Grain Markets and Other Stuff

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The war in Iran poses risks to global fertilizer production and supply chains 🌍. The Gulf region hosts some of the world’s largest fertilizer plants, and roughly one-third of global crop nutrients pass through the Strait of Hormuz. While the US imports little fertilizer directly from Iran, it relies heavily on supplies from other Gulf countries shipping through the strait. Fertilizer prices—especially urea—have already risen amid disruption fears. Natural gas prices also moved higher after Qatar temporarily shut down a major facility Monday, adding pressure since gas is a key input for nitrogen fertilizer. Roughly 25% of global anhydrous ammonia exports and 20-25% of global urea exports move through the Strait of Hormuz. Many US fertilizer retailers pulled their offers yesterday due to the uncertainty.

The conflict is also influencing ag markets 🌽🫘. Soybean oil gained as much as 3.9% Monday as higher crude prices boosted biofuel demand. Soybean futures moved lower amid uncertainty regarding Chinese purchases and whether President Trump’s planned meeting with Xi Jinping later this month will occur as scheduled. Corn futures declined on concerns that disruptions to Brazilian shipments to Iran could reduce demand. Wheat futures were also lower as traders gave back last week’s gains while watching whether global grain shipments could be affected.

The conflict is beginning to impact gasoline prices ⛽. WTI crude surged 8.4% Monday to $72.74 per barrel after President Trump suggested the conflict could last longer than a few weeks. According to GasBuddy, the national average gasoline price rose 5 cents Sunday to $2.99 per gallon. The Strait of Hormuz is effectively closed, with tankers avoiding the region as insurers cancel vessel coverage. Shipping rates for oil and gas have surged, and continued disruptions could contribute to broader inflation pressures.

Brazil soybean production estimates were trimmed 🌱. AgRural lowered its forecast to 178mmt from 181mmt and reported harvest progress at 39% as of last week, well behind last year’s 50%. StoneX also cut its estimate to 177.8mmt from 181.6mmt. Both revisions were tied to drought conditions in Rio Grande do Sul. 

US ethanol production reached a new all-time high last year ⛽🌽. Output climbed to 16.5 billion gallons in 2025, up 1.7% from the prior year, supported by strong domestic demand and record exports. The national average blend rate hit 10.5%, while domestic consumption increased to 14.3 billion gallons. According to the Renewable Fuels Association, growth reflects expanded E15 sales and could increase further if Congress approves year-round nationwide E15. US ethanol exports jumped 13% year over year to 2.2 billion gallons.

US corn shipments exceeded expectations for the fourth straight week 🚢. USDA reported 1.9mmt (73m bu) of corn inspected for export during the week ending February 26—down 8% from the prior week but up 37% year over year. Soybean shipments totaled 1.1mmt (42m bu), up 67% vs. the previous week and 62% above last year. China accounted for about 65% of inspections. Wheat shipments totaled 344,272mt (13m bu), down 39% week over week and 12% below last year. Roughly 12 cargoes of US soybeans were shipped to China last week—2 from the PNW and 10 from the Gulf—totaling about 30m bushels.

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🌍 Geopolitics & Middle East Developments
Iran’s Supreme Leader, Ayatollah Ali Khamenei, was killed over the weekend following a US-Israeli strike on Saturday that also eliminated several senior Iranian officials. Authorities reported that the attacks killed and wounded hundreds of civilians. The strike came after US-Iran negotiations aimed at addressing Iran’s nuclear program ultimately failed. In retaliation, Iran launched attacks against US and Israeli bases across the Middle East and vowed to continue further strikes. 

🛢️ Oil Markets & Strait of Hormuz Closure
Oil prices surged Sunday following the US and Israeli strikes. WTI crude oil futures opened more than $8 per barrel higher and were trading about $4.60 per barrel, or roughly 7%, higher early this morning. The rally is being driven primarily by the closure of the Strait of Hormuz. Following Saturday’s attacks, Iran announced the waterway would be closed to navigation, halting the flow of oil shipments. Roughly 20% of global oil supplies typically move through the strait. 

🇨🇳 China, Energy Security & Trump–Xi Summit
The strike could complicate President Trump’s upcoming visit to China. Beijing publicly condemned the attack and warned it could further destabilize the Middle East. Despite its strong rhetoric, China is not expected to intervene militarily. The Trump–Xi summit scheduled for later this month is still expected to proceed, though major breakthroughs appear unlikely. China imports about 14% of its crude oil needs from Iran and accounts for roughly 80–90% of Iran’s oil exports, as sanctions limit purchases from other countries.

