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)
| USDA March | Average Trade Est. | USDA February | |
| Corn | 2.136 | 2.127 | |
| Soybeans | .344 | .350 | |
| Wheat | .926 | .916 |
2025/26 World Carryout (Million Tonnes)
| USDA March | Average Trade Est. | USDA February | |
| Corn | 289.19 | 288.98 | |
| Soybeans | 124.74 | 125.51 | |
| Wheat | 277.53 | 277.51 |
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
| Date | Report |
| 3/10/2026 | Crop Production |
| 3/31/2026 | Grain Stocks/Prospective Plantings |
