Howdy market watchers! 

How is it already the end of May? With rain and cooler weather, it sure feels earlier than the final day before the calendar turns to June.  Yet here we are with Friday marking the end of the week and month of a shortened trading week after the Memorial Day holiday. 

There were still plenty of meaningful headlines in the four short trading days.  Firstly, President Trump delayed the implementation of 50 percent tariffs on the EU announced last Friday to July 9^th from June 1^st. Markets welcomed that news as they have all such reprieves from tariff implantation delays of late.  

To add further uncertainty, a federal trade court ruled on Wednesday that the Trump Administration could not use the International Emergency Economic Powers Act of 1977 to impose reciprocal tariffs on a long list of countries. Of course, this ruling was Appealed and I’m sure will eventually head to the Supreme Court as will many other challenges to Trump’s authority from significant moves since making the transition to the Presidency.  The world is now really watching how all of this plays out and will likely stall making any deals until there is a “final” decision on the legality of such tariffs. 

This also further muddies the picture to spur the FOMC to act.  Friday’s release of the Personal Consumption Expenditure (PCE), the Fed’s preferred inflation measure, increased just 0.1 percent in April, bringing annual inflation down to 2.1 percent, lower than expected and very near the Central Bank’s target of 2.0 percent.  Core inflation also increased by 0.1 percent in April, but was higher than expected at 2.5 percent year-over-year.  

Consumer spending, which has remained stout despite declining outlook sentiments, slowed considerably in April, increasing only 0.2 percent while the savings rate jumped to 4.9 percent.  This is the highest savings rate in nearly one year.  While softer consumer spending has long been expected, it is just now beginning to show up in the data.  Lower energy prices is welcome news for consumers ahead of summer travel and a central factor in softer inflation data.  

However, that is not really translating to all segments as yet with consumers still squeezed by higher living costs overall.  Food inflation has eased with ag commodity prices continuing to bleed lower except for the livestock complex which has remained stubbornly elevated near mid-May historic highs.  

New crop corn and soybean futures, in particular, have had a tough past five trading sessions of consecutively lower lows.  December corn closed below $4.40, for the first time since May 16^th. November soybeans closed right at the 50-day moving average at $10.26.  This level needs to hold or I foresee another 14 cents lower.  

This week marked the first US corn conditions rating coming in at 68 percent Good-to-Excellent versus 73 percent expected.  US corn planting is now 87 percent complete versus 88 percent expected and ahead of the 85 percent average.  US soybean planting is now 76 percent complete, 2 percent behind expectations, but still 8 percent ahead of average.  

Surprisingly, the wheat markets have been able to hold up relatively well despite continued weakness from its row crop peers.  US winter wheat conditions came in below expectations of 53 percent G/E at 50 percent, just ahead of last year’s 48 percent. While rains are welcome, severe weather including wind, hail and heavy downpours in the wheat belt are beginning to turn a positive into a negative.  I’ve started to see widespread lodging as the wheat crop ripens, straw strength wanes and heavy heads lay over large swaths of fields.  With some heat and dry weather, issues can be avoided, but additional rains can begin to impact standability as well as grain quality with more rain chances over the next 10 days.  

This past week, Oklahoma wheat conditions declined by 10 percent to 46 percent G/E while Nebraska declined 9 percent to just 19 percent G/E, Texas down 6 percent to 26 percent G/E and Kansas down 1 percent to 48 percent G/E.  Colorado and South Dakota both increased 5 percent G/E after recent declines to reach 51 percent and 28 percent G/E, respectively.  

US spring wheat planting is now 87 percent complete, just behind 90 percent complete and the average 80 percent. However, spring wheat conditions were a huge surprise with G/E ratings at just 45 percent complete versus 71 percent expected, the lowest in 37 years.  

With the US dollar trending weaker, US exports have been sturdy with this week’s corn exports within expectation levels, wheat exports higher than expected although soybeans were at the lower end of expectations.  I still have faith that the wheat market can rally between now and Father’s Day on June 15^th.  

The Kansas City wheat contract looks more bullish than Chicago wheat, but expect they will move relatively in sync.  However, I do expect the KC wheat contract as higher quality will move faster than the lower protein Chicago soft wheat contract.  On the chart, KC wheat futures made higher lows Wednesday through Friday with Thursday being an inside day with a close just above the 9-day moving average followed by Friday’s higher high and another close above the 9-day moving average.  We now need to retest the recent May 21^st high that was higher than the May 5^th high.  I foresee July KC wheat potentially reaching the 50-day moving average at $5.52.  

We’ll have to see how the chart is looking once we’re at that level, but I am somewhat concerned that once harvest is really started and progressing that yields are going to be there.  While I said last week that I believed the lows are in the wheat market for now, I do think there is potential in the coming months to make lower lows, unfortunately.  

Over in the livestock complex, it was another wild week in the cattle market.  On Tuesday morning, there was a rumor that the USDA had confirmed New World Screwworm being detected in Missouri, “marking the first occurrence of this parasitic fly in the state since its eradication in the 1960s."  Cattle futures plunged on the news with feeders down over $6.00 per cwt at one point before rallying back to close only $2.250 per cwt on the day.  While the confusion continued into Wednesday, the USDA did finally issue a statement that the report was “false.”  

US Ag Secretary Rollins has been very proactive in controlling the border with Mexico to prevent this.  While we sure hope this week’s rumor does not manifest in the US, such headlines would sure be a black swan to move this market.  

The feeder cattle chart gap that was put in on May 15^th was filled on Friday when the market rallied, but then closed lower on the day and right at the respective 9-day moving averages.  If we trade and close below the 9-day moving averages, we could be headed to the 50-day moving average that is around $3.00 per cwt lower.  

Having said that, cash markets are strong.  Fed cattle traded cash topped out this week at $223 in Texas and Kansas and $236 in Nebraska versus June Live cattle futures reaching a weekly high on Friday at $217.274.  This cash trade is $3.00-5.00 higher than last week.  I would rather be long live cattle than feeder cattle, but also like the short feeder, long live cattle trade right now to reduce risk.  

If you want to trade $3.00 feeder futures, now may be the time.  March 2026 feeder futures closed Friday at $286.300 for those planning ahead.  

Sidwell Strategies is the one-stop shop to protect cattle with futures, puts, LRP or a combination of all, which is probably the best strategy overall.  If you’re ready to trade commodity markets, give me a call at (580) 232-2272 or stop by my office to get your account set up and discuss risk management and marketing solutions to pursue your objectives.  Self-trading accounts are also available.  It is never too late to start and there is no operation too small to get a risk management and marketing plan in place.  

Wishing everyone a successful trading week!  Let us know if you'd like to join our daily market price and commentary text messages to stay informed!

Brady Sidwell is a Series 3 Licensed Commodity Futures Broker and Principal of Sidwell Strategies.  He can be reached at (580) 232-2272 or at brady@sidwellstrategies.com.  Futures and Options trading involves the risk of loss and may not be suitable for all investors. Review full disclaimer at https://www.sidwellstrategies.com/fccp-disclaimer-21951.