🌾 Grain Markets React to Geopolitical Risk
Wheat futures surged on Friday. The Chicago May 2026 contract rose 17 cents to close near $5.92 per bushel, its highest level since July 2025. The rally was fueled by heightened US-Iran tensions that triggered short covering by the funds. Corn and soybean futures also moved higher, with May corn gaining about 5 cents to settle near $4.49 per bushel and May soybeans rising roughly 7 cents to close near $11.71 per bushel. Traders were clearly anticipating a potential weekend escalation on Friday. Grains showed some early strength overnight but were mostly steady early this morning.

📊 Fund Positioning – CFTC Commitment of Traders
The CFTC released its weekly Commitment of Traders report on Friday. For the week ending February 24, large money managers were net buyers of 29,000 corn contracts and net buyers of 12,000 soybean contracts. Funds were also net buyers of 52,000 SRW wheat contracts during the week. The net short position in SRW wheat shrank to 18,000 contracts, the smallest since October 2022. Private estimates suggested funds held a net long of about 25,000 wheat contracts at Friday’s close, along with a net long of roughly 180,000 soybean contracts and a reduced SRW wheat net short of about 10,000 contracts. 

🌽 Crop Insurance Prices & Acreage Outlook
This year’s crop insurance pricing provides improved coverage for soybeans, while corn faces greater downside risk. The spring projected soybean price is $11.09 per bushel, up 55 cents from last year. The corn projected price declined 8 cents to $4.62 per bushel. Spring wheat’s projected price stands at $6.19 per bushel, also 55 cents higher year over year.

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🇺🇸🇧🇷 US vs Brazil Soybean Profitability
This week, the University of Illinois farmdoc team broke down a critical difference between US and Brazilian soybean economics. Brazil’s costs are heavily tied to direct inputs like fertilizer, while US producers face far larger overhead expenses driven by elevated farmland values. Brazilian production costs surged from 2020–2024 due to fertilizer inflation and currency weakness, yet profitability held up thanks to strong prices and export demand. US margins were far less stable, contributing to losses in multiple years.

📈 Soybean Market Update
Soybean futures pushed higher Tuesday, with strength linked to easing fears surrounding US tariff policy and China demand. The market continues to weigh the potential impact of evolving trade policy, while rumors of Chinese PNW business circulated. Traders remain cautious but attentive to any confirmation of export activity.

🌽 Corn & Wheat Trade
Corn futures were slightly lower. Chicago wheat was mostly steady as traders monitored persistent dryness across key HRW regions. Weather remains the dominant driver, with warm and windy conditions stressing parts of the Southern Plains, though rain chances loom further out.

🌦️ Weather Watch
Forecast models keep much of Kansas and surrounding wheat areas dry near-term, while temperatures run well above normal. Moisture prospects in the extended window remain a focal point for price direction.

🧪 Fertilizer & Tariff Policy
Most fertilizer imports remain exempt under the latest tariff framework. Key products like ammonia, sulfur, and sulfuric acid face minimal disruption, largely due to Canadian dominance in US import flows.

₿ Bitcoin Sentiment
Investor confidence remains fragile. A large share of supply is now underwater, reinforcing a pattern where rallies encounter selling pressure. Despite price weakness, ETF positioning suggests longer-term holders have not fully exited.

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Trade drama is back in the headlines. President Trump is threatening higher tariffs on countries that fail to honor trade agreements. Following last week’s Supreme Court ruling, the EU announced it would pause ratification of its agreement, while India is deferring talks on its own deal. Despite the legal setback, the White House says it remains committed to its trade agenda and is exploring alternative tools to implement tariffs. Markets clearly reacted to the renewed uncertainty, with stocks under pressure to start the week.

Grain markets felt the ripple effects. Soybean and wheat futures moved lower Monday as traders weighed the potential impact of trade disruptions and retaliation tied to the newly announced 15% global tariff. Corn futures, meanwhile, managed to hold steady. When policy uncertainty rises, volatility often follows — and that theme remains firmly in play.

Export data offered a few surprises. US corn shipments exceeded expectations for the third straight week, posting a very strong year-over-year gain. Wheat inspections also came in above trade guesses. Soybean shipments, however, disappointed and continue to reflect uneven demand patterns. China remained a major buyer, accounting for roughly half of weekly inspections.

USDA also reported a fresh flash sale of corn to Colombia, adding to an already solid sales pace this marketing year. Demand for US corn has been a notable bright spot recently, especially when compared to other segments of the export complex.

Weather and field conditions remain a major talking point in South America. Brazil’s soybean harvest is advancing at its slowest pace in several years, with rains and longer crop cycles creating delays. Planting progress for Brazil’s second corn crop is also lagging last year’s pace, which could become increasingly important for global feed grain supply expectations.

Outside of grains, US consumers continue to show remarkable resilience in the face of high beef prices. Despite record price levels, demand remains strong as buyers adapt by shifting toward more affordable cuts and smaller portions. The protein story remains a powerful force across the broader agricultural landscape.

