The two-week truce is on. Will it hold?

The news you know is that a two-week truce has been announced between the US/Israel/Iranian hostilities, with the Strait of Hormuz being allowed open during this window for transportation. There are over 800 ships that want out of the Persian Gulf; over 400 of them carry crude oil, plus 34 liquefied petroleum gas carriers and 19 liquefied natural gas vessels. The remainder are carrying dry commodities, like agricultural or metal products, and or containers. What is likely not discussed is that none of them wants back in until after the two-week window has been solidified, confirming that the Strait is safe. Yes, crude oil is sharply lower while grains plummet overnight, with soybeans recovering substantially in price as soybean meal anchored the reverse of the crush spread.

While this initially sounds negative for agricultural products, there is a longer-term building story here that will surprise many and catch the perma-bears off guard. Even if the fighting with Iran stops, that does not automatically close the book on agriculture’s supply story. India is a good place to start. The country uses roughly 60 million tons of fertilizer each year and still brings in about 18 million tons from abroad. That means any disruption in global nutrient and energy flows matters immediately. To meet domestic needs, India will need access to natural gas to recover quickly, because fertilizer production cannot return to normal without it.

That recovery is unlikely to be clean or quick. The full extent of the damage to Saudi petrochemical assets in Jubail remains unclear, and early indications suggest Qatar’s Ras Laffan LNG hub could take years to fully restore. On top of that, the Strait of Hormuz is not going back to business as usual anytime soon. Even after a formal end to the war, the region is likely to face a long period of logistical strain, security risk, and periodic military incidents.

The market implication is straightforward: input costs are not about to snap back to their pre-conflict levels. For growers hoping for a return to old pricing ahead of the 2026 planting season, that looks increasingly unrealistic. Energy remains the key constraint, and as long as energy stays elevated, fertilizer and broader agricultural costs are likely to remain under pressure.  This is not a story that affects trade immediately today but is a possible trade story, and what will become an issue as the summer progresses and will have an impact on wheat later this summer. India's winter wheat crop is going to have issues getting fertilizer.

Tomorrow will be the April WASDE crop report, and similar to the March data, only minimal changes are expected to either the domestic or the global balance sheet. It is the May WASDE report, which includes the first look at new crop balance sheets, that will bring more interest. Today will see weekly ethanol data in the trade, which is expecting a slight increase in production from last week and continued strong demand.

On Tuesday, cattle closed sharply lower on a fear-based trade, and that fear is completely reversed as of this morning. A sharply higher opening is anticipated. Yesterday’s box beef values saw the choice cutout fall $5.30 to $382.74, while select declined just $2.04 to $386.33. This bread is flipped again to a premium of $were 3.59 select, again showing the imbalance in production with so many heavy steers grading choice while the hamburger market is looking for lean beef.

Live cattle June could open $1.50-2.00 higher, putting it back near yesterday’s highs on the opening, with May feeder cattle opening $2.50-3.50 higher. 250 is a barrier number for June cattle at present, with 372-374 technical resistance for May feeder cattle.