With the middle east conflict ongoing and a big report on the horizon, the commodity markets assumed a sideways trajectory as traders look for the safest position ahead of the upcoming news. Corn ended the week 3 lower in the May and July contracts and 1 lower in the December contract. The funds are long 285,630 corn and 198,350 soybean contracts.

Late last week, President Trump again pushed back his deadline for Iran to agree to reopen the Strait of Hormuz or face attacks on its power infrastructure. The 10-day extension was his second since Saturday’s threat to destroy the critical infrastructure in the absence of Tehran accepting a 15-point list of ceasefire terms. This sent crude oil back over $100/barrel and added support to corn and soybeans. Trump keeps extending his deadline and so far, Iran has shown no signs of backing down.

The EPA’s finalized Renewable Fuel Standard “Set 2” rule, was announced on Friday at the White House, sets biofuel blending requirements for 2026–2027 at record levels, reinforcing a structurally stronger demand outlook for U.S. agriculture—particularly corn and soybean oil. The rule maintains the 15-billion-gallon conventional ethanol mandate while driving a more than 60% increase in biomass-based diesel demand, alongside a 70% reallocation of small refinery exemptions, all of which tightens the effective mandate and supports RIN values. The policy also tilts future demand toward domestic feedstocks by discounting foreign fuels starting in 2028, further anchoring U.S. soybean oil and crush demand. This is a bullish policy shift for the ag complex, boosting farm income potential, supporting crush margins, and reinforcing the energy-to-ag demand chain into 2026–2027.

On Tuesday the USDA will release their March WASDE at 11:00am. Estimates for this report are listed below.

USDA March 1 Stocks (Billion Bushels)

USDA 2026 Prospective Plantings (Million Acres)

The March 31^st planting intentions report is one of the more volatile reports of the year and it gives us a baseline for the farmer’s intentions entering a new crop season. This report is based on survey data collected from farmers between late February and mid-March based on assumptions about their planting intentions, which could (and to some degree will) change depending on weather, market prices, or fertilizer costs and availability. Commodity prices have rallied and input costs have escalated since a lot of this data was collected, so this year’s report may not be as accurate as it would have been before the conflict in the middle east. While it may not be accurate, these are the numbers that the trade will use until we get more accurate numbers in the June report.

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The commodity markets continue to be driven by headlines coming out of the Iranian conflict and geopolitical news. Last week corn had a 20-cent trading range only to close 2 cents lower in the May, July and December contracts. The funds added to their length in corn and are long 268,888 contracts. The funds reduced their net position following Monday’s selloff and are now long 205,221 contracts in the soybean market.

Last Monday morning President Trump indicated that the US/China summit may be delayed but failed to give specific reasons why. This sparked massive liquidation in the soybean market as traders speculated this would translate to export sales cancellations and the loss of future promised business. Soybean futures ended the day 70 cents lower. Corn and Wheat were pulled lower by this weakness and ended 13 and 17 cents lower respectively. Trump later gave some clarity and explained that he was delaying the meeting because he felt his presence and attention were needed in the Iran conflict, so he and President Xi were going to put off the meeting for a month or so.

On Tuesday President Trump invited US farm and biofuel representatives to the White House for what is being called a “Celebration of Agriculture” event. The wording of the event has raised expectations among US farmers and the biofuel industry that Trump will announce a large/favorable RVO package along with the RVO/SRE reallocation mandates at this meeting on the 27th. This helped the markets bounce from Mondays lows and close higher.

We have seen a nice rally in the corn market over the last few weeks, which is a result of war and energy market rallies. Since corn is the main feedstock used for ethanol production most would have expected both corn and ethanol to have a sharper rally over the past few weeks than we have witnessed. In my opinion we have not seen the spike in either because ethanol demand is capped and regulated. Higher crude oil prices often show up in RIN (Renewable Identification Numbers) rather than a sharp rise in ethanol prices themselves. This may result in ethanol margins being slightly higher, but production and thus corn demand has remained flat.

In comparison, soybean oil demand is open-ended and directly connected to diesel economics. This leaves soybeans to have a more active fund positioning, which amplifies price swings, while corn is being treated as a balance-sheet, range-bound market. Corn is mostly stable because supply and demand are well defined. Even with the noise in oil markets and switching acres, it is wholly expected that we will have plenty of corn to supply next year. Unless the market sees a much lower planted acreage number, I don’t expect the corn market to have a significant break to the upside.

We are just over a week away from the much-anticipated WASDE report that will be released on March 31st. Quarterly stocks will be monitored, but prospective plantings will be the focus. We saw our first estimates released this past week and there will be many more this coming week that I will post in next week’s letter.

The Strait of Hormuz is the main motivator of the corn rally, and that problem hasn’t found a resolution. Until that resolution is found, all markets with ties to energy will be volatile.

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In times of conflict, any market that is tied to energy does not wait for physical shortages, they price in probability. This is exactly what we have been witnessing over the last couple weeks in the corn market. May, July and December futures all ended the week 7 cents higher.  The funds have taken a strong position adding to their length in both corn and soybeans over the last two weeks. They ended last week long 218,804 corn contracts and long 232,454 soybean contracts.

The Iranian conflict has helped corn and soybeans find strength with crude oil rallying on increased Strait of Hormuz risks. Reports of a cargo ship being hit by unknown projectile and its crew evacuating the vessel supported concerns regarding transportation in the region early last week. Despite President Trump claiming it was happening, the US Navy was accused of denying all requests for escort in the Strait last week. Unnamed officials were quoted as saying the risk in the region was too great to begin escorting commercial vessels.

