• When it comes to long-term investing in the Grains sector, one can gain an advantage by knowing real supply and demand over the lemmings that follow USDA's imaginary estimates over a cliff. 

• With this in mind, US SRW wheat is one of, if not the most bearish market in the commodities complex. 

• It's a toss up between corn and soybeans, though the latter is actually showing a bit more bullish long-term fundamentals. 

The infamous BRACE Industry^[i] is gearing up for one of its favorite days Monday with the release of USDA’s May World Agricultural Supply and Demand Estimates (WASDE) on the docket for noon (ET). This particular round of monthly nonsense has the added attraction of being billed as “The First Look at New-Crop Grain Supply and Demand Estimates!!!” (I don’t know if 3 exclamation marks do the hype surrounding this silliness justice, but it’s what I went with this time.)^[ii] The humorous part of this is it’s actually the Fourth First Look at New-Crop Supply and Demand Estimates^[iii], but that fact seems to fly under the radar. 

Based on the same idea the late Charlie Munger held, “It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent”, I have no issue with more folks interested in long-term investments in the agricultural sector following a special group within the BRACE Industry, a segment I like to call the TASK^[iv] Force. Why? Because the more folks who do, the greater the advantage for those of us who don’t. 

Okay, with that monologue out of the way, for those of you actually interested or actively invested in ag markets long-term, let’s take a look at what we already know about real Grains sector supply and demand. After all, my Market Rule #6 states, “Fundamentals win in the end”, so long-term investments depend on a market’s supply and demand situation. 

Corn: As you know, corn is my preferred long-term investment market. Much like others spend their time devoted to US Treasuries, I spend my days studying King Corn, looking for opportunities. I’ve talked in the past I use two different avenues for my long-term investment positions: December futures only and the Teucrium Corn ETF (CORN) for those who don’t want to deal with the futures market. What do we know about corn’s real supply and demand (as opposed to USDA’s imaginary version): 

• The National Corn Index ($CNCI), aka the market’s intrinsic value, was priced last Friday near $4.2150 putting immediate available stocks-to-use at 12.6%^[v]. This would be slightly above the end of May 10-year average of 12.2% indicating short-term supply and demand is neutral.
• National average basis continues to run near its previous 5-year low weekly closes telling us the differential between the Cash Index and futures market is weak. This means there are plenty of supplies to meet demand.
• New-crop futures spreads continue to cover a neutral level of calculated full commercial carry, the exception being the bullish May-July futures spread. 

From a technical point of view, Teucrium CORN created a buy signal at the end August 2024. However, for those who take charts seriously, CORN then completed a sell signal at the end of February 2025. This was followed by a new 4-month low of $18.02 in early May. In other words, indications are CORN is settling into a long-term sideways pattern between the August low of $17.02 and February high of $20.69, with no fundamental reason to break out at this time. 

Soybeans: I’m not a big fan of the soybean market, particularly these days as Waston relearns it has to ignore anything and everything the US president has to say each day. With that in mind, let’s again look at what we know about the soybean market’s real supply and demand: 

• The National Soybean Index ($CNSI) was calculated last Friday near $9.99 putting available stocks-to-use at 15.3%. Similar to the corn market, this would be slightly above the previous 10-year average for the end of May soybean figure of 15.1%.
• National average basis has firmed during Q3 (March-April-May) of the 2025-2026 marketing year, sitting nearer previous 5-year average rather than low weekly closes. This fits with what we are seeing with the Cash Index mid-month.
• New-crop futures spreads are neutral-to-bullish. However, if I focus on the initial Nov-Jan futures spread it continues to cover a neutral 42% calculated full commercial carry. 

The Teucrium Soybean ETF (SOYB) has been fun as well, showing a buy signal at the end of December 2024 and sell signal at the end of February. While the soybean market seems to be at a point of indecision, the SOYB fund did post a bullish outside range during April, possibly bringing long-term investment money back based on the longer-term bullish new-crop futures spreads.  

Wheat: US soft red winter (SRW) wheat is one of, if not the most fundamentally bearish market in the commodity complex. Choose your poison: 

• The National SRW Wheat Index (CSWI) was calculated near $4.61 last Friday putting available stocks-to-use at 47.1%. This would be largest end of May (and marketing year end) figure since 51.8% back in 2017.
• Despite the July futures contract being priced in the lower 8% of its price distribution range (weekly closes only back through 2020), national average basis is running below its previous 5-year low weekly closes.
• New-crop futures spreads continue to cover what I consider bearish levels of calculated full commercial carry. 

As for the Teucrium Wheat ETF (WEAT), the fund hit another new all-time low of $4.44 Friday. I think that says it all.  

^[i] Brokers/Reporters/Analysts/Commentators/Economists who never read a government number they didn’t view as important and worth regurgitating endlessly. 

^[ii] I always think about the late Pat Hill, an editor I had the privilege of working with back in the newsroom. If memory serves me, always a question these days, Pat was not a fan of exclamation marks. My apologies Pat. I actually do remember what you taught me.

^[iii] Because I know you are curious: 1) USDA’s Baseline projections put together by a group of economists, released in January/February 2) Estimates released with much fanfare at USDA’s annual Ag Outlook Forum in late February 3) All the S&D tables created by the BRACE Industry following the release of USDA’s Prospective Plantings guess at the end of March.

^[iv] If you are familiar with ag media, both real and social, you’ll be able to piece together the names that make up the TASK Force. 

^[v] Here we can apply the Law of Supply and Demand we learned in Econ 101: Market price is the point where supply and demand curves intersect. We don’t know actual supply or demand numbers (Remember, USDA’s figures are “estimates”), but we do know market price.