MARKET DRIVERS

Crude Oil and the Iran War: The Week's Dominant Macro Anchor

Crude oil's surge to $112.06 per barrel by Thursday - after President Trump's Wednesday address signaling 2 to 3 more weeks of strikes against Iran and uncertainty over the Strait of Hormuz - was the single most powerful macro event of the week. Higher energy prices cut directly across the grain complex in multiple directions: they inflated fertilizer and diesel costs for farmers worldwide, elevated freight and war-risk insurance premiums for global grain shipments, and simultaneously boosted the biofuel value of corn and soy oil. The market closed Friday (Good Friday) and will resume with a normal Sunday night open, leaving traders to digest the full macro picture over the long weekend.

Record US Biofuel Mandate and Global Policy Cascade: Structural Demand Support for Corn and Soy Oil

Monday delivered a foundational shift for long-term demand: the Trump EPA finalized a record 25.82 billion gallon biofuel blending mandate for 2026, nearly 8% above the June proposal, requiring refiners to mix more corn-ethanol and soy oil-based biodiesel into the nation's fuel supply. ADM shares jumped as much as 2.6%, Bunge added as much as 4.6%, and Green Plains rose as much as 8.7% on the news. Simultaneously, Indonesia confirmed it will raise its palm biodiesel blend to B50 on July 1 - driving palm oil benchmark futures to their highest close since December 2024 - while Argentina expanded the voluntary ethanol blend ceiling to 15%. These three moves together tightened the global vegetable oil balance materially, with Malaysian palm oil inventories falling 19% to an eight-month low in March per a Bloomberg survey, and soy oil positioned as a direct beneficiary as refined vegetable oil alternatives face war-related supply disruptions.

USDA March Plantings and Grain Stocks: A Mixed Report That Gave and Then Took

Tuesday's USDA Prospective Plantings and Grain Stocks reports acted as the week's pivot. All-wheat acreage came in at 43.775 million acres - 0.905 million below trade estimates and 1.553 million below last year - triggering a broad rally across the three wheat exchanges. Corn plantings of 95.338 million acres were above the average guess of 94.37 million, but analysts immediately cautioned the survey (conducted in the first two weeks of March) could not fully reflect war-driven fertilizer cost increases; USDA may revise the number lower. Soybean acres at 84.7 million were below the trade estimate of 85.55 million. March 1 corn stocks came in 89 mbu below the average guess, while soybean stocks beat both Bloomberg and Reuters survey estimates. The initial bullish reaction across all three markets reversed sharply Wednesday and Thursday as traders locked in profits, with corn and wheat both giving back most or all of the Tuesday gains.

Fertilizer Crisis: Reshaping Planting Decisions Globally

Tampa CFR Ammonia prices rose 26% in the week ended March 27 to $775 per metric ton, up 24% in the prior month, as the Iran war severed critical nitrogen supply routes from the Gulf. The cost shock is already altering acreage decisions: US farmers are favoring soybeans (low nitrogen requirement) over corn, Australian farmers are expected to shift 10% to 12% of wheat area toward less fertilizer-intensive barley, and Brazilian agronomists advised farmers to defer fertilizer purchases. Urea prices in Australia surged roughly 60% since the war's start, while Australian diesel prices are up 88% over the same period. These input cost shifts structurally support soybeans relative to corn and wheat for the upcoming planting season and bear watching as the marketing year progresses.

Wheat Exports: A Marketing Year Low for US Old Crop as Russia Seizes Market Share

US old crop wheat export sales for the week ending March 26 were a marketing year low of 23,521 MT - a stark bearish signal for nearby contracts - with Mexico posting net cancellations of 56,200 MT. New crop sales were a marketing year high at 272,839 MT, led by Mexico and South Korea, suggesting demand is shifting forward but providing no near-term price support. Meanwhile, Russia exported approximately 4.6 million tons of wheat in March alone, more than double the year-earlier pace, according to Interfax; Rusagrotrans placed the figure close to the 2024 record of 4.89 million tons. Egypt remained the dominant buyer at over 1 million tons. Russia's July-to-March total is now 37.7 million tons, ahead of the prior year's 36.3 million tons for the same period - a persistent competitive headwind for US wheat through the remainder of the marketing year.

