Headlines
- Competing For Acres: A battle for acres has been driving grain markets over the past week as Spring planting approaches. New-crop corn worked its way back up to the $4.70s per bushel merely off of strength in new-crop soybeans. Tighter cash flow will have many growers looking closely at input costs. USDA’s initial projection included fewer corn acres than last year, but the Prospective Plantings report out at the end of the month will give another look at acreage estimates.
- Brazilian Beans Face a Bottleneck: Soybean harvest in Brazil’s Mato Grasso region is approaching 80% complete, with predictions for about a 190-million-metric-ton harvest when the last combines roll. With a record harvest on tap, there are extreme delays at the Miritituba port terminal. Reports indicate some trucks have been sitting in a 20-mile line and waiting more than two days to unload.
- Conflict Creates Uncertainty: With conflicts escalating in the Middle East over the weekend, commodities across the board saw a brief pop on Sunday night, but most pulled back into the open on Monday morning. However, crude oil remains elevated and likely will stay that way while the conflict continues. While the conflict is unlikely to immediately impact grains, a focus remains on trade relations as countries pick sides to support.
Basis Commentary
Grain buyers fully made the transition away from March futures and are now utilizing May futures on their bid sheets. Nearby, it appears that processing facilities have not struggled to get bushels to come across the scale, and added price volatility due to the Middle East conflict provides extra incentive for producers. Producers have been hesitant to make large sales, though, potentially just spotting in bushels rather than having contracts to apply to. As a result, processors may be a tad more on edge not knowing when the spot loads will slow down.
We urge folks who need to haul soybeans to the river to look at basis values and consider locking that in. The conflict with Iran will probably not help the US-China relationship. Therefore, it seems unlikely right now that China will buy additional soybeans from the US at prices that remain stubbornly uncompetitive compared to South America.
Futures vs History
Hedge Recommendations
Chart of the Week: WTI Crude Oil
WTI crude oil surged this week following US and Israel military strikes in Iran over the weekend. Futures were trading around $77 per barrel on Tuesday, the highest level since January 2025. The conflict disrupted regional oil transportation and shipments were rerouted around Africa to avoid the Strait of Hormuz, one of the world’s most important oil pathways. Even temporary transportation disruptions can elevate global energy prices, raise shipping costs and create substantial supply delays.
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