Peace Hopes Pressure Corn and Beans as Wheat Breaks Away on Weather Concerns

Sharply lower crude oil prices on the possibility of more peace talks in the days ahead pressured corn and beans while wheat rallied on poor US wheat crop conditions. In the same inverse trade as the last month, world equity markets moved sharply higher for the tenth of the last eleven trading sessions as traders share increasing optimism that the war with Iran will soon end. With a fast start to US planting and no meaningful world weather threats, price discovery is returning to just the fundamentals rather than fear of a larger world disruption from the closure of the Straits. US bean crush numbers for March will be released on Wednesday with ripples from Iran news influencing other markets.

News and Notes:

- A drier outlook for the wettest areas of the Midwest and Corn Belt continues to show up in the 10-14-day forecasts while seasonal to above average temperatures are consistent through the Corn Belt. One region to watch is the SW Plains and its wheat crop where drought has stunted emergence and early growth, but a wetter outlook is in the 10-14-day outlook. US weather forecasts lean bearish, while current conditions are neutral. There are no SA weather issues currently.

- The daily December corn chart is on Page 2 and shows the loss of momentum since crude oil prices topped and a larger than expected planting intention number was released. With a solid start to the US corn planting season, falling crude oil prices with market expectation of more weakness and funds long over 1.1 BBU, the chart has been on a slippery slope and now squarely in mid-range for the 2026 price action. History tells the market that fast starts to US planting will almost always add additional planted corn acres, and  if that happens and US planted acreage ends up at 97 MA or more, it will take a substantial weather issue a sub-180 yield concern to keep the funds actively involved in defending their longs. If the US plants 96 MA and has a trendline yield of 184 BPA, the resulting 16.25 BBU crop would keep pressure on prices through the summer.

- Details continue to be released about just how close a lasting cease fire with Iran was over the weekend which has lessened tensions in many markets. The sticking point came down to Iran wanting to restart their nuclear program in 5-years, while the US wanted 20-years. With negotiations trying to be re-started within the ceasefire window, the chances of a meaningful lasting peace deal are high. Iran’s return to normal business and port traffic is very important as they import an average of 380-420 MBU of corn annually.

- US planting progress was released on Monday with a record 6% of the US bean crop planted through Sunday with corn at 5%. Exceptional progress has been made in the Delta with the early planted crops expected to be harvested by Labor Day, solving any pipeline tightness before Midwest harvest. The bullish surprise in the crop condition report was another drop in US wheat conditions to 34% G/E. The bulls wanted a slow/wet start to the US planting season and  so far, they are not getting it.

- Corn had a solid early bounce on strong flash sales announcement to Mexico, but that momentum faded on reports from the Rosario Grain Exchange that Argentina’s harvested corn yields are on pace to produce a crop 400-500 MBU above last year to add to the world’s exportable supply. The world needs to see corn demand expand if every major producer is going to try to outyield low prices and push toward more record crops.

Looking at the entirety of the world's raw material and equity markets, you would think a cease-fire and a peace plan had been agreed to, and all is back to normal. Unfortunately, that is not entirely true as the ceasefire agreement ends in a week which would not upend everything, but it would slow down the recent enthusiasm that all is well in the world. Corn (ethanol) and bean oil (biodiesel) will remain sensitive to any major moves in crude oil, so expect some volatility until a peace plan is signed. If US weather allows the crop to continue being planted at an above average pace, any bullish news will be muted as the traders exit their long positions and extract risk premium from prices.