This is the SFN Market Report with Brooks Schaffer of Palmetto Grain. Reach him at brooks@palmettograin.com or 843-540-4540.
Still hard to tell if the war in Iran is ramping up or winding down. One minute Vice President JD Vance is on the way and will arrive in Pakistan for talks, and the next minute he has not left yet and the delegation is not going. Crude oil is up, then it is down. The stock market seemed to be completely ignoring the headlines, as the U.S. indices made new highs. But then on Thursday, news hit that the speaker of the Iranian Parliament was forced to resign from the negotiating team by the Iran Revolutionary Guard Corps. IRGC is believed to be more hawkish than the speaker of parliament. Right after the news broke, equities dropped hard but bounced off the lows in the following hours, and energies jumped higher. So while the equity markets may be trying to decouple from the war, there remains a lot of headline risk and volatility around those headlines. The volatility in energies is still having some effect on the grains, but that effect is much smaller now. The forecast for cold temps last weekend kept many Midwest farmers from getting the planters rolling. Now that cold is behind us, we should see the planters rolling in a big way in much of the Midwest. There is another round of cold air and precip coming to parts of the Midwest, which will keep some of the more northern acres from being planted yet, but there is still plenty of time. We will get another planting update Monday afternoon so the market can gauge progress.
The drought-plagued hard wheat crop in the U.S. Plains got hit over the weekend with very cold temps, and that helped support the wheat market. There are rains forecast for some of the hardest-hit areas of the Plains, but even if they materialize, many growers report it will be too little, too late. In addition to the production issues in the U.S. Plains, there are cold temps forecast for wheat-producing regions in western Europe that could hurt production there. That has also helped support wheat prices. Strength in wheat has supported corn.
Soybeans failed after making new recent highs this week, trying to break out of the recent sideways pattern. The market needs some kind of spark to attract more buying. Jamieson Greer, the U.S. trade representative, said this week that the U.S. was pressuring China to buy other commodities in addition to soybeans. The U.S. has quite a bit of leverage on China right now, so needs to make it count at the meeting between Trump and Xi in May. If that meeting gets called off or delayed, the ag markets are going to be disappointed and probably see some fund selling.
Look for more range-bound trade as we move through planting season. With all going on in the world, there is a lot of headline risk, so get target orders working. We can see a big move on a headline that does not last long. If you have an order working, you may get hit. If you are going to call someone when you see the price you want, you may not.