Grain Markets and Other Stuff

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🌾 Grain markets got slammed Monday, with soybeans limit down after President Trump suggested he may delay his meeting with Xi Jinping. Corn and wheat also moved sharply lower, while expanded soybean limits point to more volatility ahead.

🚛 Brazil’s soybean freight costs are rising fast as higher oil prices push diesel prices higher during peak export season. That’s creating logistical stress, hurting bids, and raising the risk that buyers shift demand to the US or Argentina.

🛢️ Crude oil pulled back Monday but bounced overnight as Middle East attacks continued and uncertainty around the Strait of Hormuz remained high. At the same time, China is tightening fertilizer exports, adding even more fuel to an already bullish global fertilizer story.

🫘 NOPA reported a record February soybean crush, while soybean oil stocks jumped to the highest level in years. Export inspections were solid overall, with soybean shipments beating expectations and China taking the majority of the load.

🥩 In the cattle market, a strike at JBS in Greeley adds another wrinkle to an already tight beef supply situation. Thanks for watching—subscribe, like this video, and drop your thoughts in the comments below.

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🌾 Grain Markets & Policy Update

President Trump told the Financial Times he “may delay” a summit with Xi Jinping amid the Strait of Hormuz closure. Trade talks between U.S. and Chinese officials continued this weekend, and China reiterated its commitment to 25 mmt of U.S. soybean purchases annually for the next three years, though soybeans fell early Monday after comments about “non-soybean row crops.”

📊 Fund Positioning (CFTC)
Speculative money continues to pile into ag markets. Funds bought 147k corn contracts, pushing the net long to the largest since March 2025. Funds also added to soybeans and SRW wheat, and private estimates suggest funds may have been record net long soybeans by Friday’s close.

🌾 Wheat Weather Concerns
Chicago wheat rallied Friday on fund buying, higher crude oil, and drought concerns across the Plains. Forecasts show little rainfall in HRW regions over the next two weeks while cold temperatures threaten SRW areas this week.

🇧🇷 Brazil Soybean Harvest
Brazil’s harvest is about 57% complete, behind last year but near the five-year average. Conab trimmed its crop estimate slightly to 177.85 mmt, still a record, citing excessive rain and uneven weather.

🧪 Fertilizer Market Developments
The U.S. approved Venezuelan fertilizer sales to help offset disruptions tied to the Iran conflict and the Strait of Hormuz closure. Despite the move, analysts say limited capacity means little short-term relief, with NOLA urea already up sharply.

🏛️ Policy & Farmer Relief
Ag Secretary Brooke Rollins says the administration is exploring multiple options to reduce fertilizer costs and acknowledged that additional farmer aid remains on the table if conditions worsen.

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🧪 Fertilizer Stocks Surge
Shares of CF Industries hit a record high Thursday, jumping as much as 14% intraday—its biggest one-day gain since 2020. CF controls roughly 40% of the North American nitrogen fertilizer market. Profit margins are likely expanding as nitrogen prices surge while the company benefits from cheap North American natural gas. Many global competitors are facing much higher gas costs or supply disruptions. Speculative buying may also be contributing. Shares of Nutrien, which controls about 22% of the North American nitrogen market, rose nearly 8%.

It’s worth noting that most ammonia and UAN used in the US is produced domestically, but the US relies heavily on imported urea—roughly 65% of supply comes from imports.

🛢️ CME CEO Warns on Government Oil Intervention
CME Group CEO Terry Duffy warned that government intervention in crude oil futures would be a “biblical disaster,” saying markets do not react well when governments attempt to influence pricing. The comments follow reports that the US Treasury may be considering actions—including possible futures market activity—to push oil prices lower. Some traders have pointed to a series of large unexplained trades this week and questioned whether government involvement could be possible.

WTI crude plunged from $119/bbl Monday to $77/bbl Tuesday before rebounding sharply.

⛽ Fuel Prices Spike
Retail gasoline prices have surged to the highest level since mid-2023. GasBuddy estimates the national average near $3.65/gal, up more than 70 cents from last month. California leads the nation at roughly $5.39/gal, while Washington, Oregon, Nevada, and Arizona all average above $4.00.

AAA estimates the national diesel average near $4.89/gal, up $1.22 from last month. Gasoline accounts for roughly 4% of the CPI basket, meaning a 25% increase in gasoline prices could theoretically add about 1% to inflation.

🚢 Oil Jumps as Strait of Hormuz Disruption Continues
Crude oil rallied sharply again Thursday. May WTI gained $8.48 to close at $95.70 while Brent settled above $100. Two tankers traveling through Iraqi waters were reportedly struck by Iranian explosives, and the Strait of Hormuz remains effectively closed. US Energy Secretary Chris Wright said naval escorts through the strait are possible by the end of the month.

