SPEAKER_01 0:00

Today's market tape is um well it's basically fundamentally broken. On one side, you have this massive concrete, $17 billion agricultural deal anchored in pure math. But then on the other side, you've got an energy market that is just completely ignoring a massive physical oil shortage.

SPEAKER_00 0:16

Yeah, it's wild. It's all because of a single uh postponed military strike.

SPEAKER_01 0:21

Exactly. So today we are doing a deep dive into the May 192026 pre-market futures briefing. That's by Eli Levy at Canon Trading Company.

SPEAKER_00 0:31

Right. And our mission here is really to equip you with the core arguments driving today's tape. We want you to understand this tug of war so you know what's actually moving your portfolio.

SPEAKER_01 0:40

Disclaimer: Trading futures, options on futures, and retail off-exchange foreign currency transactions and other financial instruments involve substantial risk of loss and are not suitable for all investors. Past performance is not indicative of future results. Carefully consider if trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.

SPEAKER_00 1:06

So let's start with the math that is actually working today. The White House just confirmed a really massive US-China trade framework.

SPEAKER_01 1:14

Oh, right. China is committing to buy, what, at least $17 billion annually in U.S. agricultural goods?

SPEAKER_00 1:22

Yeah, at least $17 billion, and that goes through 2028. Plus, they are finally resuming imports of U.S. beef and poultry.

SPEAKER_01 1:29

I mean, that is huge. It's kind of like uh suddenly unlocking this massive exclusive VIP buffet for U.S. farmers after the doors have been locked for ages.

SPEAKER_00 1:40

That is a great way to put it. You know, Eli Livy actually flags this in the briefing as a clean bullish catalyst.

SPEAKER_01 1:46

Right, because traps all that managed money, doesn't it?

SPEAKER_00 1:49

Exactly. Funds were heavily betting against wheat, like holding these massive net short positions. Wow. So when the $17 billion demand floor suddenly materializes out of nowhere, those short sellers have to just panic by to cover their positions.

SPEAKER_01 2:02

Which just acts like lighter fluid on the price rally.

SPEAKER_00 2:05

Totally. And it is immediately boosting live cattle and lean hogs right along with it.

SPEAKER_01 2:09

Okay, so agriculture has this new certainty, this solid floor. But if you look at energy, it's just yeah, well, it's absolute unpredictability.

SPEAKER_00 2:18

Aaron Powell Oh, 100%. The energy sector is just ruled by geopolitical brinkmanship right now.

SPEAKER_01 2:23

Aaron Powell Yeah, like those overnight headlines. A planned U.S. strike on Iran gets postponed, right? And that was after appeals from Saudi Arabia, Qatar, and the UAE.

SPEAKER_00 2:33

Aaron Powell And the market reaction was just violent. Brent crude completely reversed, dropping from a $112 close all the way down to $109.15.

SPEAKER_01 2:43

Okay, but wait, let me push back on that logic for a second. The IEA is reporting that global supply is already down 1.8 million barrels per day.

SPEAKER_00 2:51

Right. It's a severe drop.

SPEAKER_01 2:53

And on top of that, the Strait of Hormuz is effectively closed until late May. The oil is physically not there. So shouldn't we view this price drop as, I don't know, a temporary illusion rather than a true market correction?

SPEAKER_00 3:05

You are absolutely hitting on the core issue here. It is a purely headline-driven trade. Trevor Burrus, Jr.

SPEAKER_01 3:10

Just algorithms reacting to the word postponed.

SPEAKER_00 3:12

Exactly. It's temporarily masking this really severe underlying physical energy deficit. The fundamental supply backdrag hasn't magically changed.

SPEAKER_01 3:23

And that persistent elevated energy cost ties directly into this stubborn U.S. inflation we keep seeing.

SPEAKER_00 3:29

Aaron Powell Oh, yeah. Which is completely rewriting the Federal Reserve's entire playbook at this point.

SPEAKER_01 3:33

Aaron Powell Because market expectations for a rate cut have basically vanished.

SPEAKER_00 3:37

Aaron Powell Totally gone. Now, there is actually a 40 percent market-implied probability of a 25 basis point hike before the end of the year.

SPEAKER_01 3:45

Aaron Powell A hike? Wait, really?

SPEAKER_00 3:47

Yeah, a hike. And this rate's repricing is just keeping the US dollar completely dominant.

SPEAKER_01 3:51

Aaron Powell Right, which is crushing the Japanese yen. It's pushing, what, toward 159?

SPEAKER_00 3:55

Yeah, pushing 159. Yeah. And it's also causing industrial metals like copper to correct from their recent record highs.

SPEAKER_01 4:02

Aaron Powell Because those LME traders are just, you know, taking profits while the dollar is strong.

SPEAKER_00 4:06

Precisely.

SPEAKER_01 4:07

So essentially, your portfolio today is navigating this crazy tug of war. You've got bullish concrete agricultural deals on one hand, and then these highly reactive energy headlines on the other.

SPEAKER_00 4:17

It is definitely a lot to balance.

SPEAKER_01 4:19

Massive thanks to Canon Trading Company for the insights driving today's deep dive. And remember, you can reach the briefing's author, Eli Levy, directly at Eli at CanonTrading.com.

SPEAKER_00 4:30

Definitely reach out if you want the full report.

SPEAKER_01 4:32

But I want to leave you with this provocative thought to chew on. If a simple delay in a military strike can immediately tank oil prices, despite a massive, undeniable physical supply shortage, are markets currently trading on economic reality? Or are they entirely hostage to the next breaking headline?

SPEAKER_00 4:50

Disclaimer. Trading futures, options on futures, and retail off-exchange foreign currency transactions and other financial instruments involve substantial risk of loss and are not suitable for all investors. Past performance is not indicative of future results. Carefully consider if trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.