BARN TALK
The Unfiltered Voice of Rural America
Weekly Newsletter · Issue #8 · May 20, 2026
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Hey folks, China made what sounds like a historic commitment to buy American soybeans this week, crude oil crossed back above $100 a barrel and closed the week at $105, and the wheat crop across the Great Plains is as bad as it's been in 50 years. The markets reacted to all of it, and not always the way you'd expect.
This Week
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Trump and Xi agreed to “dramatic” ag purchases. Then soybeans fell 30 cents.
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WTI crude topped $105/bbl. Diesel is up 48-60% since the Iran War began.
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USDA May WASDE: U.S. wheat heading for its smallest crop since 1972
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Corn and soybeans planted ahead of the 5-year average. Wheat is a different story.
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Pseudorabies confirmed in commercial hogs for the first time in 22 years
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CHINA PROMISED “DRAMATIC” AG BUYS. THE MARKET WANTED TO SEE IT IN WRITING.
Following a Trump-Xi summit last week, U.S. Trade Representative Jamieson Greer announced the U.S. expects “dramatic” and “double-digit billion” agricultural purchases from China over the next three years. China committed to buying at least 25 million metric tons of U.S. soybeans annually from 2026 through 2028, along with sorghum and other farm products. Beijing also re-approved export licenses for hundreds of American slaughterhouses. Big headlines. Big numbers. Big promises.
THEN THE MARKETS SOLD OFF
Soybeans dropped 30 cents on Thursday alone. Corn fell between 7 and nearly 12 cents on Friday. The reason: no signed purchase agreements came out of the summit. Greer's language was aspirational. “Dramatic” and “double-digit billion” are not contracts. Analysts called the commitments a framework, not a binding deal. The gap between what gets said at a summit and what actually ships to a Chinese port has burned farmers before, and traders remember that.
WHY IT STILL MATTERS FOR YOUR OPERATION
That said, the structure of the deal is real. China agreeing to buy 25 million metric tons of soybeans annually is meaningful if it holds. Brazil currently ships far more to China than the U.S. does, and any market share the U.S. recaptures tightens the supply picture. Private exporters reported 252,000 metric tons in soybean sales on May 14, a small sign that business is actually moving. The WASDE already projects $11.40/bu as the 2026/27 soybean farm price. If Chinese purchases materialize, that number has room to move higher. If they don't, beans are going to feel heavy for a while.
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From the Barn
China's been here before. They committed to huge ag purchases in the Phase One deal back in 2020, fell well short of the targets, and the soybean market felt every bit of it. Farmers don't need another press conference. They need purchase orders. Until grain is actually loading on ships headed to Chinese ports, treat this as noise.
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THE STRAIT OF HORMUZ CLOSED AND YOUR FUEL BILL WENT WITH IT
On February 28, 2026, the U.S. and Israel launched airstrikes on Iran. The Strait of Hormuz, a 21-mile-wide channel that carries 20% of the world's traded oil and critical fertilizer shipments, effectively closed. You've been paying for it ever since, and this week the bill got bigger.
WTI crude cracked $105/bbl this week, up 11% from last week alone. Since the war began, diesel prices nationally are up between 48 and 60 percent. In six states, diesel has already hit record highs. Every farm that runs diesel is feeling this. A single tractor running at field capacity is costing $350 more per day to operate than it did at the start of 2026. If you're running a four-tractor planting crew, do that math.
BY THE NUMBERS
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WTI crude oil: Up 11% in the week of May 11-15 alone, closing above $105/bbl. Before the war started, WTI was sitting around $65-70/bbl. The IEA has warned markets could remain severely undersupplied through October even if fighting stops tomorrow.
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Diesel prices: Up 48-60% nationally since February 28. Six states are already at record highs. Nitrogen fertilizer is up 30-40% over the same period.
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Fertilizer access: In a recent American Farm Bureau survey, 70% of respondents said they can no longer afford all the fertilizer they planned to use this season. Among Southern farmers, 78% said the same thing.
