From Panic to Perspective: Markets Find Their Footing

Another wild day of volatility in all markets as uncertainty and fear dominated the overnight and early trade before more certainty and calmer heads prevailed. World equity markets were in complete free-fall in early trade but cut their losses in by more than half while crude oil’s early $6.75 sold off sharply but closing prices were still the highest in 18-months. The grain and soy markets traded both sides with corn and beans closing higher on the strong crude markets while wheat sold off on diminishing fear of a long-term closure of the Straits of Hormuz. All markets are expected to remain volatile until the military strikes end, but as we have seen in several Middle East conflicts, these events tend to end quicker than originally expected.

News and Notes: 

- Soaking rains are falling in N Argentina which are helpful, but those same rains are hitting S Brazil and slowing harvest. Crop estimates continue to be refined but a record bean crop in SA is almost guaranteed as Brazil’s harvest enters the second half while Argentina’s early harvest is showing strong yields. A soaking rain system forecast for the drier regions of IL and IN is not providing needed rain for N Il and N IN. A lack of snow in 2026 needs to be resolved by planting.

- The daily April heating oil (diesel) chart is on Page 2 and shows the slow drive higher in prices early in 2026 and then the explosion of 85-cents plus over the last 3-days. Diesel is now $1.30 over the 2025 close but today’s sharp early rally and deep pullback into the close indicates today could be the top in diesel for now. When President Trump announced US war ships would escort oil tankers through the Gulf of Hormuz, the selling intensified. At today’s high the trade was pricing in an extended closure of the Straits on panic buying, but a quick resolution to the closure and ending the aggressive strikes on Iran (or Iran surrendering), a sizable downside in crude is present. The open chart gap on Sunday night’s open from $2.61-$2.77 is the first target to the downside. Be patient topping off your fuel tanks.

- After the weekend developments in Iran and China’s quick condemnation of the US attack, it was feared the April meeting between Xi and Trump might be cancelled. Both sides announced today that the highest-level trade representatives of both countries will meet in  Paris in mid-March. Treasury Sec Bessent will attend which gave the soy and grain markets optimism that further Chinese purchases will be negotiated. If the war in Iran ends soon, the trade meeting will move to the top of the headlines.

- Interesting facts about the Strait of Hormuz and how its closure could affect world trade and raw material prices. One-third of the world’s fertilizer and 30% of the world’s oil sail through the Strait. President Trump’s announcement of US armed naval escorts quickly quieted the talk about the worst-case scenario discussed Monday. It is not solved but has been positively addressed.

- Final February revenue-based insurance price for December corn is $4.62 with November beans at $11.09. The corn average price was 9-cents below last year while beans were 55-cents higher. With the revenue-based crop insurance changes and the impressive bean price, bean planted acres may jump more than 5 MA expectations. Please have your crop insurance agent explain this year’s changes.

- Record ethanol numbers for 2025 were announced today with total production a record 16 16.494 billion gallons which used 5.9 BBU of corn. Ethanol exports jumped to a record 2.186 billion gallons, up 245 million gallons from 2024. Our ethanol export and use market remains strong without the implementation of year-round E-15. The ethanol outlook remains strong and supportive.

While the uneasiness of any military conflict cannot be avoided, today’s trade does settle my nerves as more is known about ongoing strategy to keep the Straits open and the world energy and equity markets reacted as such. This week’s rally in corn and corn beans was driven by ethanol and soy bio-diesel’s relationship with surging crude prices, but as noted above, US ethanol production continues to make new records and shows no signs of slowing 2026. As more certainty settles on the situation, expect daily volatility to calm and prices for soy and grain to go back to their choppy trade. I remain cautiously optimistic about corn’s potential this summer but want to continue to sell rallies.