One of the biggest developments in global trade has been the start of the war between the U.S. and Iran. While this is not directly impacting commodity markets, it is having an indirect impact, mainly through renewable fuel markets and input costs. Energy values have spiked following the start of the conflict, and this has supported renewable fuel markets as well. A greater concern is the war will drag out, causing economic stress on a global scale, and potential recessions in already stressed economies.

At the same time, the fighting is causing fertilizer values to spike. Iran is the world’s third largest urea exporter, and since bombing has started, exports have been shut off. This caused urea at the Port of New Orleans to jump nearly $80 a ton immediately following the initial attacks, as spring demand has already depleted some urea reserves. There is little doubt this is going to impact U.S. acres this year.

The bottom line with the U.S./Iran war is nobody knows what will happen from hour to hour and the impact on markets is also uncertain. The longer this conflict lasts, the more negative it will be on several markets, including the ag sector.

Corn demand is starting to garner more market interest. We have seen solid corn demand all marketing year, but this has been overshadowed by the large U.S. crop from last fall. This has pressured corn values and elevated demand, with year-to-date corn commitments now totaling 60.8 million metric tons. This is 75 percent of the USDA yearly estimate with half the year left to go. Even if corn demand is front loaded as some believe, this pace indicates the USDA is still too low in its demand estimate. The growing possibility of China importing U.S. corn is also supporting corn demand outlooks.

One U.S. feed grain China continues to import is sorghum. In the past three months, China has imported 2.5 mmt of U.S. sorghum. China opts for U.S. sorghum as it requires much less import regulation due to the lack of GMO production. China has also increased its demand for feed barley. Reports of elevated mold in China’s stored grain is upping the need for these imports. Sources in China still expect the country to import U.S. corn, especially with Brazil’s soybean export program beginning. This takes Brazil out of the global corn market until late summer when the safrinha crop is harvested.

More market attention is starting to be placed on new crop production and marketing. The most interest right now is on the new crop corn and soybean price spread and how this has started to shift. The current new crop corn/soybean ratio has widened to 2.43 to 1 meaning it now takes 2.43 bushels of corn to equal the value of 1 bushel of soybeans, which is near neutral. Earlier this winter this spread was as narrow as 2.3:1 which favored corn production.

A factor that may end up impacting U.S. acres this spring is rising input costs. The input seeing the most attention is urea as spring demand is putting more strain on an already low inventory product. This has caused urea values at New Orleans to trade at a $40 per ton premium to the same product in Brazil. The new crop corn/soybean price ratio has already started to favor soybeans, and elevated input costs may cause even more uncommitted acres to end up as soybeans.

The Brazilian analytical firm Ag Rural is reporting the country’s soybean crop harvest at 30 percent, up 9 percent from last week, but 9 percent less than a year ago. This is the slowest Brazil soybean harvest in 5 years as excessive rain has fallen in several regions of the country. Not only has this slowed the country’s soybean harvest, but the 1st corn crop harvest is 9 percent behind last year at 28 percent as well. The planting of the safrinha crop has also been slowed by rain and stands at 50 percent, down 14 percent from a year ago. We are now seeing opinions that safrinha production may fall short of estimates.

Parts of Brazil are seeing stress from the complete opposite conditions though, mainly the state of Rio Grande do Sul. Hot, dry weather has been impacting this region of Brazil, with some reports of field abandonment likely.

More doubt is being shown over current South American crop estimates. Well-followed crop consultant Dr. Cordonnier lowered his predictions on both corn and soybean crops in Brazil by 1 mmt. This put the Brazil corn crop at 135 mmt, still higher than the 131 mmt USDA estimate. Cordonnier notes that the window for optimum safrinha yields in Brazil has now closed with just 50 percent of the crop in the ground. Cordonnier’s soybean crop estimate is now 178 mmt compared to the USDA’s 180 mmt. He states excessive rain in central and southern Brazil and drought in Rio Grande do Sul have cut the country’s crop potential.

The Renewable Fuel Association has released data showing the benefits of the U.S. ethanol industry for the economy. According to RFA data, the U.S. ethanol industry supported 317,000 jobs in 2025 and contributed $50 billion to the country’s GDP. Another $28 billion in household income was also reported. Of the jobs supported, 79,000 are directly tied to the ethanol industry and 237,000 were in supportive roles. The U.S. ethanol industry also spent a reported $24 billion on U.S. corn during the year. Industry officials state 2026 may be an even better year for ethanol economics.

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