT, while lentils increased by 126.7% at 2.4 MMT. Both marked new records for the pulse crops for the end of March, coming in well above their five-year averages of 1.4 MMT for peas and 1.1 MMT for lentils.

Corn

Total stocks of corn were up 3.5% over year to 7.5 MMT as of March 31. On-farm stocks edged up 0.8% to 4.9 MMT, while commercial stocks rose 9.2% to 2.6 MMT.

Soybeans

Total soybean stocks fell 45.7% to 1.5 MMT as of March 31 due to a combination of lower supplies and strong exports.

– Canadian beef cattle groups demand protection in any Mercosur deal...Canada’s beef cattle industry groups are demanding guaranteed access to the domestic beef market ?must be left out of any deal Canada ?makes to join the Mercosur trade bloc. The Canadian Cattle Association and the National Cattle Feeders Association issued the statement as Canada moves towards ?a provisional deal with the South American trade ?bloc. Brazil and Argentina are major beef exporters.

“Canada is already one of the most exposed beef markets in the world,” said CCA President Tyler Fulton, adding that 30% of domestic beef consumption ?is imported. The organizations also said they have concerns about ?Mercosur standards on animal health and other food issues.

Like American ranchers, Canadians ?have ?struggled with years of drought in cattle-producing regions, causing the herd to shrink and beef prices to soar, hurting consumers. Canada imports much US beef and exports many cattle and large amounts of beef to the ?US, with few border issues affecting trade under the Canada-US-Mexico trade deal. The cattle groups’ statement ?highlighted the integrated nature of the North ?American cattle ?herd under CUSMA and urged against creating “unnecessary friction” that could threaten access to the US market.

Canada has been pursuing trade deals around the world to reduce reliance ?on the US and China, both of which have had trade conflicts with Canada in recent years.

– Fertilizer companies racking up profits… Fertilizer makers CF Industries Holdings Inc. and Nutrien Ltd. each reported nearly 20% jumps in sales for the latest quarter, showing the extent of the US- Iran war s upheaval on supply chains for the key crop nutrients. The windfall comes as the North American (fertilizer) producers have benefited from higher prices for nitrogen fertilizers, which are applied across North American fields to support crop yields. Illinois-based CF Industries reported earnings per share that more than doubled from a year ago. Canada-based Nutrien s adjusted per-share earnings more than quadrupled, though they fell short of analyst estimates, Bloomberg reported. Prices for the inputs were already elevated prior to the start of the war due to a tight supply balance, prompting concerns from farmers and antitrust scrutiny from the Trump administration.

– EU does not finalize trade deal with US, despite Trump warning… The European Union failed to finalize a long-delayed US trade deal during overnight talks, despite warnings from President Trump that he would soon impose fresh tariffs. Negotiators from the European Parliament and EU countries met Wednesday night to discuss potential amendments to the transatlantic deal, which was initially struck in July. But they didn t make any conclusive decisions, according to Cyprus, which holds the EU s rotating presidency, Bloomberg reported.

Talks will continue in the coming weeks. EU officials are committed to moving swiftly, Cypriot Energy Minister Michael Damianos said in a statement. The EU is under mounting pressure from the US to ratify the trade pact. Trump last week threatened to increase duties on EU cars and trucks to 25% from 15%, accusing the EU of not moving fast enough to adopt the agreement.

– Baltic Dry Index rises to highest level in 2.5 years… A key measure of bulk-shipping rates jumped to the highest level since December of 2023, driven by rising demand for Capesize vessels along with tightening supply of ships that haul bulk commodities. The Baltic Dry Index surged 5.6% to 2,991 points Wednesday, extending gains for a fourth session.

The gauge tracks freight rates for Capesize, Panamax, and Supramax ships transporting raw materials such as iron ore, coal and grain. The Capesize market has strengthened sharply over the past two weeks on tightening ship availability in the Pacific, disruptions to iron ore exports from Brazil, and hedging of future freight rates, said Pranay Shukla, the head of dry bulk freight and commodities research at S&P Global Energy and as reported by Bloomberg.

