Perspective: Morning Commentary for March 27

By: Arlan Suderman, Chief Commodities Economist

Fri, 27 Mar 2026, 13:32

March 27 – Stock futures came pressure overnight, while energy and Ag commodities found buying interest, reflecting trade concerns about the escalating war in Iran going into the weekend. The VIX traded near 30 this morning, while the dollar index trades near 100.1. Yields on 10-year Treasuries are trading near 4.47%, representing a fresh eight-month high, while yields on 2-year Treasuries are trading near 3.98%, after hitting a fresh nine-month high earlier in the session. Crude oil prices are trading near $97 per barrel this morning, while the grain and oilseed markets are mostly higher as well.

President Trump extended his deadline for Iran to reopen the Strait of Hormuz until 8 p.m. Eastern Time on April 6. Trump noted that peace talks with Iran are ongoing, and that they “are going very well,” while Iran continues to state that no such talks are occurring. I’ve previously discussed the reasons for this disparity, with the truth likely somewhere in the middle in this “fog of war.” It appears that talks that have been occurring are very indirect thus far, likely via Pakistan. But there are reports that some direct talks may soon occur.

Regardless, the crude oil market added risk premium overnight, fearing that global oil supplies may get tighter before we see meaningful relief. U.S. crude oil inventories are near normal for this time of year, while the greatest shortages are currently being felt in south Asia, which is most dependent on oil that normally flows through the Strait of Hormuz, with Europe somewhere in between. Yet, the arbitrage between areas with shortages and areas with adequate supplies continues to redistribute global supplies via price, resulting in rising prices in the United States as well, although to a lessor degree. But the shortages are very real in Asia, with some freight refueling depots said to be close to running out of fuel, airlines reducing flight schedules, and early closures for businesses due to the tight fuel supplies. The shortfall in Asia is significant enough to notably curtail economic activity, and in some cases, to bring economic activity to a halt. Iran hopes that leverages global pressure against Israel and the United States.

The global crude oil supply looks to be reduced by at least 13% for an extended period of time, and that shortfall could grow if Iran is successful at hitting alternative distribution avenues, while it could also grow tighter if Ukraine continues to negatively impact Russian supplies via its strikes on infrastructure there. Saudi Arabia is currently utilizing a pipeline across its peninsula to transport close to 6 million barrels per day. That volume becomes at risk if Iran is able to successfully hit the pipeline at any point along its path through the desert, adding to the global shortfall. Ending the war tomorrow would still leave supplies tight for some weeks or months to come while infrastructure is repaired. As such, the only choice is to reduce demand, with prices now working to do that. Prices are highest in Asia, while the U.S. currently sees the lease relative impact for now.

Fertilizer finds itself in a similar predicament. A third of the world’s urea fertilizer supplies normally pass through the Strait, along with up to a quarter of the anhydrous ammonia fertilizer supplies and significant phosphate supplies. The most critical of these is the urea and anhydrous ammonia supplies. Crops can often sustain yield potential for a year or two in the absence of phosphate applications, leaning on soil supplies. But a reduction in nitrogen fertilizer application sees a direct impact on yield in the year of the shortfall in most cases. Most U.S. farmers should be able to acquire the nitrogen fertilizer that they need, although the greatest risk of a shortfall will be in the northwestern Midwest / northern Plains. Farmers will generally pay up for the nitrogen fertilizer, believing that it is their best hope to “yield their way out” of a financial hole. The shortfall will be most felt by those countries lacking inventories in position at planting who do not have the financial resources to pay today’s higher prices. World wheat farmers will be the first to see this negative impact – more so outside of the United States. Yet, I’m not one to buy into the global food shortage hype currently being circulated on Wall Street, at least not yet. World surplus grain supplies are still large enough to provide a buffer against that, although some higher prices may be needed to redistribute those supplies. China and the United States are the biggest holders of those surplus supplies.

The White House Office of Management and Budget has officially completed its review of the final biofuel regulations. The president is expected to unveil those final guidelines to farmers and biofuel producers on the south lawn of the White House over the Noon hour today. Tight global fossil fuel supplies are already increasing demand for biofuel, with Argentina announcing that it will allow up to 15% ethanol blends in gasoline to stretch its supplies. Ethanol is generally cheaper than gasoline. Today’s biofuel guidelines should finally unleash the U.S. biomass diesel production sector, which has been hampered by policy uncertainty for much of the past year and a half. Removing that uncertainty is almost more important than the guidelines themselves.

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Perspective: Morning Commentary for June 26

June 26 – Chip stocks weighed on stock futures overnight, contributing to general weakness across the board as Iran tries to take control of the Strait of Hormuz once again, testing the fragility of the ceasefire. The VIX elevated to trade near 21 this morning, while the dollar index slipped lower to trade near 101.1. Yields on 10-year Treasuries are trading near 4.40%, while yields on 2-year Treasuries are trading near 4.10% as the yield curve steepens a bit this morning. WTI crude oil traded back below $70 per barrel this morning, as Brent traded near $73, while the grain and oilseed markets traded mostly weaker as well ahead of the weekend.

Arlan SudermanFri, 26 Jun 2026, 13:41

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Perspective: Morning Commentary for June 25

June 25 – Stock futures pushed higher overnight, led by the tech sector, ahead of a plethora of key economic data released this morning, including durable goods orders for May and PCE inflation data. That data gave another initial modest push to those gains when released. The VIX is trading below 18 at this hour, while the dollar index trades near 101.6. Yields on 20-year Treasuries are trading near 4.38%, while yields on 2-year Treasuries are trading near 4.11%. WTI crude oil made new post-war lows this morning below $69 per barrel on reports that oil flows through the Strait of Hormuz have returned to pre-war levels, while the grain and oilseed sector was mixed, with corn and wheat prices again under modest pressure while soybeans posted modest gains.

Arlan SudermanThu, 25 Jun 2026, 13:32

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Morning Grain Comments 6-25

Morning Grain Market Comments - Matt Zeller

Matt ZellerThu, 25 Jun 2026, 11:55

Grains & Oilseeds

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