Row crop futures raced to a strong start following Monday evening’s open, bullishly influenced by another 5-6% move in crude oil futures as the U.S. and Israel-Iran war rages on. However, as was the case on Monday, the U.S. Dollar strengthened relative to other currencies, hitting the highest mark since late November before fading slightly through Tuesday’s trade. Moreso, soybeans and soybean oil remain well overbought from a technical standpoint, and rally attempts beyond November highs are understandably being met with profit-taking speculative selling and likely producer hedging pressure as well. Still, despite finishing well below daily highs, futures appeared equally stubborn to move drastically lower than even, with several markets setting higher lows as compared to Monday’s reversal session and ultimately closing with modest gains on Tuesday.
WHEAT:
May Kansas City wheat futures closed 3 1/2 cents higher on Tuesday to $5.78 1/4. Chicago futures continued to face pressure, while Minneapolis spring wheat futures were higher as well. It was a two-sided session for wheat futures, but markets did find a footing, especially as the U.S. Dollar fell from early highs. Chicago futures broke lower, likely a result of widespread rainfall in the forecast for the first half of March in the eastern U.S. From a technical standpoint, $5.90 is the bullish target for May KC futures, which is the high for most actively traded futures during last June’s Israel-Iran war. Support is seen first at $5.64, followed by $5.60.
Although the market has been somewhat subdued through the winter regarding widespread drought in the U.S., we may get some increased focus on conditions for Wednesday when USDA releases their next round of state by state crop conditions, in conjunction with a two-week forecast which shows a good chance for some drought alleviation, primarily in the soft red regions as mentioned, but also into the southern Plains as well particularly Texas and Oklahoma. Read more on the latest weather impacting winter wheat crops in DTN Ag Meteorologist John Baranick’s latest column at https://www.dtnpf.com/….
In world wheat news, world values have also moved higher through the second half of February and early March, with Paris milling futures trading to their highest point for the most active contract since late June of 2025. U.S. export offers remain expensive relative to offers from Argentina as well as out of the Black Sea, but despite this, the U.S. export book remains ahead of pace to hit USDA’s goal with commitments up 15% from early 2025 as of February 19, and more recently, export inspections up 19% from the same period in 2025 as of February 26.
Corn
May corn futures were 3/4 of a cent higher on Tuesday, closing at $4.46 1/2. July futures were up 1 1/4 cents to $4.55. The corn market again fell from overnight highs, with the $4.50 mark emerging as a level of resistance, likely a popular level for hedging offers at the farm level. For now, corn futures appear firmly stuck between bullish influence from the energy sector and profit-taking in soybeans and wheat. In optimistic news, May prices are displaying resilience at the 100-day moving average ($4.45 3/4), reluctant to drift much lower than this mark, and also set a higher low on Tuesday as compared to Monday.
Monday saw the release of the monthly Grain Crushings report from USDA, which included corn usage for ethanol production in January. As was implied by the cold weather and subsequent spike in natural gas prices, January was a rather disappointing month with only 461 million bushels (mb) of corn crushed, down almost 22 mb from December. USDA also cut its December estimate by almost 6 mb. January and February tend to see decreasing volume as compared to the Fall months. The corn crush pace is a growing concern, with year-to-date volume now down 0.5% from the same point in 2024-25, and USDA expecting corn usage for ethanol to increase 3% this marketing year. The summer months will be pivotal to meeting this goal, and the silver lining is that ethanol margins should improve with ethanol prices trending higher along with most energy products.
In world corn news, the Mato Grosso Institute of Agricultural Economics (IMEA) released its monthly supply and demand outlook on Monday, expecting an expansion in safrinha plantings in 2026 as compared to 2025, but using a conservative yield thus far, which would result in an 8% year over year decline in corn production. Interestingly, the report singles out the growing demand for ethanol in Brazil as the main economic driver of corn expansion, not export demand. In fact, the relatively tight corn situation outside of the U.S. and China keeps me optimistic that U.S. export market share should remain strong. That being said, in the short term, the U.S. may face increased competition from Argentina with harvest underway there and the recent surge in the U.S. Dollar.