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WHAT YOU CAN DO FROM HERE
There's no magic hedge against a war in the Middle East. But farmers who locked in fuel contracts early this year are in a materially better position than those buying diesel spot. The bigger risk right now is for anyone who deferred fertilizer purchases hoping prices would come down. They haven't, and the IEA isn't optimistic about the next six months. If you've got nitrogen you need and haven't bought it yet, that conversation with your input supplier is overdue.
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From the Barn
This is what energy dependence looks like in practice. The oil markets don't care about your planting schedule. When the Strait closes, diesel goes up, fertilizer goes up, and your cost of production goes up. The question is whether your grain price goes up enough to cover it. Right now, with corn down 16 cents on the week and soybeans down 30, the answer isn't pretty.
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Tork's Market Update
What the numbers mean for you
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This Week's Numbers
Prices as of market close · May 16, 2026 · Courtesy of katsgrain.com
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Corn (Jul '26)
$4.55 /bu
▼ $0.16 on the week
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Soybeans (Jul '26)
$11.96 /bu
▼ $0.30 on the week
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Chicago Wheat (Jul '26)
$6.47 /bu
▲ $0.17 on the week
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Live Cattle (Jun '26)
$246.15 /cwt
▼ $2.45 on the week
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Lean Hogs (Jun '26)
$98.75 /cwt
▲ $0.12 on the week
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Crude Oil (Jun '26)
$105.66 /bbl
▲ $10.66 on the week
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Tork's Picks
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Bitcoin
$80,120 USD
▲ $377 on the week
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Tesla (TSLA)
$422.24 /share
▼ $21.76 on the week
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This isn't financial advice. I'm just a farmer with an opinion.
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Tork's Take
Corn got hit hard this week, down 16 cents as the summit buzz faded the moment traders realized there was no signed deal on the table. Soybeans were worse, off 30 cents in a single session Thursday. Wheat was the one bright spot, up 17 cents on a crop condition report that confirms the worst drought damage the Plains have seen in years. Crude at $105 is the number that should keep you up at night if you're still running planters. Bitcoin held flat, Tesla dropped about 5%, and the broader market is telling you it's not in a risk-on mood right now. If you're sitting on old-crop corn or beans and waiting for a better number, the China deal story gave you a window this week before it slammed shut. Whether that window reopens depends entirely on whether purchase orders actually start flowing.
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Sawyer's Spotlight
The younger generation's take, straight from the barn
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A while back I was talking to a banker I know, somebody who lends to farmers in this area, and he said something I haven't been able to shake. He told me there are guys he can't help anymore. The operating line is too far gone. He said if they'd come in two years earlier, he could have done something. Now there's not much to do but watch it play out.
The story of how we got there is pretty simple. When interest rates were near zero, there was no incentive to pay anything down. You rolled your operating line every year, extended it, expanded it. Rent went up, inputs went up, equipment payments went up, and you just kept rolling. Then rates changed, commodity prices didn't cooperate, and suddenly that operating line turned into an amortized land loan you can barely service. You went from one problem to two, and then both of them got worse at the same time.
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“The operating line is just too much to bear. If you’d come in two years ago, we could have done something. Now there’s nothing to do but watch it play out.”
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What makes it worse is the equipment side. Guys who financed new combines and tractors at the top of the market are upside down. Dealerships don't want their trade-ins. They're trying to move them at auction or private sale, and auction values on tractors and combines are down somewhere around 25%. The balance sheet looks like a disaster, and that's before you factor in what corn at $4.55 does to your profitability if you're paying high rent.
The smaller banks around us have been quietly getting out of ag lending one by one. That alone should tell you where the smart money thinks this is headed. You can talk about farm profit forecasts being up 37% in aggregate all you want. When your operation is running on a negative cash flow and your banker's calling to tell you there's nothing left to do, that aggregate number doesn't mean a whole lot to you.
If you're in the middle of this right now, or you know somebody who is, hit reply. I read every one. Sometimes it helps just to know somebody else sees it.
