Commodity Markets Gain as Fears of a Prolonged Stalemate Set In

GENERAL COMMENTS:

The ceasefire is holding, the Strait of Hormuz traffic is frozen, and the reality that it could be a prolonged standoff is setting in, pushing grain, oilseed and energy markets higher overnight. Crude oil reversed initial losses seen as President Trump continued to give his opinion that good progress would be made soon while reports suggest additional troops are being deployed to the region, along with various other military assets. The optimistic talk from the administration (that has been contradicted by Iran) has been responsible for a $18.67/barrel drop in the crude oil price from Sunday evening’s high (on failed peace talks and the U.S. blockade) to Tuesday evening’s low. With the $6/barrel recovery overnight, it appears markets may want to see results now. Regardless, the impact of a prolonged closure of the Strait of Hormuz on fertilizer supplies and thus, global ag production appears to be a growing concern. And so it should be. In the meantime, demand remains strong given the fire sale price for corn (in particular) as 436,000 mt of flash corn sales were reported Tuesday on the heels of another exceptional week of corn export inspections Monday. Importing countries appear to be aware of the limited downside price risk compared to the upside potential. As a reminder, the last time energy markets were in this price range, corn traded around $8/bushel, and global production and supply risk was not nearly as serious.

OUTSIDE MARKETS:

Treasury markets are barely lower following another strong rally Tuesday as the PPI report for March was slightly cooler than feared. At 4%, it was still the highest seen since February 2023 but below expectations of 4.7% as impacts of the war with Iran are realized. More importantly, markets appear to be pricing in a peaceful resolution with it being just a matter of time. That does set up for a resumption of the break should an escalation be seen instead. The market is now pricing in the next rate cut for the September 2027 meeting. The U.S. 10-year note is back down to 4.26% (compared to a recent high of 4.46% and 3.96% prior to the war).

The U.S. dollar is quietly higher following two days of selling pressure as traders remain optimistic that de-escalating is just a matter of time. It is worth noting that a saucer bottom that has been developing over the past year remains intact (should the ceasefire collapse) but the gap lower from the ceasefire announcement remains, suggesting that bottom could be tested. The June U.S. dollar is .107 higher at 98.105.

Equity markets are quietly lower after another strong rally Tuesday. Record highs are very close to being tested as the market appears to be extremely optimistic. 

Energy markets have reversed higher (as discussed in the general comments). May crude oil is $1.46/barrel higher at $92.74 with June crude oil up $1.67 at $89.86/barrel. May ultra-low sulfur diesel is $.1244/gallon higher at $3.7487.

The March Canadian dollar is down .00015 at $.72770 while the Brazilian real is down .00005 at .19970. June gold is down $26.20 per ounce at $4823.90. May silver is down $.618/ounce at $78.915.

OILSEEDS:

Canola is higher with it appearing as though interest is growing in buying at these levels. Support at the $700/mt level is holding so far as the market continues to present as a bull market correction. With ICE canola crush margins hitting record levels of $350/mt last week, the canola market appears to be seriously undervalued compared to the soybean product markets. See more in Tuesday’s post at https://www.dtnpf.com/agriculture/web/ag/blogs/canada-markets/blog-post/2026/04/14/canola-crush-margin-sets-record-amid. May canola is $4.70 higher at $708.80/mt while July canola is $4.70 higher as well at $721.30/mt.

Palm oil is quietly higher following soybean oil and energy markets. June palm oil is .18% higher.

Soybean oil is higher thanks to the recovery in energy markets. The gap-down from contract highs following Tuesday’s ceasefire announcement was not filled on Monday, something the bulls will want to do relatively soon. Otherwise, the potential for a large double top at 70 cents/pound remains. It will take a close over the Tuesday high of 70.49 cents to negate the formation, a move that an escalation with Iran would likely be able to inspire.  

European rapeseed is quietly higher. August rapeseed is 1.50 euros higher at 493.75 euros per mt.

Soybeans are higher after giving up gains again on Tuesday with traders still concerned over rising tensions between the U.S. and China (over the Iran war) as well as a potential shift to soybean production to avoid nitrogen fertilizer application requirements. Should the rally resume, a close over Monday’s high of $11.8375/bushel will be required to signal the next leg higher. It’s worth noting that Monday recorded a test of record soybean crush margins as well with it hitting $3.13/bushel after being at the more normal level of $1.20/bushel just last November. Certainly explaining and supporting record soybean crush estimates.

WHEAT:

Wheat markets are lower, giving back some of Tuesday’s exceptional gains that were inspired by drought concerns. Rumors of Ukraine being caught short of fertilizer with the outlook bleak for supplies to arrive in time for this year’s crop surely provided support Tuesday as well. Combined with the risks to Australian production from fuel and fertilizer supply constraints and a potential El Nino impact, and global exportable supplies could be seriously impacted in this production cycle. See more in “El Nino Prospects Suggest Challenges for Australia Wheat,” at https://www.dtnpf.com/agriculture/web/ag/blogs/ag-weather-forum/blog-post/2026/04/13/el-nino-prospects-suggest-challenges. With Tuesday’s rally, it appears that the bull market correction seen since the beginning of April may have run its course with buyers stepping up.

CORN:

Corn is higher with it appearing as though fertilizer prices and availability concerns may finally be working their way into the market. Tuesday’s gains could not hold (for a second day in a row) as spillover selling pressure from energy markets impacted grain and oilseed markets overall, but it does appear good support at these levels is attracting buying interest. Keeping in mind that producers around the world relying on fuel and fertilizer that must first pass through the Strait of Hormuz do not have the luxury of months for this to play out. The seeding window will be missed, and production will surely suffer if something doesn’t change quickly. It’s worth noting that the last time energy markets were at these prices, corn was trading around $8/bushel, and there was not the risk to global production that the current fertilizer constraints present.

Mitch Miller can be reached at mitchmiller.dtn@gmail.com

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