As always, volatility, policy, and global production trends remain key market drivers.

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Soybean markets started the week wrestling with fresh tariff drama. The Supreme Court struck down the administration’s prior global tariffs, ruling that the use of emergency powers was unlawful. Shortly afterward, the White House announced a new blanket tariff approach, creating another wave of uncertainty across financial and commodity markets. The key question for agriculture remains unchanged: how will this impact trade flows and demand, particularly from China? Earlier signals pointed toward stronger soybean buying interest, but policy volatility continues to cloud the outlook.

Meanwhile, USDA is preparing to roll out a major round of farm assistance through the Farmer Bridge Assistance program. The application window opens today, with payments expected to move quickly. Market participants will be watching closely to see how the agency handles what could be a surge in producer enrollment. The program arrives at a time when farm margins remain under pressure and policy uncertainty is elevated.

Export demand signals were mixed in the latest weekly data. Corn demand continues to hold up relatively well despite some week-to-week variability, while soybean and wheat sales showed uneven momentum. Traders remain highly sensitive to shifts in global demand and competitiveness.

The latest Commitment of Traders report showed funds adding to positions across the grain complex, with soybeans drawing particular attention. Positioning trends remain an important driver of short-term price movement, especially in an environment dominated by macro headlines.

In livestock, the latest Cattle on Feed report landed near expectations and was generally viewed as neutral. While placements data offered some supportive elements, the overall numbers did not point to a major shift in supply outlook.

Lots to unpack this week as markets digest policy developments, demand signals, and fund activity. Stay tuned.

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Welcome back 🌾

Wheat futures pushed sharply higher on Thursday, fueled largely by short covering as traders reacted to drought and high winds across the US Southern Plains. Weather risks remain front and center, with ongoing concerns about potential crop stress in key HRW regions. There was also chatter surrounding possible issues with Ukraine’s wheat crop. Chicago and Kansas City contracts both posted solid gains. The Climate Prediction Center added another layer of support with updated seasonal outlooks calling for a warm and dry pattern across much of wheat country. While long-range forecasts always deserve some skepticism, the market clearly paid attention.

🌱 USDA Acreage & Production Outlook
USDA projects an increase in soybean acreage this season, while corn acres are expected to decline. Soybeans are viewed as offering stronger relative profitability, helping drive the shift. Despite fewer corn acres, production is still forecast to be massive. Wheat acreage is seen slipping slightly.

⛽ Ethanol Production & Margins
US ethanol production moved higher last week, and stocks also increased. Margins reportedly strengthened across much of the Corn Belt, a supportive signal for corn demand. We’ll take a look at what’s driving profitability and why this matters.

🚢 Ethanol & DDGS Trade
Ethanol exports surged to one of the highest monthly totals on record, capping off a year of very strong international demand. DDGS shipments also remained robust. Trade flows continue to play a critical role in demand dynamics.

🚜 John Deere Shares Surge
John Deere shares posted a stunning rally following earnings. The company exceeded expectations and raised its income outlook. Management commentary hinted at stabilizing farm economics and potential improvement in equipment demand.

🛢️ Crude Oil & Geopolitics
Crude oil climbed to multi-month highs amid escalating US-Iran tensions and renewed concerns surrounding the Strait of Hormuz. Energy markets remain extremely sensitive to geopolitical developments.

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🌽 Ag Outlook Forum – Acreage & Yield Estimates
USDA will release its first look at 2026 acreage and yield projections this morning at the Agricultural Outlook Forum. Analysts expect corn acreage near 94.9 million acres with production around 15.9 billion bushels. Soybean acreage is forecast near 84.9 million acres with production pegged at 4.4 billion bushels. Wheat acreage is projected at 44.8 million acres with production near 1.9 billion bushels. These numbers often set the tone for new-crop expectations and market psychology.

🚜 NCGA Warns of Farm Financial Stress
The National Corn Growers Association released a report emphasizing mounting financial pressure across US agriculture. The group argues that many corn farmers are facing multiple years of negative margins amid rising costs and increased volatility. Long-term consolidation trends continue as productivity gains fail to consistently translate into profitability. Off-farm income remains critical for many operations. Demand growth and supportive policy remain central themes.

🌾 Wheat Strength – Weather Concerns
Kansas City wheat futures posted fresh multi-month highs overnight, with nearby contracts reaching their best levels since late summer. Comments from Ukraine’s farmers union regarding winter wheat risks following a thaw and cold snap helped support prices. Wheat continues to show relative strength compared to corn.

📊 Corn & Soybean Price Action
Soybeans briefly traded into fresh multi-month highs, while corn futures remain sluggish ahead of First Notice Day. Spreads, positioning, and technical flows are all in focus as traders manage delivery risk and roll activity.

