As Oil Breaks, Are Grain Markets Losing Their War Premium?

The new month started with generally lower trade in the raw material and ag markets as apparent progress in ending the war sent crude to another day of sharp losses while world equity markets rallied sharply for the second day in a row. After Tuesday’s USDA acreage update was largely uneventful and with no major world weather concern, the grain and soy sectors went back to following the energy markets and diplomatic developments in Iran. With Friday closed for Good Friday and a three-day weekend for Easter, Thursday’s trade will close out the week with a little more confidence the Straits will be opening sooner rather than later, but still nervous that the long weekend could see reversals in several key areas of the war.

News and Notes:

- Early beans started going in parts of the southern Ohio Valey this week and the insurance first planting dates are getting closer with no major concerns for early planting. Normal volatile spring weather is expected, but some additional rain would not bother anyone in the drier parts of the Corn Belt. SA lacks any weather concern as soy harvest and safrinha planting end in Brazil while early harvest starts in Argentina.

- The daily May crude oil chart is on Page 2 and shows the initial panic buying on the first Sunday night trade of the war (March 9th) and the slow, choppy trade until the last 2 days sharp break. The interesting thing about this chart is that the 20-DMA (red line) has acted as support for all of 2026. That support may keep some support under a deeper break, but when the Straits are re-opened, crude prices should begin to work their way back into the $70-$80 range. Only buy diesel as needed during planting, because diesel prices should fall $1 or more a gallon when crude finally breaks.

- Expect more volatility in the overnight markets as President Trump addresses the nation on Iran. His flair for the dramatic and going off-script will be key parts of his impact on the markets.

- New crop corn fell to new 2-week lows but did bounce and close well off the daily lows. November beans found support at the 20-DMA but still traded inside of Tuesday’s wide range. New crop will be less sensitive to energy price volatility as planting gets underway in a very uncertain fertilizer market.

- Both live and feeder cattle jumped higher again today to test the 2-month highs. Part of the rally was the sharp rally in the equity markets, good US economic news, followed by the general bullish setup of the low cattle numbers.

- One very interesting fact about Tuesday’s USDA planted acreage guess was that an all-time low of 37.6% of farmers responded to their intentions survey. This is another reason why this report should not be put out until the June 30th quarterly stocks report.

Explaining the daily moves has been pretty easy since the war started and that should continue until the Straits re-open and/or a significant weather problem develops during northern hemisphere planting or Brazil’s safrinha corn crop pollination. Easter weekend is always an important inflection point for the US planting season, but this year’s long weekend holds the importance of what goes right or wrong in Iran. As we have seen over the last 2-days, if the world markets get comfortable the war will end and the Straits will re-open, crude will accelerate this week’s losses with early targets back in the $70-$75 a barrel range. Today’s close was $89. The sales made on the rallies of  the last 2-weeks may prove to be the best of the year, as a fast-planting pace in the US over the next 6-weeks will almost certainly lead to more corn. Continue to sell unexpected rallies and use this week’s trade as a warning of just how quickly the rallies can vanish.