Outside Markets

The Dow Jones Industrial Average rallied 612.34 points higher on Wednesday to settle at 49,910.59, while the S&P 500 jumped 105.90 points to 7,365.12. Canada s S&P/TSX composite stock index surged 415 points higher to close yesterday at 33,982.

Early Thursday, the June Dow Jones Futures are up another 101 points. TSX futures are also pointed higher. European stock markets are slightly lower this morning, while Asian markets are slightly higher.

Global stock markets are mixed this morning in cautious trading as investors assessed the prospects of a US-Iran peace deal, even as the fate of the critical Strait of Hormuz appeared unresolved. Wall and Bay Street futures are higher after the S&P 500 and Nasdaq closed at fresh record highs yesterday. The TSX is operating just a hair under its record high set in late February.

Regardless of the back and forth, it s the closest that the US and Iran have been to potentially getting a peace deal and that s what s driving the positive momentum in markets this morning, said Daniela Hathorn, senior market analyst at Capital.com. But that s if one believes Trump is telling the truth.

The June US Dollar Index is down 0.170 at 97.705. The Canadian dollar weakened slightly against its US counterpart…currently quoted at 73.36 US cents.

June crude oil futures are down $3.83 at US $91.25/barrel. Oil prices are extending losses this morning…on a three day plunge now, and down now in five of the past six sessions off contract highs established last week. Oil has been sinking on renewed hopes for a US-Iran peace deal that could bring a gradual reopening of the Strait of Hormuz. But there is a lot of wishful thinking in that opinion.

From a broader perspective, oil markets have remained stuck between diplomacy and disruption for more than two months, with investors emotions being manipulated by headlines almost daily, said Priyanka Sachdeva, senior market analyst at Phillip Nova. If a formal deal eventually materializes, oil prices could witness a free fall as geopolitical premiums rapidly evaporate from the market. However, any fresh signs of attacks on oil infrastructure or escalation in the Middle East could easily trigger another parabolic spike in crude prices.

Fact is…global oil supplies are set to tighten further in the coming weeks even if the US and Iran agree on a peace deal to end their war because it will take weeks for oil shipments to resume from the Middle East Gulf and reach refiners worldwide. As such, oil companies will continue to deplete storage tanks to meet peak summer demand. The world has already used temporary buffers…commercial stockpiles, oil in transit or held in storage at sea and emergency reserves…to offset the shock from the war in the Middle East.

Grain Markets

Chicago soybean futures are trading 7 to 9 cents/bu lower this morning and making new lows from the overnight session. Bean futures closed Wednesday s session with contracts falling 10 to 16 cents. Soymeal futures are up $2/ton or less this morning after declining 30 cents to $3/ton in the front months yesterday. Soyoil futures are dropping another 107 to 117 points right now after falling 139 to 189 points lower on Wednesday.

Soyoil has pulled back off contract highs as energy markets dive on US-Iran war headlines…real or imagined. Soyoil has been carrying the ‘water’ for the soybean complex for a while. If the Middle Eastern peace agreement comes to fruition, traders may continue building weakening energy prices.

Traders continue to weigh the potential impact the trade summit between the US and China (May 14015) may have on next week’s market. Assuming ag trade, and soybeans in particular, are a part of the discussion, the big unknown is if China will buy more old crop US soybeans or the focus turns to new crop. China seems to be pretty well-supplied by Brazil s record soy crop, it is getting late in the current US marketing year. China also has a trade relationship with Iran and crude oil prices could remain volatile, depending on the status of the Strait of Hormuz.

USDA this morning reported US soybean exports of only 141,900 tonnes for the latest week ended April 30…a marketing year low…and below all trade expectations which ranged between 200,000 to 500,000 tonnes.

Meanwhile, US soybean planting conditions mostly look favorable, but some areas are seeing more precipitation and cooler temperatures. Additionally, Traders are monitoring the harvest in Argentina.

Chicago corn futures are extending weakness this morning to fresh overnight session lows, down another 5 cents right now. Crude oil remains a primary pressure factor for corn futures trade.

The corn market posted losses of 10 to 12 cents in most contracts on Wednesday, with a few deferred contracts down 4 to 7 cents. An increasingly prominent double top formation has been established on price charts.