⛽ E15 Policy Push Continues
Ag groups continue pressing for year-round nationwide E15 sales despite missed legislative deadlines. Advocates argue expanded blends would boost corn demand and potentially reduce fuel costs. Market participants continue to monitor Washington for movement.

🌧️ South American Weather Update
Recent rains improved soybean conditions in southern Brazil and brought relief to dry Argentine areas. Additional precipitation could disrupt harvest pace and second-crop corn planting. Brazilian production estimates remain historically large.

🚢 Argentina Strikes & Logistics
Labor strikes are temporarily disrupting Argentine grain shipments. While these events frequently generate headlines, they historically produce limited lasting impact on global price trends.

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🌱 Biofuel Mandates & Soybean Strength
The EPA is expected to submit its proposed biofuel blending quotas for 2026 to the White House for final review in the coming days. The Trump administration is working to finalize the delayed mandates by the end of March.

Earlier proposals pointed to a sizable increase in total biofuel volumes and a sharp jump in the biomass-based diesel target. While the agency is now considering a slightly revised range for biomass-based diesel, the numbers still imply substantially stronger demand compared to prior years.

Both old and new crop soybean futures pushed to multi-month highs overnight. Biofuel optimism — combined with ongoing Chinese demand optimism — continues to support prices despite the advancing Brazilian harvest.

🌽 Corn Market Pressure
Corn futures moved lower Tuesday, pressured by improving crop conditions in Argentina following recent rainfall. Weather developments in South America remain a key driver for global feed grain markets.

🌾 Wheat Faces Global Headwinds
Chicago wheat futures also weakened. Pressure stemmed from an increased Russian crop outlook and news that India will allow limited wheat exports. Seasonal demand softness tied to the Lunar New Year added additional weight to the market.

🚢 Port of Los Angeles & Soybean Flows
U.S. soybean shipments to China through the Port of Los Angeles remain extremely light. Flows through the port fell sharply last year and showed little recovery late in the year.

The Port of LA typically handles only a very small share of total U.S. soybean exports. The Gulf continues to dominate shipment volumes, followed by the Pacific Northwest. Brazilian soybeans remain competitively priced on the world market, influencing global trade flows.

📦 Export Inspections Update
U.S. corn shipments exceeded expectations for the second straight week, while soybean inspections remained strong and near the upper end of forecasts. China accounted for a significant portion of weekly soybean movement. Seasonal export patterns remain important to monitor.

🛢️ NOPA Crush & Soybean Oil Stocks
NOPA reported a record January soybean crush for the month. Processing margins and domestic demand continue to drive historically large crush volumes.

Soybean oil stocks increased sharply and now sit at their highest level in quite some time—an important factor for biofuel and vegetable oil markets moving forward.

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🌽 USDA Long-Term Projections (Out to 2035)
USDA released its annual baseline projections, and the acreage outlook immediately caught traders’ attention. The agency pegged 2026 corn acres at 95 million, sharply lower year-over-year, while soybean acres were projected at 85 million, implying a notable shift toward beans. Also raising eyebrows: USDA does not project an average farm price for corn above the mid-$4 range at any point through 2035. These projections assume “normal” conditions and are intended for planning and budgeting, but they often influence long-term sentiment.

🚜 The Future of US Farms & Ranches
A major Wall Street Journal feature highlighted a growing structural issue in American agriculture: succession. A large share of farms reportedly have no clear next-generation operator, while the producer population continues to age. Consolidation trends remain strong, with more operations being sold or leased to larger entities. Over time, this could accelerate the shift toward landlord-tenant and contract production models, reshaping rural communities and land markets.

📊 Fund Positioning – CFTC Commitment of Traders
Money managers were active buyers again. Funds added to net long positions in both corn and soybeans, with soybean length expanding to its largest level in weeks. Wheat, meanwhile, saw modest selling pressure. Changes in speculative positioning can heavily influence short-term price behavior and volatility.

🇧🇷 Brazil Crop & Planting Progress
Brazil’s soybean harvest remains slower than last year amid persistent rainfall delays. Safrinha corn planting is also trailing the prior pace. Weather-related slowdowns at this time of year often feed into global supply expectations and can influence export competition dynamics.

🇺🇸🇨🇳 US-China Trade & Soybean Demand Signals
Diplomatic engagement between US and Chinese officials continues ahead of the anticipated Trump-Xi meetings later this spring. Reports of a potential extension of the trade truce have supported optimism regarding Chinese demand for US soybeans. Markets remain sensitive to any indications of purchase targets, policy shifts, or rhetoric changes.

🔥 Energy Markets – Natural Gas Pullback
Natural gas prices have eased following a warmer weather outlook after January’s weather-driven rally. Storage deficits persist, however, providing underlying support. Energy markets can indirectly influence fertilizer, input costs, and broader commodity sentiment.