Weather issues persist in the U.S., while a blocked shipping lane roils markets around the world

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The Strait of Hormuz is about halfway around the world from the upper Midwest, yet its volatility is continuing to cause market fluctuations since the U.S./Israel conflict with Iran began.

That small shipping lane continued to shape the conversation on the Agweek Market Wrap on Friday, April 24, between Don Wick of the Red River Farm Network and Randy Martinson, president of Martinson Ag Risk Management. It’s a topic that continues to create no shortage of news for the agriculture markets.

The lack of movement in the Strait of Hormuz has been causing the price of crude oil and fertilizer to increase, which are both weighing on the markets and the minds of producers who are starting to scratch dirt across the upper Midwest.

Martinson said among the rising inputs is the highlight of rising wheat prices. This comes as a war premium has been placed on the commodity and it comes as 70% of the country’s winter wheat acres are now in some level of drought. It’s to the point where rains in the forecast are not likely to help the losses that many producers may see in some wheat producing states like Oklahoma, Colorado or Kansas.

That’s been supportive to wheat prices.

“But we are seeing Minneapolis wheat trading to, you know, the September, the new crop months on, are trading at contract highs,” Martinson said. “We’re seeing two-year highs as far as the Kansas City wheat market is concerned.”

Wick brought up the impact of the Strait closure on other areas such as the upcoming meeting between President Trump and President Xi in May. The closure is preventing China from getting all of their energy needs met. This is likely causing some animosity. One indicator of that is that China just bought eight to 10 cargoes of soybeans from Argentina, even though the Tump administration has been attempting to have China buy more grains from the U.S.

Wick mentioned that planting progress has been slow and while some areas were very wet, it hasn’t taken long for other areas to get very dry. Martinson said delayed planting is a possibility, especially for corn and spring wheat. While it is still early, many producers would like to have wheat in the ground by now, but that progress has been slow moving.

Cattle slip

Cattle markets slipped a little in the last week following contract highs from about 10 days ago. Martinson said it appears the market has reached a point that consumers are showing resistance to spending more money on beef in a time when other expenses, such as gas prices, are eating away at some of their income.

“I would expect that right now, at this point, you know, the consumer, is looking for something a little cheaper, and we’ve got pork and poultry lower prices than last year at this time on the retail level,” Martinson said. “So that’s causing a little bit of trouble.”

As barbecue season heats up, consumers will begin to show what they are willing to pay and what protein they are more likely to pick up in the grocery store.

Looking at the week ahead, weather and the war in Iran will continue to dominate headlines for major crops in the U.S. The fertilizer issue is a concern for many right now, but more are looking at it being an issue they need to prepare for in 2027, as well.

(The Agweek Market Wrap is sponsored by Gateway Building Systems.)]]>