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!

Upcoming reports

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.

Upcoming reports

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.

Upcoming reports

With limited fundamental news to move the markets it was a quiet week of trading until news broke on Friday of the Supreme Court’s ruling on President Trumps tariffs. The May and July contracts ended the week 2 cents lower while the December contract was unchanged. The funds ended the week short 40,313 corn contracts and long 148,981 soybean contracts.

On Friday, The Supreme Court released its ruling on President Trump’s tariff policy. The ruling was against the President in a 6 to 3 vote. The case before the court was over the usage of the IEEPA (International Emergency Economic Powers Act). The court not only ruled on the IEEPA but also ventured its opinion on tariffs used by any President. Essentially, the case was decided against IEEPA only, but with a modest warning against the President on grabbing powers beyond what was stated as his. The President has several other items at his disposal to levy tariffs on countries to accomplish his goals, but the loss of IEEPA does change his leverage against some key players, such as China. It is estimated that without IEEPA, leverage against China falls by about 2/3.

The President issued a speech following the Courts ruling that he is planning to use the Safeguard tariffs and the Unfair foreign practices tariffs to carry out his goals. Both of these Acts are legitimate and could be implemented immediately if he so chooses.  The markets may see an initial move higher as investors reassess supply chains, pricing structures, and global trade flows with the tariffs lifted, but volatility could remain elevated as the White House evaluates its next steps and potential alternative trade actions.

On Wednesday the World Ag Outlook board released their projections for the 2026 crop. The data they released is mainly used for budgetary projections as most of the numbers are estimates and not tied to surveys and physical data like the USDA uses in their WASDE reports. The board estimated corn planted acreage at 94.0 million which is down from 98.8 million in 2025. Corn yields were estimated at 183.0 bushels per acre, which is down from last year’s 186.5 bushels per acre. Production came in at 15.755 billion bushels and ending stocks at 1.837 billion bushels. Historically the only data from this report that the USDA uses is the yield number as it gives them a starting point for their May WASDE.

Upcoming reports

I feel like we the markets have been reenacting the movie “Groundhogs Day” with Bill Murray where he wakes up every morning to repeat the same thing that happened the day before. The only difference in the markets is we are doing it week to week versus day to day. Over the last four weeks we have started out weaker only to rally at the end of the week with minimal gains. Like the previous week, last week’s rally was on the heels of strength in the soybean market. March futures ended the week 2 cents higher while May and July futures ended 3 and 5 cents higher. The funds end the week short 43,493 corn and long 115,396 soybean contracts.

On Tuesday the USDA released their February Crop Production report that gave us an update on demand and carryout figures for domestic and world balance sheets. The USDA raised domestic export projections by 100 million bushels to 3.3 billion bushels reflecting sales and shipments to date.  With no other changes noted to the domestic balance sheet, ending stocks were lowered by a similar amount to 2.127 billion bushels.  This was below both the average trade guess of 2.227 billion. The world balance sheet featured lower ending stocks with most of that coming from the U.S.  World-ending stocks were projected at 288.98 MMT, down 1.9 million from January and below the average trade estimate of 290.48 MMT.

USDA 2025/26 US Carryout (Billion Bushels)

USDA 2025/26 World Carryout (Million Tonnes)

USDA 2025/26 South American Production (Million Tonnes)

On Thursday Conab (Brazil’s version of USDA) updated its Brazilian corn crop estimate and lowered it .4 mmt to 138.5 mmt. They lowered their Safrihna (2nd crop) by 1.2 mmt to 109.3 mmt. The Safrihna crop isn’t even ¼ planted and Conab is trimming its potential. What is also interesting is that Conab has flipped its relationship with the USDA’s estimates. In the past, it was regularly a discount to USDA projections, and now it’s a premium and not just a small one.

This week we will get our first look at what the USDA is thinking on the 2026 crop. The World Agricultural Outlook Board meets February 19^th through the 20^th. This is an economic meeting where the USDA projects their supply and demand numbers for the next 10 years. The data that they will provide will be used for budgetary projections. The most important numbers the trade will be looking for are the trend yields. Normally, the trend yields they release in the forum are used in the May WASDE report when they make their first new crop projections for corn and soybeans.

Market attention will continue focus on harvest progress in South America, with production estimates still subject to change in coming reports pending field results from Brazil and Argentina.  Attention will also begin to shift towards the new-crop growing season in the U.S., with planting and field preparations already underway in Texas.

Upcoming reports