Calm Before the Storm? Markets Await High-Stakes Iran Deadline

Considering everything that could have gone on over the long Easter weekend, the start of the week’s trade was shockingly quiet. The grains and bean complex drifted on both sides of unchanged most of the day to finish slightly mixed. The energies and world equity markets were also on edge heading into the weekend but both of them were orderly with modest (relative) changes with only a short burst in crude oil back over $100 on Sunday nights open. All traders continue to closely watch the developments in Iran, but with rumors of a potential 45-day cease fire on the negotiation table, a much calmer trade could develop if that comes to fruition. With the bullish EPA bio-fuel announcement and the marginally important early planted acreage estimate from the USDA released, market direction will be directed by Iran and the next month of US planting weather.

News and Notes:

- The first half of April will see warmer than normal early spring temperatures for most of the major US planting regions. After the beneficial recent rains for the central Corn Belt, there are no areas reporting high levels of concern as the planters get rolling. SA weather remains non-threatening for Brazil’s safrinha crop early development and Argentina’s harvest.

- The July bean oil daily chart is on Page 2 and shows today’s rally to new contract closing highs. Bean oil has been the best performing market on the combination of the higher EPA bio-fuel mandates and the rally in crude oil. Just like with Dec corn and Nov bean charts, the 20-DMA (red line) has closely followed the rallies and acted as support when tested. Bean oil has been a strong leg of support for beans, but the bean meal market recently made new contract lows as the by-product of the crush. Bean meal is cheap and will be swapped for corn in the 2026 feed rations.

- Found an interesting interview that gave the normal seasonal peaks for our markets. While these dates are not exact, they do show that risk premium begins to evaporate quickly once the markets get past Memorial Day. The wheat price tends to peak on May 20th, the bean price on June 8th and the corn price on June 9th. Obviously, these are not exact dates and this year’s war adds another wrinkle, but it should give you a good goal to make sure you have high percentages of your old crop and about 50% of your new crop priced by these dates. With the increasing yield stability from the improving seed genetics and nutrient management programs, major yield losses like 2012 will be far less frequent. Your marketing plan should not rely on the USDA to help you or for a major weather scare.

- Please take a few minutes to listen to our latest podcast on Helena’s FieldLink where fertilizer costs and the markets are discussed as the war continues in Iran.

- Fertilizer prices have been a hot topic since the closure of the Straits, but there are two major countries that are more acutely impacted than the US. China and India rely heavily in urea (etc.) that come from that region. Since agricultural input procurement in those countries has more to do with the government than in the US, the next few weeks could see more diplomatic involvement from them.

- The speculative funds have been heavily involved in the day-to-day trade volume and are now heavily long a large number of raw material markets. Corn and beans currently have their largest net long fund positions (1.35 and 1.1 BBU) since the massive post-Covid inflation rally in late 2021 and early 2022. It is hard to see the funds maintaining such large positions if the Straits re-open and energy prices retreat.

Tuesday night now becomes the focus of all markets as President Trump has given a 7 pm central deadline for negotiations to reach a cease fire agreement or a new more widespread bombing plan will be implemented against Iran. While roughly 20 ships/tankers sailed through the Straits without incident over the weekend, they were given permission by Iran’s government as they were going to several countries supportive of Iran through the years. The constant uncertainty and volatility in the markets made March one of the more challenging in my career, but it presented unexpected sales opportunities which were a bonus. In 30-hours the markets will see a cease fire (good news but price bearish), another timeline extension (no change) or another show of US and Israeli military strength that could lead to more uncertainty in every market.