Week Ending 3/20/2026

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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