🌱 Soybeans Rally to Best Trade Since 2024
Soybean futures posted their strongest trade since May 2024. The expiring March contract traded as high as $12.23 while the most active May contract reached $12.38. The rally has been fueled by optimism surrounding renewable fuel policy, improving US-China trade sentiment, and sharply higher crude oil prices.

Brazilian trade groups are also expressing concern about exports to China. Brazil recently implemented stricter pest and weed inspections after a request from Chinese authorities. As a result, Cargill temporarily halted soybean purchases and shipments to China. Industry groups are now working with officials to resolve the issue and restore trade flows.

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🌱 Brazil Soybean Export Disruption
Cargill has paused Brazilian soybean exports to China after Brazil implemented stricter pest and weed inspections at China’s request. Some shipments have failed the new standards, forcing exporters to halt purchases from farmers and causing local soybean bids to disappear in parts of Brazil.

🛢️ Iran War Drives Fertilizer Concerns
Bloomberg’s Odd Lots podcast highlighted how the Iran conflict and disruptions through the Strait of Hormuz are pushing fertilizer prices higher—just ahead of spring planting. Rising input costs could eventually translate into higher global food prices.

📈 Grain Futures Rally
Soybeans surged again Wednesday with May beans closing near $12.14. Corn and wheat also gained as crude oil rebounded and geopolitical tensions escalated, while speculation grows that higher fertilizer and fuel costs could influence US acreage decisions.

🤝 US-China Trade Talks Ahead
US and Chinese trade officials will meet in Paris this weekend ahead of President Trump’s planned China visit later this month. Markets are watching closely as analysts suggest new soybean purchases could follow.

🏭 Ethanol Production Jumps
US ethanol output climbed to an eight-week high, while inventories dropped. Margins across the Corn Belt remain solidly positive, providing support to corn demand.

🛢️ Record Strategic Oil Release
The International Energy Agency announced a record 400 million-barrel emergency oil release, but crude still rallied above $88 as markets worry about prolonged Middle East disruptions.

📊 Inflation Holds Steady
US CPI rose 2.4% year-over-year in February, matching expectations. However, the report doesn’t yet reflect the recent surge in energy prices, which could add inflation pressure in the months ahead.

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🌾 Ag Markets Lag the Commodity Boom
Agricultural markets have badly underperformed the broader commodity complex. The Bloomberg Commodity Index has surged past its 2022 peak and is up more than 19% so far in 2026, while the Bloomberg Ag Subindex (grains, softs, and livestock) has gained less than 5%. Recent strength in commodities has been driven first by gold and silver and more recently by energy markets. 

🛢️ Oil Prices Swing on Iran War Headlines
Crude oil plunged Tuesday, with WTI falling nearly 12% to $83.45, its biggest single-day drop since 2022. Confusion over tanker traffic through the Strait of Hormuz, talk of easing sanctions on Russian oil, and speculation that the war with Iran could end soon pressured the market. The IEA also proposed what would be the largest oil reserve release in history, adding more downside pressure.

🧪 Fertilizer Supply at Risk
The Middle East conflict is threatening fertilizer supplies ahead of spring planting. The Persian Gulf region accounts for nearly half of global urea exports and about 30% of ammonia exports, and disruptions through the Strait of Hormuz could tighten supply. Higher fertilizer prices may encourage farmers to shift acres away from corn toward soybeans, while rising fuel costs could further increase production expenses. 

⛽ Oil Traders Secure Credit
Major commodity trading houses are securing billions in additional credit lines from banks as energy market volatility increases. Higher oil prices raise the value of cargo shipments and can trigger large futures margin calls, increasing liquidity needs across the trading sector.

🌴 Biofuel Supply Risks in Southeast Asia
Shipping disruptions are pushing methanol prices higher in Southeast Asia, threatening biodiesel production tied to palm oil. Indonesia relies heavily on methanol imports from the Middle East, and prolonged supply issues could disrupt its blending mandates. Meanwhile, Chicago Platts ethanol futures have rallied to about $1.81/gal, with US ethanol margins positive by roughly 10–30 cents across the Corn Belt.

📊 USDA Report Mostly a Non-Event
Tuesday’s USDA report contained few surprises. US ending stocks were left unchanged. Global corn stocks increased on larger crops in Brazil, Ukraine, and India, while global wheat and soybean stocks were trimmed slightly. Brazil’s corn crop estimate increased, while Argentina’s corn and soybean crops were reduced.

📉 Bond Traders Turn Bearish
Investors have begun betting against US Treasuries as higher oil prices raise inflation concerns. The 10-year Treasury yield has climbed about 20 basis points since late February, and markets are watching today’s CPI report closely for signals on future Fed policy.