Panic, Reversal, and the Price of War

There have been very few dull days during 2026 with this administration and having the bombing coincide with new week and new month trade made it even more volatile. After sharply higher overnight markets, prices faded over the day session as the trade went from panic trading in every market sector, to taking a more levelheaded approach that the rallies were hedging opportunities in many raw material markets while the equity markets provided deep discounts from recent record highs. The volatility the rest of the week should be less but follow the energy markets as they will be the quickest to respond to news from Iran with all others following.

News and Notes: 

- SA weather remains non-threatening with a non-stressful forecast into mid-March. This week will be key for the driest areas of the I states as a soaking storm is forecast.

- The July wheat daily chart is on Page 2 and shows today’s massive volatility from a sharply higher open to a sharply lower close with the close 15-cents off the highs after making a new 9-month high in the overnight trade. Shocking events always induce stomach-churning volatility and huge volume. The massive fund short-covering last week pushed the fund position to an almost 4-year high back to a flat position. The events in Iran and the Straits of Hormuz in the coming weeks will determine if today’s massive reversal is a long-term high, much like re-opening of the Black Sea wheat exports about 6-months after Russia’s invasion, despite the war still raging.

- Cattle put in a solid trade after trading sharply lower in early trade from Friday’s negative momentum but rallying late to post gains in both live and feeder. There was no news on the JBS strike which will be more important than the war in Iran for beef prices.

- An extended and expanding bombing on Iran will have the most impact on the energy markets. With Iran announcing they have closed the Straits of Hormuz , energy prices closed sharply higher but well off the overnight highs. The Straits closure is important because 30% of the world’s oil and 20% of the natural gas ship through the Straits. Diesel was 30-cents higher, unleaded gas was 8-cents higher while natural gas traded over 3-cents but still well off the cold US winter highs from late-February.

- 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 all the particulars of this year’s changes.

- China and Russia strongly condemned the US/Israel attack and China will be using this a negotiating tool for the Trump/Xi meeting in early April. Talk today was China would cancel the meeting, but that is unlikely to happen as they know Trump will react aggressively with sanctions and the other non-tariffs that the Supreme Court did not find illegal last week. One interesting note about China, is that they get a very large portion of their oil from Iran and the other countries affected by a potential Strait of Hormuz long-term closure.

- With the crop insurance prices set and the sizable rallies so far in 2026, please call us if you are looking for option strategies for re-ownership or setting floors.

- A further rally in crude oil and potential help from the EPA’s recommendations on RVO and SRE mandates will support the bio-fuel markets of bean oil and ethanol and bean and corn prices.

Trading military world-wide conflict is heart-breaking because you know there is family losing a loved one, but that is an unfortunate part of our industry. My bottom-line for the next week is continue to sell rallies if you are behind, and if this conflict ends earlier than expected, you better be quick. For those who have caught up on sales, price setbacks over a few days will give you great opportunities to buy some re-ownership or courage calls for the coming growing season and a potential long-drawn out conflict in Iran and rising energy prices. My most important re-ownership market is new crop corn.