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4 Things That Caught Our Eye This Week
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01
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Pseudorabies Just Showed Up in Commercial Hogs for the First Time Since 2004
USDA confirmed pseudorabies virus in commercial swine herds in Iowa and Texas in early May, the first cases in U.S. commercial production since the disease was eradicated more than 20 years ago. The outbreak traced back to boars at an outdoor Texas facility that likely contracted it from feral hogs. Mexico moved quickly, suspending imports of U.S. breeding pigs, semen, and pork offal products. USDA says there's no risk to consumer pork safety and no broader trade restrictions are in place, but this is a disease most hog producers under 40 have never dealt with in a commercial setting.
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02
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Corn and Soybeans Running Ahead of Schedule. Wheat Is a Different Story.
As of May 10, corn was 57% planted nationally, five points ahead of the five-year average. Soybeans hit 49% planted, 13 points ahead of average. Good news on the row crops. Winter wheat is a completely different situation: 40% of the crop is rated poor to very poor, up 22 percentage points from a year ago. Drought across the Great Plains has been severe all spring, and the USDA's May WASDE pegged U.S. wheat production at 1.561 billion bushels, the lowest projection since 1972.
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03
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John Deere Says 2026 Is the Bottom. Their Q2 Earnings Call Is Tomorrow.
Deere CEO John May has been saying 2026 is the bottom of the current ag equipment cycle, with recovery and accelerated growth ahead. Deere reports Q2 2026 earnings tomorrow, May 21. CNH, for comparison, is telling investors not to expect much until 2027. Farm equipment values have been beaten down for more than two years, dealerships are holding excess inventory, and used equipment auctions are still pricing in more pain. Whether the CEO is right about the timing or just trying to hold the stock together, the earnings report is worth a look.
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04
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Precision Ag Is Pushing Farmers to Demand Better Rural Broadband
The Fiber Broadband Association put out a paper on May 11 making the case that current federal broadband benchmarks are failing farm operations. Modern precision agriculture equipment, GPS-guided planters, automated irrigation, connected combines, remote sensors, needs high upstream speeds, low latency, and reliable connectivity across large land areas. The paper concludes only fiber can consistently deliver what ag operations actually require. The USDA's ReConnect Program has put over $2 billion toward rural connectivity, but the gap between what farmers need and what most rural providers offer is still real in a lot of counties.
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Before You Go
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Barn Talk Trivia
Think You Know Your Stuff?
This Week's Question
What percentage of total U.S. wheat production is typically classified as “winter wheat,” planted in the fall and harvested the following summer?
| A Around 35% |
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B Around 50% |
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| C Around 70-75% ✓ |
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D Around 90% |
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Answer
C: Around 70-75%. Winter wheat accounts for roughly 70-75% of total U.S. wheat production. It's planted in September and October across the Southern and Central Great Plains, mainly in Kansas, Oklahoma, and Texas, then harvested the following May through July. The other 25-30% is spring wheat, grown in the northern Plains states like North Dakota, Montana, and Minnesota.
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Did You Know?
The U.S. loses roughly 2,000 acres of farmland to development every single day. Over a full year, that's more than 700,000 acres converted to housing, roads, warehouses, and solar installations. Ground that took generations to build up, and it won't come back into food production once it's gone.
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Barn Talk Word of the Week
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MARGIN CALL
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When a futures position moves against you far enough, your broker doesn't wait. They call and demand you deposit additional cash immediately to cover potential losses, or your position gets liquidated. In ag markets, a margin call can hit in the middle of planting season when you're already stretched on operating capital. It's one of the worst calls you can get when you're sitting in a cab trying to make the most of a good planting window.
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This was a week of big promises and bigger fuel bills. China's got our attention, but farmers have been burned before by deals that looked real on TV and went quiet at the dock. The Iran situation is the story most people in the cities still aren't really talking about, but anybody filling up a diesel tank knows exactly how it ends. Stay sharp, keep your head up, and keep sharing the show.
We'll see you in the barn.
Sawyer & Tork
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