Corn continued its downward trend this past week as corn and crude oil continue to diverge from each other amid potential talks between the US and Iran. May corn ended the week 11 cents lower while July and December futures are 12 and 9 cents lower respectively. The funds sold close to 40,000 contracts to end the week long 182,476 corn contracts. The funds had little movement in their soybean position, ending the week long 192,805 contracts.

On Thursday the USDA released their April WASDE report that as expected was neutral for corn and soybeans. For corn, there were no changes from the previous month. Domestic ending stocks remain at 2,127 million bu.  This was below the average estimate of 2,143. On the world balance sheet, global ending stocks are forecast slightly higher at 294.81 MMT. Corn exports and ethanol demand remain on track to meet the USDA projections for the year. Despite some demand increases at the global level, world ending stocks climbed 2 mmt.

The US and Iran appear to have a ceasefire, but it still feels tenuous and crude oil continued to trade that way last week. Despite big moves in oil, the corn markets appear to be separating themselves from the volatility of crude for the time being. Despite corns connection to the energy market, I believe this separation is supported by the lack of any fundamental change in the size of last year’s crop and the carryout we are looking at. Until new crop corn fails to meet current estimates, old crop corn will struggle to rally.

Look for the markets focus to shift to early season planting progress and next month’s WASDE where the USDA will publish its first balance sheet for the 2026/27 crop year.

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A slightly bearish USDA report and comments about the war’s potential de-escalation kept pressure on the markets this past week. Corn ended the week 10 lower in the May and July contracts and 9 lower in the December contract. The funds are long 266,630 corn and 200,350 soybean contracts.

In last weeks WASDE report, the USDA pegged 2026 corn acreage at 95.338 million acres, slightly above the average estimate of 94.481 million acres. Corn acres in 2025/26 totaled 98.788 million. If realized, 2026 planted acres would represent a decrease of 3.450 million acres, or 3.5 percent year over year. Roughly 2 million of those acres came out of 5 states: Iowa, Illinois, Nebraska, Minnesota and South Dakota. Historically, corn acres harvested for grain average 91.8% of the planted area so roughly 87.5 million acres would be harvested this year. Using trendline yields from the Ag Outlook Forum last month of 183.0 bpa, this would imply a production estimate of 16.013 billion bushels versus 17.021 billion in 2025. Assuming similar demand, stocks next year will drop below 2 billion bushels, but remain adequate to meet anticipated demand, but have little margin for error if weather problems occur during this growing season. Official demand forecasts will be made available in the May WASDE report that will be out on May 12th.

Corn stocks came in slightly below expectations, suggesting that either the USDA overstated the size of last year’s crop or demand was up in one or more categories during the first quarter. Despite coming in lower, this years March stocks report was a record high at just over 9 billion bushels. This was an 11% increase over last year and beat the previous record (2023/24) by 677 million.

USDA March 1 Stocks (Billion Bushels)

USDA 2026 Prospective Plantings (Million Acres)

On Friday President Trump warned Iran that they need to open the Strait of Hormuz by his Monday deadline or face severe consequences. Trump called Iran beaten and completely decimated in the war, but the downing of two US warplanes on Friday and Iran’s call to find the “enemy pilot” appear to have again raised the stakes.  “The doors of hell will be opened to you” if Iran’s infrastructure is attacked, Gen. Ali Abdollahi Aliabadi with the country’s joint military command said late Saturday in response to Trump’s renewed threat, state media reported. In turn, the general threatened all infrastructure used by the U.S. military in the region. Based on these comments

I would expect the markets to open stronger on Monday when we resume trade following the holiday weekend.

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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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