Matt Ammermann
Commodity Risk Manager
Vice President, Eastern Europe/Black Sea/MENA Region
StoneX Financial Inc. – FCM Division

In today’s market, price is no longer driven by supply and demand alone, but also by money flows, geopolitics, energy disruption and weather risk. While the Iran war has fueled stagflation fears and speculative buying across agricultural futures, global wheat, corn and soybean fundamentals remain broadly adequate. If peace emerges and energy pressure eases, agricultural markets could quickly refocus on bearish fundamentals, strong old-crop wheat stocks, expanding South American corn and soybean supplies, and seasonal downside risks, making active price-risk management more critical than ever.

As the saying goes, “There are decades where nothing happens, and then there are days/weeks where decades happen.” It feels like we are currently living this as the days unfold. We live in a world that operates with 24/7 news, and thus markets that are continually open to trade the impacts of this. At the time of writing, we are dealing with two wars and ongoing trade battles with various nations, with the primary focus being on U.S.-China relations. Daily news is highly fluid, and direction with the above topics highly dictates price action and investor flows, ultimately increasing volatility and the need to manage your price risk. Without proper management and price hedging, today’s markets will manage you!

Let’s first take a look at the Iran war. Unfortunately, this war started on February 28, 2026. When the war started, price volatility, especially energy price volatility, increased drastically. WTI crude oil closed on Feb. 27 at $67 per barrel, and by March 9 we traded up to $119.48 on extreme fears of the Strait of Hormuz being closed. During this same time, Brent crude oil went from $72.48 up to $119.50 per barrel as well. More recently, Brent pushed a fresh high of $114.01 on April 30, whereas WTI’s high was on March 9. With the strait being effectively closed since then, it has caused an extreme disruption of global energy flows, as it was once the passageway for nearly 20% of the world’s crude oil and gas supplies. Since the extreme panic on March 9, the world has found several solutions to help with the reduced supply restraint: U.S. release of SPR reserves, OPEC+ increased production potentials, IEA reserve selling, and de-sanctioned Russian crude oil supplies. You have to remember that price always does its job, and through the life of the war thus far, price has done its job to reduce demand and increase supply where possible.

Most of the focus has been on the energy complex for good reason, but the agricultural markets have received a steady flow of speculative buying/fears as well. Again, unfortunately, the word ‘war’ finds too much familiarity with Russia-Ukraine and the ongoing war that remains there. Even though that war is much different than the Iran war (the Black Sea is the world’s largest wheat exporter vs. Gulf nations are net importers), algo/headline traders still associated ‘war’ with buying in wheat futures, but ironically, price has lagged the buying seen in the futures market. During the start of the Russia-Ukraine war, Chicago wheat funds bought 60k contracts to put them long 24k contracts (they started nearly 35k short), while price increased nearly $4/bushel. Meanwhile, during the start of the Iran war, Chicago wheat funds bought nearly 100k contracts to put them long 11k contracts (they started nearly 95k short), while price only increased $1.20 per bushel. The main difference can be seen in the reality of exporting vs. importing nations, but the outright buying was intensified more recently in the Iran war due to the thought of stagflation and the speculators’ desire to trade it before it was a fact. Similar actions are also seen in corn and soybean futures positions in relation to price: fund buying has been there, whereas price has not followed as it historically does. This opens the door for intensified downside price risks if/when peace is found and all those long funds need to exit.

What is stagflation? Stagflation is an economic condition where high inflation, stagnant growth and rising unemployment occur simultaneously, creating a challenging environment for global central banks and consumers. The combo of high inflation and rising unemployment is something that no nation wants, especially since we are all too familiar with the Covid inflation that was mismanaged, even though the U.S. Fed in particular kept it as ‘transitory inflation’ for far too long. The U.S. Fed never fully admitted mismanagement, as this is my personal argument, but the point is that the U.S. Fed, for example, continues to take ‘stagflation’ rather seriously, as it does not want to get it wrong for a second time. All this has drastic impacts on Fed policies, and if inflation/stagflation is a concern, speculative order flows favor hard assets, and thus the buying seen in the commodity markets, especially that of wheat.

Globally, fully adequate fundamentals/cash markets remain. Amid the fund buying seen in Chicago wheat, global cash prices have largely remained steady, as non-U.S. origins remain price-sensitive in order to get proper demand flows to help avoid ending stocks building. More recently, some speculative buying has been noted in Kansas wheat futures/HRW futures amid the growing drought seen in the Western Plains, but again, this further isolates the U.S. from a competitive landscape, as Russian wheat continues to move to Mexico and even EU wheat has been/currently is being traded into eastern mills in the U.S. EU, Russia and Ukraine old-crop ending stocks are estimated to be at a fresh record, nearing a combined 35 mmt. New-crop potentials look all the more adequate, as Northern Hemisphere weather outside of the U.S. looks to be fully fine as well.

