Market Insights for May 2026

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Andy Campbell returns with the May Market Insights covering fresh Q1 earnings from CNH and AGCO, improving commodity prices, used equipment supply signals, and why diversification keeps showing up as the common thread among dealers who are outperforming.

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OEM Earnings: A Tale of Two Reports

CNH posted $3.8B in Q1 revenue, but net income collapsed from $132M to just $10M, an 80% profit decline driven by ballooning SG&A and R&D costs, much of it tariff-related. North American tractors over 140hp were down 27% and combines down 6%. CEO Gerrit Marx said the company is "passing through what we expect to be the lowest period of the current ag industry's cycle." CNH is shipping only pre-sold orders and targeting a $500M dealer inventory reduction across 2026.

AGCO told a different story: Q1 sales up 14% year over year, earnings beat, stock up 2%. CEO Eric Hansotia called out high-horsepower equipment and precision ag as outperformers, with Fendt and Massey Ferguson gaining share. Operating margins improved from 2.4% to 3.4%. AGCO flagged up to $110M in tariff exposure for 2026 but framed conditions as a "demanding market,” notably more measured than CNH's bottom-of-cycle language.

Key Takeaways:

• CNH revenue was flat but profits collapsed ~80%; tariffs and rising costs are the culprits.
• AGCO beat estimates with strong high-horsepower and precision ag performance.
• OEM messaging diverges: CNH calls it the cycle bottom; AGCO calls it a "demanding market."
• CNH is shipping only pre-sold units and targeting $500M in dealer inventory reduction.

Commodities: Psychological Lift for Farmer Sentiment

• Corn futures are near $5/bushel. This is not the windfall it once was given higher input costs, but psychologically positive for buyer sentiment. November soybeans recently jumped above $11.50, getting an additional boost on news of a potential Trump-Xi meeting later in May. Crude oil continues to pull corn along with it, and the Strait of Hormuz disruption may affect Brazil's safrinha corn crop more than North American supply. The WASDE report drops May 12th and could signal tightening ending stocks.

Key Takeaways:

• Corn near $5 and beans above $11.50 are positive signals for farmer and buyer sentiment.
• The May 12th WASDE report is the next key data point to watch.
• Strait of Hormuz disruption may have a bigger impact on Brazil's crop than on North America.

Used Equipment: Supply Tightening in Key Categories

Planter supply has dropped significantly. Row crop tractors and combines are nearing the bottom and flattening out month over month, so expect steady pricing into summer with a possible rebound. Four-wheel drives are still weakening, with values down roughly 4% year over year. One category to watch closely is grain carts, where supply is stacking up and buyer behavior is shifting. 

Key Takeaways:

• Planters, row crop tractors, and combines are stabilizing — pricing could firm up into summer.
• Four-wheel drive values are still softening.
• Grain cart supply is building — watch for more in the upcoming Equipment Trends episode.

Diversification: The Common Thread

Deere's February earnings flagged small ag and turf (up 24%) and compact construction as bright spots. Compact tractor market volume is down ~26% year over year, but reduced inventory has helped support prices. Anecdotally, dealers report that compact construction, compact tractors, and cattle-adjacent markets (beef and dairy) were standout performers in 2025 and into 2026.

Key Takeaways:

• Compact construction and compact tractors continue to be a bright spot.
• Cattle-country dealers are outperforming.
• Dealers with diversified mixes are best positioned to ride the recovery.

What to Watch in May

• Deere Q1 earnings: Expected later in May. Will they echo CNH's caution or AGCO's optimism?
• WASDE report (May 12th): Could signal tighter corn/soybean ending stocks.
• Trump-Xi meeting: Still tentative for May; a positive outcome could move commodity and trade markets.
• Tractor Zoom summer webinar: Coming late June. Watch our social channels for registration details.

Sources

• CNH Earnings Report
• USDA WASDE Report