South America: Record Brazilian Soy Nears Completion, Safrinha Corn at Risk, Argentina Harvest Begins

Brazil's soybean harvest advanced from 73% at the start of the week to 75% by mid-week on improving weather, with LSEG pegging production at 178.1 million tons - fractionally below USDA's 180 million ton estimate but still a record pace. The harvest lagged last year's 81-82% completion rate at the same point, though it remained near the five-year average. The larger concern was the safrinha (second crop) corn outlook: Central-West Brazil, the primary growing region, was facing drier-than-normal conditions that risked elevating drought stress for the 2nd crop, with AgRural trimming its Brazil corn estimate to 135.7 MMT. In Argentina, the soybean harvest was moving into its opening phase amid volatile weather - heavy rains arriving ahead of maturity risk delaying drying and increasing mold; Argentina's production estimate held at 47.4 million tons. Cofco International confirmed it was loading the first Argentine corn shipment to China in over 15 years, a sign of accelerating South America-to-China flow that competes directly with US corn origin.

India Demand Destruction: War-Driven LPG Shortage Cuts Vegetable Oil Imports

A significant and underappreciated bearish signal for soy and palm oil came out of India, where LPG shortages driven by the Iran war are forcing restaurants and food-service operators to scale back, cutting vegetable oil consumption by an estimated 250,000 to 300,000 tons per month. India's edible oil imports fell to roughly 1.18 million tons in March, down from 1.32 million tons in February, with domestic edible oil prices rising as much as 17% over the past month. India's palm oil imports specifically fell nearly 19% to 689,000 metric tons in March, a three-month low. Sustained demand destruction at this scale from the world's largest vegetable oil importer introduces downside risk to soy oil prices should the war and LPG shortage persist.

US Weather: Winter Wheat Conditions Weakening, Rains Favorable for Planting but Not Fieldwork

CROP FUTURES WEEKLY WRAP

Wheat

May 2026 CBOT SRW wheat opened the week at $6.07 on Monday before rallying sharply on Tuesday's bullish USDA acreage data to close at $6.16 1/4. The move proved short-lived: Wednesday's reversal drove futures back down 12 1/4 cents in early trade, and by Thursday's close (Good Friday pre-holiday session), May settled at $5.98 1/4 - finishing the week down 6 3/4 cents. KC May HRW fell 17 cents on the week, the worst performer among the three wheat exchanges, while MPLS May spring wheat managed a 1 1/2 cent gain. The dominant bearish theme was the marketing year-low old crop export sales figure of 23,521 MT versus Russia's near-record March shipment pace; the narrow Tuesday rally driven by acreage undershoots failed to sustain against the weight of poor export demand fundamentals and profit-taking pressure.

Corn

May 2026 CBOT corn began the week at $4.55 3/4 on Monday under pre-report pressure before posting a 2-cent gain to $4.57 3/4 on Tuesday following friendlier-than-expected old crop stocks data. The market reversed sharply, falling 5 cents by Wednesday morning and closing the holiday-shortened week at $4.52 1/4 - down 9 3/4 cents on the week, with December also shedding 9 cents. February Census data showed a record monthly corn export shipment of 6.77 MMT and record ethanol shipments of 794.45 million gallons, providing structural demand support. However, the Cofco-led first Argentine corn shipment to China in over 15 years, zero new crop US corn sales to China this season, and analyst warnings that the 95.338 million acre planting estimate will likely be revised lower as Iran war fertilizer costs bite further, together capped any upside recovery. The USDA February crush of 424.8 million bushels of corn for ethanol confirmed a 0.73% year-over-year gain, broadly in line with the record biofuel quota direction.

Soybeans

May 2026 CBOT soybeans were the complex's relative outperformer, closing Monday near $11.59 3/4 before rallying to $11.71 on Tuesday's above-estimate stocks data and biofuel demand optimism tied to the EPA mandate announcement. The contract pulled back to close Thursday at $11.63 1/2 - still up 4 1/4 cents on the week - as soy oil futures surged 100 to 183 points on Thursday alone on Indonesia's B50 announcement and the broader palm oil supply squeeze. May soymeal fell 10 cents on the week as near-term crush demand remained firm (February USDA crush came in at 214.2 million bushels, 13% above year-ago levels), but India's demand destruction capped gains. Brazil's near-record harvest output of 178.1 million tons, strong export pace with March shipments tracking 15.86 million tons, and the incoming Argentine harvest together represent a heavy supply overhang; however, the structural soy oil demand story tied to global biofuel mandates and the Iran war energy premium continues to underpin new crop sentiment.