Stories about the rising costs of fertilizer influencing US planting decisions have also circulated resulting in stronger new crop corn values. Prices of fertilizer have increased more than 30% over the last couple weeks, but corn prices have also rallied. Depending on the area and operation, the corn rally appears to have covered the increase in fertilizer costs so far. The concern going forward is whether it continues to rally to cover any further increase in nitrogen prices.

The USDA report on Tuesday was essentially a non-event with no changes to the US balance sheet. While the USDA raised world production slightly, the report didn’t give us much new information at all.

2025/26 US Carryout (Billion Bushels)

2025/26 World Carryout (Million Tonnes)

December futures reached a high of $4.985 on Monday of last week before selling off and ending the week at $4.915. I do not feel that crude oil is done running higher and expect higher crude is going to take December corn futures back over $5 in the next week as tensions remain. The funds just started going long corn and if they keep doing so, prices are going to get better. $5 December futures will buy a lot of new crop corn from producers. This war is escalating more each day, and I’d expect more this coming week. Buyers and sellers need to keep in mind that this is all about crude oil as there is no fundamental story for corn to rally at the present time. Be sure to get sales on the books and offers in with your buyers because this market will drop faster than it rallied and you don’t want to try catching a falling knife!

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The markets have turned extremely bullish over the last week, driven by crude oil and geopolitics. Speculative money is flowing into the commodities as crude oil and other energies move higher. Crude oil was up more than $20/barrel last week. May corn was up 12 cents last week while July and December futures closed 15 cents higher respectively. The funds have added to their long position and are now long 91,243 corn and 209,491 soybean contracts.

Iran holds the world’s third largest oil reserves and ranks between 6th and 8th as the largest producers of oil depending on sanctions and logistics. It’s also situated on the northern edge of the Strait of Hormuz. Over 20% of the global crude capacity ships through this strait daily. Since the bombing last weekend, traffic through the strait has nearly stopped. Threats from the Iranian Revolutionary Guard and cancellations from insurance writers have left shippers unwilling to risk passing through. Iraq, Kuwait, Bahrain, Qatar, and the UAE all require passage through the strait to export most of their crude oil. Both Kuwait and the UAE announced production cuts on Saturday due to a lack of storage and export capacity.

Typically, the markets price in a “worst case” scenario leading up to anticipated conflict, then remove the premium as long as production and execution remain unthreatened. Obviously, this conflict escalated over the weekend instead of de-escalating. Energy Secretary Chris Wright commented on Sunday morning saying “The plan is to get oil and natural gas and fertilizer and all the products from the Gulf flowing through the straits before too long. We are wearing down their (Iran’s) ability to strike with missiles and drones and that rate of attrition will increase in the coming days”. The entire globe has a vested interest in seeing the straits return to capacity. But it may not happen as quickly as we would like. The straight is a major source of leverage for Iran and I would expect they fight to maintain control.

While it may not garner much attention due to the energy markets, we do have a WASDE report on Tuesday this week. Estimates for the report are listed below.

2025/26 US Carryout (Billion Bushels)

2025/26 World Carryout (Million Tonnes)

Buyers and sellers of grain need to remember that the markets are not rallying due to a fundamental grain issue. One thing that this conflict will not change is the record stocks of old crop corn that we have in the US. Ethanol plants and Bio Diesel plants were running at capacity before the conflict, so demand for grain is not going to change. Eventually the conflict will be over, and prices will likely be retraced as quickly as they rallied. We have no idea how far up it will go or how quickly it will break, so you need to be proactively selling into this rally.

Short covering is the name of the game as investors question how long this conflict will go on. As I am wrapping up this recap on Sunday night, crude oil is up $26/barrel and trading at $117/barrel. Corn is trading 10-12 cents higher. The world is not running out of oil, but until carriers are able or willing to navigate the strait of Hormuz, crude oil will continue to rally and chaos in the market will remain.

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The markets finished stronger as we ended the month with March futures entering first notice day. Adding to the late rally on Friday was concern over what was going to happen in Iran. Crude oil was up more than $2.50 amid the rising tensions. This brought buyers to the wheat market that pulled corn higher. May and July futures ended the week 8 cents higher while December closed 4 cents higher. The funds have now exited their short positions in corn and ended the month long 22,766 contracts and long 177,392 soybean contracts.

Reports over the weekend that Iran’s leader Ali Khamenei was killed in a major attack on Iran launched by Israel and the United States, Israeli officials told The Associated Press on Saturday. With a higher level of political uncertainty there will be questions about the trajectory of Iran’s regional posture in the short term. This heightens the likelihood that elevated risk will persist longer and create uncertainty in several markets, Crude oil being the biggest one.  On the agricultural side I look for many implications of this attack. I look for both corn and soybeans to track higher due to the biofuel connection that corn and soybeans have with crude oil. Corn (ethanol) and soybean oil (biodiesel/renewable diesel) tend to track crude oil in times of conflict. Higher oil prices also increase input costs for producers as higher crude and natural gas lift nitrogen prices.

As we work our way closer to spring, traders will focus on weather and planting progress. The US has seen significant drought this winter. Almost 74% of the US is in some form of drought based on the latest drought monitor readings. The quick fading of La Nina into El Nino is seeing the first shift and that is generally a wetter spring, followed by a dry, but cool summer. Again, that would be the ‘basics’ and that would be fairly crop friendly if it occurred.

I expect higher oil and prices when the markets open Monday. If energy prices hold their gains, corn and especially soybeans will remain firm. If oil fails to hold its strength, grains may give back the initial gains that we saw on Friday. The duration of instability, not just the headline, will determine whether this becomes a sustained repricing across agriculture or simply a short-lived event.

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