By Kirk Maltais
--Soybeans for May delivery rose 1% to $12.25 3/4 a bushel on the Chicago Board of Trade on Thursday, with the Strait of Hormuz remaining closed and crude oil surging back to the $100/barrel level.
--Wheat for May delivery rose 0.5% to $5.97 3/4 a bushel.
--Corn for May delivery rose 0.4% to $4.62 a bushel.
HIGHLIGHTS
Adding Premium: Grain futures marched upward, with traders adding a so-called "war premium" to prices. In a note, analysts with AgResource estimate that corn futures are currently carrying a premium of 25 to 35 cents. Wheat is carrying a 40-to-60-cent premium, while soybeans carry a premium of 80 cents a bushel. "No one wants or likes war, but the rise in energy and the corresponding rise in grain values have been a gift to U.S. farmers," said the firm.
Rule Change: A temporary stoppage in Brazilian soybean shipments to China also helped push CBOT soybean futures to their highest level since May 2024. Media reports said that agricultural trade giant Cargill temporarily halted its purchases of Brazilian soybeans, thanks to a change in inspection rules by Brazilian officials. A spokesperson for Cargill's Brazilian operations declined a request to comment. China generally prefers South American soybeans over U.S. soybeans at this time of year, with U.S. soybeans becoming more desirable later.
INSIGHT
Growing Costly: Rates for shipping grains overseas from U.S. ports are climbing, pushed higher by climbing fuel costs. In its weekly Grain Transportation report, the USDA said that the freight rate for shipping grain from the U.S. Gulf to Japan was $58 per metric ton, up 6% from the prior week, and 16% higher year to date. The rate to ship from the Pacific Northwest to Japan was $33 per ton, up 6% from a week earlier and up 25% year to date. The Middle East conflict along the Strait of Hormuz is causing fuel costs to rise, reflected in both grains and crude oil futures.
Lagging Behind: Rumors of regulations soon to come from the EPA regarding renewable fuel obligations have driven stronger soybean prices this year. But overall production of soybean meal and oil is lagging behind where those watching the market would expect it to be at this point. One reason for that is the regulatory uncertainty coming out of Washington, said Bree Baatz of Terrain in a report. "Between 2022 and 2024, renewable diesel consumption almost doubled before collapsing in 2025 because of uncertainty around federal biofuel tax credits, feedstocks and producer eligibility," said Baatz.
Switching Over: The NOAA's Climate Prediction Center said that the climate system is expected to shift to neutral from a La Niña system over the course of the next month. It is then expected to stay neutral through the spring before transitioning to an El Niño over the summer. The agency gives a 62% for the climate to turn to an El Niño system emerging between June and August. El Niño typically brings wet and cool conditions to southern states, with warmer and drier conditions further north. A dry summer could affect the yields of crops growing across the Corn Belt.
AHEAD
-The CFTC will release its weekly Commitment of Traders report at 3:30 p.m. ET Friday.
-The USDA will release its weekly Grain Export Inspections report at 11 a.m. ET Monday.
-General Mills will release its fourth quarter 2025 earnings report before the stock market opens on Wednesday.
-The EIA will release its Weekly Petroleum Status Update report at 10:30 a.m. ET Wednesday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
03-12-26 1621ET
