The grain trade recovers as fertilizer becomes the topic of the day.

The grain trade is under full recovery mode after two heavy days of selling after the Sunday night spike rally. The reality is, the Strait of Hormuz remains closed to traffic, which does not help fertilizer movement that is critical at this time to keep moving for this year’s production. Opening strategic reserves is great for helping to support oil flows, but there’s no way to open a fertilizer reserve when everything is in a flux right now. Brazil needs this fertilizer movement now, with planting of the Safina corn crop delayed and underway. Reports are that the last 30% of corn planting is at risk of not having available supplies for normal application.

We are now just under three weeks away from the all-important March 31 Acreage Intention’s report and the big discussion occurring now is how many acres could shift from corn to soybeans this spring. Higher fertilizer costs and several years of tight farm margins have reduced working capital, which may influence planting decisions even though many growers traditionally prefer corn. Last season’s widespread corn disease may also encourage some rotation back to beans.

The market is likely assuming a strong US corn yield near or above 182 bu per acre. If soybean acreage expands more than currently expected, the bean balance sheet could become heavy unless demand improves through China or stronger soy oil usage which we are currently seeing. That situation would lean bearish for soybeans while offering some support to corn. Rumors are flowing that the White House will release the updated RVO/SRE reallocation data for 2026-2027 before the end of March. Bloomberg is caring a story that the SRE reallocation can be as large as 75%.

December corn reaching roughly 5.10 to 5.15 appears possible, but a move toward 5.25 to 5.50 likely requires a fresh catalyst such as weather issues, geopolitical disruption, or stronger demand.

Energy markets remain important. Crude between 80 and 100 dollars supports ethanol and corn demand, but if oil slips back toward 60 to 80 dollars then the question becomes what if there are weather issues. Even a 5 bu drop from projected yields would noticeably tighten the corn balance sheet, especially if there are fertilizer issues.

Yesterday’s cattle trade featured a recovery of Monday’s losses, but other than feeder cattle challenging its gap, 350 IV 351 remained formidable, while April live cattle did not plug its gap. The market is concerned if recent surprise sharp rally in energy prices may affect beef consumption. Pres. Trump’s indication of the reading wars near and did not encourage an explosive rally similar to what the stock market had experienced on the equity indexes.

Yesterday’s feeder index again drifted $0.62 and is now at $365.77. Auction action has been reportedly softening as feedlots become more concerned with the inability to hedged off risk due to the distortion between live and feeder cattle values. Boxed beef values jumped again yesterday on the reduced kills, with choice up $3.38, getting within $5.00 of $400 again while select was up $3.15 at 36.77. Resistance remains 234-235 on April cattle, while April feeder cattle are parked just under initial resistance at 350-351. Closing above 352 would inspire a recovery rallies back to the 360-361 range.