Markets Slip Despite $100 Oil, Did the EPA Just Pull the Rug Out?

The markets faded to end the week as early gains based on further crude oil rallies were wiped out after the EPA released their updated RIN/RVO guidelines. Recent bullish expectations for larger blending volumes failed to make it into the final decision. For the first week since the war started, markets lost some ground, despite crude rallying and settling just under $100 a barrel. With the month and quarter ending on Tuesday and the USDA’s quarterly stocks and prospective planting report being released, the early week trade will have plenty of information to trade, but ultimately trader’s will return to trading news from Iran.

News and Notes:

- World weather remains a non-factor as SA is in great shape for end of season development while Brazil’s start to their winter corn season is normal. US weather is making the normal change over to spring with warming temperatures, but several areas of the upper ECB need some rain before planting starts. Until the crude oil market settles down, weather will not affect price discovery.

- The new crop corn and bean charts are on Page 2 and show the positive trends since the war started. Friday’s late weakness after the EPA bio-fuel announcement took bean down to support at the 20-DMA (red line) which will be important support if prices show weakness this week. The diesel chart is bullish as expected and will be totally driven by diplomatic success or failure to end the war. The ugly Dow equity index chart wraps them up with the Dow now having fallen into correction territory for the second time in Trump’s second administration. The world equity markets do not like the outlook for high energy prices and its impact on the world economy.

- The EPA finally released their final 2026 and 2027 biofuel blending volumes by maintaining the 15-billion-gallon level. These numbers were not as bullish as had been rumored or hoped and the corn and bean markets traded lower after the announcement. One positive change was a reduced RIN tax break for imported foreign feedstocks like used cooking oil from China. In short, the update was not as bullish as the trade had expected.

- Active bombing continued over the weekend with more talk from the Pentagon that a ground invasion to protect key energy targets in Iran may occur. Until the Straits can be re-opened, prices will continue to follow crude for direction.

- The inflation trade continues to see investment into all sections of the raw material sector. With the stock market struggling, investors are looking for other sectors to invest in so managed money investment is helping support our markets.

- Weekly Changes: Corn – 3 1/2 (May ‘26), - 1/2 (Dec ‘26), Beans - 2 (May ‘26), + 3 (Nov ‘26), Wheat +8 3/4 (July ’26), Crude +141, Diesel -62, Dow -469, US Dollar + 423, Cattle + 400, Feeder Cattle + 523, Hogs -50, Cotton +206, Milk - 2 (17.22).

Until the war ends the daily commentary will be consistent with what has been discussed since the war started. It is impossible to calculate if the skyrocketing fertilizer prices will eventually hurt northern hemisphere yield, but the estimated 15-20% of the farms that have not yet secured their nitrogen needs will face some expensive and tough decisions in the weeks ahead. As of Sunday morning, there has not been a breakthrough in the cease fire talks, so expect a higher start with crude oil making another run over $100 a barrel in early Sunday night trade. Have a great Sunday.