Agri- Commodities: 09-13/03/26

Monday

Grain markets began the week in an extremely volatile environment as energy markets experienced one of the most dramatic sessions in recent history. WTI crude traded in a roughly $38 range during the day, at one point surging by around 31% before reversing to losses of about 11%. The sharp swings in oil spilled directly into grains, reinforcing the strong correlation between energy markets and agricultural commodities.

Political headlines added to the turbulence. Oil briefly turned negative after comments from Donald Trump suggested the conflict with Iran could end soon, while also warning Tehran against disrupting shipments through the Strait of Hormuz. Markets showed extreme sensitivity to such headlines, with rapid price reactions across multiple asset classes.

Attention also turned to the upcoming United States Department of Agriculture WASDE report, which was expected to contain mostly minor adjustments. Meanwhile, U.S. export inspections showed solid wheat demand and cumulative shipments remained ahead of last year for corn and wheat, while soybeans continued to lag.

Tuesday

Markets remained heavily influenced by developments in the oil market. Although volatility was lower than the previous day, WTI still traded within a wide range, continuing to drive sentiment in grain markets. The March WASDE report largely met expectations and did not introduce major surprises, leaving attention focused on upcoming USDA releases scheduled for the end of the month.

Energy headlines continued to shape the outlook. Iran was reported to have begun laying mines in the Strait of Hormuz, increasing escalation risks. At the same time, the International Energy Agency considered releasing emergency reserves—potentially exceeding the 182 million barrels released in 2022—in an attempt to stabilize crude prices following the war-related surge.

In agricultural trade, EU customs data showed soft wheat exports reaching 16.50 mmt as of March 8, with line-ups suggesting shipments closer to 19 mmt. Tender activity also continued, with Algeria believed to have purchased around 150-200k tons of milling wheat for April–June shipment, while Jordan made no purchases in its latest tender.

Wednesday

Grain prices moved higher across the board midweek as oil prices rose again, reinforcing the strong correlation between the two markets. Energy market disruptions continued to dominate the narrative as attacks on vessels in the region forced some oil terminals to suspend operations, while Brent crude climbed back toward $100 per barrel.

In response to the escalating supply disruption, the International Energy Agency announced that its 32 member countries would release a record 400 million barrels of emergency oil reserves. The measure represents the largest release in the agency’s history, though it may still fall short of replacing the roughly 20 million barrels of daily oil flows that typically transit the Strait of Hormuz.

In Europe, FranceAgriMer lowered its forecast for French soft wheat exports to third countries while raising ending stock estimates to the highest level in years. Meanwhile, speculative positioning remained active in futures markets, with non-commercial investors continuing to add to net long positions in both MATIF wheat and rapeseed.

Thursday

Grains and oilseeds extended their gains on Thursday, although prices retreated somewhat from intraday highs into the close. Rising oil prices remained the dominant driver of speculative interest, with markets reacting to further escalation around the Strait of Hormuz.

Reports indicated that three additional foreign ships were hit in the Persian Gulf, adding to earlier attacks on vessels in the same region. Iran’s leadership also stated that the strait would remain closed and warned that the conflict could expand further, increasing concerns about prolonged disruptions to global energy flows.

Agricultural fundamentals also saw updates. The U.S. drought monitor indicated that 55% of winter wheat areas were affected by drought as of March 10, far above last year’s levels. In South America, improved rainfall supported crop conditions in Argentina, with the Buenos Aires Grain Exchange maintaining its production forecasts for soybeans and corn.

Friday

Grain markets ended the week with wheat futures rallying into the weekend, supported by rising energy prices and continued short covering by funds. Nearby Chicago wheat contracts gained more than 2.5%, even as the U.S. dollar strengthened and European wheat futures lagged behind the move. Weather concerns also contributed to gains, as a brief cold spell moved south across U.S. wheat areas before temperatures were expected to rebound.

Crop conditions and production forecasts were also updated globally. FranceAgriMer reported French soft wheat conditions at 84% good or excellent, while Brazil’s Companhia Nacional de Abastecimento slightly trimmed its forecasts for both corn and soybean production.

Positioning data showed strong speculative activity in agricultural futures. Managed money significantly increased its net long position in corn, while soybean net longs reached their highest level in four months. In contrast, funds remained net short in Chicago wheat despite the recent rally.

Political developments continued to influence broader market sentiment, as Donald Trump stated that Iran was ready to negotiate an end to the conflict but insisted that any agreement must include a firm commitment to abandon nuclear ambitions and urged other countries to help secure the Strait of Hormuz.