Corn and soybean funds have also seen modest buying from ‘stagflation’ concerns, but more of this buying has been related to their own fundamentals, with corn having lower plantings and soybeans having hope of further China demand. Funds in soybeans have also been greeted by a final decision from the EPA (Environmental Protection Agency), as it finally announced the RVO (Renewable Volume Obligation) for biofuels. There are a lot of details to consider, but this has been something the industry has been waiting for since the summer of 2024. 2026 RVO numbers remain 5.4 bln gallons vs. market estimates of 5.4-5.6 and vs. last year’s number of 3.35 bln gallons; SRE (small refinery exemptions) reallocations are 70% over two years, and foreign feedstock RIN (renewable identification number) is 100% for 2026 and 2027, and 50% for 2028. In a quick summary, this is a massive jump in RVO, and quickly that market has to consider at what price it makes sense for imported feedstock to work into the mix. Per global vegoil supplies, the U.S. is not alone with this increased biofuels initiative; you have the same initiatives in South America and Asia as well, so big picture, if China demand is flattening, the market is finding a home for the increased supplies via crush and oil share need. Simply put, if you’re a crusher, you’re a happy man right now!

With the ‘hope’ of China coming back to the U.S. markets, U.S. farmers are responding by increasing plantings for 2026. Per the March 31 USDA planting intentions report, U.S. farmers are expected to plant 84.7 mln acres vs. 81.2 mln acres in 2025. With this, it will give increased supply to export, but more importantly, the crush industry needs it amid the RVO demand for oils now. U.S. farmers also indicated that they would plant 95.338 mln acres of corn vs. 98.8 mln in 2025.

For the corn market, U.S. origin always gets the most attention, of course, but a bit more silently, S.A. corn production is likely to push record levels for the 25/26 crop year, and thus this will feed record export flows as well. Brazil safrinha growing areas are still expected to make for a total Brazil crop of 135-138 mmt, with exports pushing 44 mmt+, vs. 42 mmt last year and 38 mmt the year before. We also have Argentina at 60-63 mmt vs. 50 mmt LY and vs. USDA still at 52 mmt, assuming they change it next week? In full, S.A. corn exports should push record flows this year, fully competing with the U.S. and Ukraine. Expect record S.A. flows July through November, though.

So at the end of the day, we all hope for peace in both Iran and the Black Sea. If/when that occurs, a lot of the ‘stagflation’ buying will likely come out of the market, and then we can focus back on the bearish fundamentals that the market currently has in place. Beyond geopolitics, we are entering the seasonal time of mother nature risk in the Northern Hemisphere. This time of year always finds the debate around El Niño and La Niña. These types of weather patterns (ocean water movements/temps) typically find their focus on the U.S. Midwest per the Northern Hemisphere, but also on Australian wheat production potentials over the coming months. Per the forecast right now, it’s expected to be a strong El Niño, which typically offers a wetter U.S. Midwest and assumes, for now, above-trendline yield potentials; meanwhile, this can also push below-normal rains for Australian wheat-producing areas. Mother nature always provides plenty of surprises during the growing year, so I am sure we will see a few speed bumps, but history says you have to strongly consider seasonal price moves per above-trendline yields.

Like any commodity that is planted, grown and harvested one time a year, seasonal price trends have developed over the lifecycle of each crop year. Since the introduction of increasing S.A. supplies over the past two decades, seasonal influences have been altered slightly, but they still hold to what they traditionally stand for. Historically speaking, seasonal price trends in Chicago corn, soybeans and wheat lean supportive/bullish from April-May, but then, as the growing season unfolds, prices move lower until early fall, near/at harvest time, when supply is most prevalent and demand wakes up a bit. For the market to negate the bearish seasonal trend over the summer months, it typically takes a strong adverse weather market somewhere in the Northern Hemisphere to alter this perspective. It has happened, but only a few select times over the past few decades. Again, the introduction of South American supplies and the fact that they introduce their new-crop supplies 4-5 months after the Northern Hemisphere is another influence on any bullish hopes from adverse Northern Hemisphere weather. As it stands right now, S.A. as a whole has a record soybean crop and will be an active exporter year-round, fully competing with U.S. supplies even at U.S. harvest times, something that is a new factor for the market to consider as well.

The charts below illustrate that corn, soybeans and wheat daily price volatility since the start of the Iran war has been relatively calm compared to recent years. It should also be noted that weather price volatility typically exceeds any volatility that we have seen thus far during the Iran war era. The largest unknown in the agricultural markets is what mother nature provides, so there is still plenty of risk ahead of us.

So in today’s world, we have a lot to consider, and remember that price is not the sole function of supply and demand, but now how it is modified by the flow of money and geopolitics. We all hope the Iran war will be solved and the whole world will be in a bit better position. If so, this leaves some downside potential in a lot of agricultural markets, as it would allow focus back on fundamentals and would push U.S. and global equity markets higher, as that stagflation risk would be reduced significantly due to lower energy prices. The market always keeps market participants on their toes, so I am sure new surprises will be found as we continue to work through 2026.

StoneX Financial Inc offers price hedging for its customers. The above information and insights are a small example of the market intelligence that we offer customers, but more importantly, how does the above impact your risk with cash positions? Are you active in managing your price risk? There are many ways to manage price risk, whether it’s better understanding market fundamentals, using futures, options, OTC or even structured products, or a combination of it all to help manage your price risk. You’re much better off doing something to manage your price risk, or the market will manage you!

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