The Grain Rally Marches On!
Energy prices lead the way higher, outside markets under pressure
(Reuters) – Crude oil benchmarks rose more than $4 on Tuesday, soaring for a third session as the U.S.-Israeli conflict with Iran widens, disrupting fuel shipments and heightening fears of further Middle East oil and gas supply disruption.
The U.S. and Israeli air war against Iran has widened since Israel’s first attacks on Saturday, with Israel attacking Lebanon and Iran responding with strikes against energy infrastructure in Gulf countries and tankers in the Strait of Hormuz, through which a fifth of the world’s oil and liquefied natural gas typically passes.
Corn
Technicals (May)
Grain markets are moving higher this morning along side the energy complex, with oil futures posting a new high for the move, reaching the highest price since June. Yesterday’s reversal lower may have not felt great for the Bulls, but there wasn’t any technical damage done as Friday’s lows held, and more significant support (439 3/4-441 3/4) remained just below that. Prices are knocking on the door of yesterday’s high and our resistance pocket, 453-454 1/2. If the Bulls can clear this hurdle, it would open the door for another leg higher with 460-461 being the next objective. Last week in our interview with AgriTalk we talked about money flow across commodities being an under represented catalyst as a potential tailwind for grains. Historically this is a time of year where we start to see ranges and volatility expand, throw in volatility and range expansion across commodities as a whole and it starts to amplify it.
Technical Levels of Importance
Resistance: 453-454 1/2****, 460-461***
Pivot: 447-448 1/4
Support: 439 3/4-441 3/4****
Headlines
(Reuters)
Planting of Brazil’s second corn crop in the key center-south region reached 66% of the estimated area, compared with 80% a year earlier, AgRural said.
The pace is the slowest since 2022, it noted, as rainfall and delays in the soy harvest hinder fieldwork in several areas.
The first-corn harvest hit 36%, below the 46% seen a year earlier.
Fund Positioning
Friday’s Commitment of Traders report showed funds were net buyers of 29,079 Futures contracts. Broken down, that was 18,994 of short covering and 10,085 of new longs. This is the smallest net short position since January 6th, 12,830.
Seasonal Tendencies
Below is an updated look at historical price averages over different time frames, 5, 10 ,15, 20, and 30 years. Historically the month of March has proven to be on the choppier side, with shorter term price averages looking more favorable than the longer term ones.
Soybeans
Technicals (May)
May soybeans saw a wide ranging trade yesterday, positing a high for the session early in the Sunday night trade, then reversing to finish near the lows of the session. This morning, prices are right back near yesterday’s high as money flow helps levitate prices yet again, bringing the RSI (relative strength index) back into overbought territory. Though we continue to believe this is a spot for producers to play defense against, there is still upside momentum risk.
Headlines
(Reuters)
Top US, Chinese trade negotiators set to meet in mid-March, Bloomberg News reports
USTR Scott Bessent, Chinese Vice Premier He Lifeng expected to meet in Paris
Chinese purchase commitments for Boeing, US soybeans on the agenda
Meeting suggests Xi, Trump summit will go ahead in late March
Brazil’s 2025/26 soybean output is expected to reach 178 million metric tons, agribusiness consultancy AgRural said on Monday, lowering its forecast from 181 million tons due to drought-related yields losses in Rio Grande do Sul state.
Brazilian farmers had harvested 39% of their soy crop as of last Thursday, AgRural said, up 9 percentage points from the previous week but lagging the 50% reported a year earlier.
The harvest pace remains the slowest since 2020/21, it said.
Heavy rains disrupted harvesting in several states, including Mato Grosso, Mato Grosso do Sul and Goias, the consultancy said.
Rio Grande do Sul, on the other hand, will need more rainfall in the coming weeks to avoid further losses, AgRural said
StoneX expects Brazil’s 2025/26 soybean output to reach 177.8 million tons, 2.1% less than previously estimated.
Fund Positioning
Friday’s Commitment of Traders report showed funds were net buyers of 12,411 Futures contracts. Broken down, that was 8,323 of short covering and 4,088 of new longs. This is the largest net long position since December 9th.
Seasonal Tendencies
Below is an updated look at historical price averages over different time frames, 5, 10 ,15, 20, and 30 years. Historically the month of March has leaned more Bearish, but counter seasonal trends do happen, so take it with a grain of salt. At the very least, this type of study may just be enough to temper the expectations of the Bulls or at least spur them into protecting long exposure (physical or paper).
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