USDA this morning reported US corn exports of 1.362 MMT for the latest week ended April 30…about midrange of trade expectations of between 1.0 to 1.8 MMT

Weekly EIA data from Wednesday morning showed an average 8,000 barrel per day increase US ethanol output in the week ended May 1, taking the total to 1.017 million bpd. US ethanol stocks were up 139,000 barrels to 26.02 million barrels.

Traders are watching the US corn planting pace, which, as of Sunday, was ahead of average. More rain delays are likely in some areas, and cooler temperatures could impact early emergence in portions of the Corn Belt.

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

US wheat markets are also down this morning…Minnie spring wheat futures are losing another 6 to 8 cents, HRW down 13 to 14 cents and SRW wheat shedding 6 to 7 cents…all markets at or near their overnight session lows. The US wheat complex posted losses across all three markets on Wednesday…spring wheat closing the day with 3 to 5 cent losses. Crude oil has been a pressure factor for all ag commodities.

USDA this morning reported US wheat exports of only 78,800 tonnes for the latest week ended April 30…well below trade ideas that ranged between 100,000 to 300,000 tonnes.

StatCan data showed Canadian wheat stocks at the end of March at 19.47 MMT, 12% higher than the same period last year. Excluding durum stocks were up 10.7% from a year ago at 16.056 MMT.

Weather threatening the Kansas HRW wheat crop is top of mind for traders. The sub-freezing temperatures on Wednesday hit the crop at a vulnerable growth stage. Rain was recorded in western Plains states this week, though totals were light…and may be too little to late to do much good.

A crop tour in Oklahoma projected a significant year-to-year drop in that state s wheat production due to drought, with more private state surveys upcoming closer to harvest.

The USDA will have a US winter wheat production update next week (May 12). Even if the USDA will likely trim their guess, wheat futures remain a global game and world supplies are ample.

Globally, wheat crops generally look good in the Black Sea winter wheat area. Rain is in the forecast for parts of Europe.

CANADIAN GRAIN MARKET

Sharp declines in crude oil sent ICE canola futures to double-digit losses on Wednesday. Losses in the Chicago soy complex, as well as European rapeseed and Malaysian palm oil added to the pressure on canola.

A Statistics Canada grain stocks report out Wednesday showed total Canadian canola stocks as of March 31 at 9.985 MMT, up 27.4% from a year earlier and the heaviest stocks for the date since 2020. At 8.516 MMT, March 31 on-farm canola stocks were up 30.1% from a year earlier, while commercial stocks increased a much more modest 13.8% to 1.469 MMT.

July canola futures dropped $13.80 to close yesterday at $743.50/tonne, while November lost $16.50 to $745.60.

For today… canola futures are trading $4 to $5/tonne weaker this morning. Benchmark July canola futures are down $4.60 right now at $738.90/tonne…currently on a 3 session slide and down 4 of the past 5 sessions since tapping contract highs last week. Immediate chart support resides right here at its 20-day moving average ($738).

Ag markets traders continue to eye Persian Gulf war developments and their effect on the energy markets as a leading indicator for grain market price trends…and right now its weaker. The US continues to tout that Iran is going to cave in to Trump demands anytime now. But the reality seems there is little reason to believe this conflict will be resolved anytime soon as Iran continues to make it clear that they are in no rush. In other words, more of the same that we’ve seen since the ceasefire began. But markets swing according to the next headline, nonetheless.

I have to admit being somewhat surprised by yesterday s Statistics Canada grain stocks as of March 31 report, with canola inventories up more sharply from last year than expected…pegged at 9.985 MMT versus 7.835 MMT last year and similar to the 9.843 MMT in store in March 2024. Abundant supply, especially old crop still in the hands of the farmer, may explaining why domestic crushers don’t feel any urgent need to pass on any amount of the record crush margin windfall they are seeing.

All ag markets are lower this morning…CBOT soybean and soyoil, EU rapeseed and Malaysian palm oil markets as they continue to slide with energy markets.

Traders here are also watching cool Prairie conditions starting to improve to soon advance what has been to date delayed spring planting.

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