Grains begin Monday with modest losses across corn and soybeans as the Strait of Hormuz reopening deflates last week's geopolitical risk premium — but persistent HRW dryness and Indonesia's B50 mandate provide offsetting support.
The grain complex enters the week carrying significant Friday-session baggage: managed money slashed net long positions in both corn and soybeans in the week ending April 14, crude oil collapsed $9.12 Friday on Iran's Strait of Hormuz agreement, and China's agriculture ministry released a decade-long outlook projecting a 26.2% decline in soybean imports by 2035. Against that, wheat opens higher on unresolved western HRW dryness, and Indonesia's confirmed July 1 B50 biofuel mandate provides a structural positive for soy oil demand heading into the week.
Hormuz Reopening Removes the Energy-Fertilizer Premium That Supported Last Week's Rally
Friday's agreement by Iran to reopen the Strait of Hormuz triggered the crude oil collapse that now carries into Monday's open, removing the single biggest macro support for grain prices over the past several weeks. The risk premium built into fertilizer costs, biofuel feedstock demand, and energy-linked soy oil has deflated materially overnight. US fertilizer buyers were reportedly diverting imported urea barges at the Port of New Orleans for export overseas during the week, incentivised by higher global prices — a dynamic that will now unwind as Hormuz flows resume and global urea prices pull back from near-$1,000 per ton levels. The deflation of the energy bid is the primary headwind for corn and soy oil at Monday's open.
China's Decade Outlook Projects Structurally Lower Soybean Import Demand
The China Agricultural Outlook 2026–2035 report released Monday morning projects soybean imports declining 6.1% in 2026 year-on-year, with a long-term trajectory falling to 82.55 MMT by 2035 from a record 111.83 MMT in 2025 — a 26.2% decline over the decade. Grain imports are projected to fall to 115 MMT by 2035 from 140.56 MMT in 2025. Separate data confirmed that China's US soybean imports recovered in March from the prior two months following the late-October trade truce, but volumes remained sharply below year-earlier levels. The combination of the structural import reduction outlook and the near-term recovery lagging expectations adds a bearish overlay to the soybean complex at the start of the week.
Indonesia's B50 Mandate Confirmed for July 1 — a Structural Positive for Soy Oil and Palm
Indonesia's agriculture minister confirmed Sunday that the country will stop diesel imports from July 1 as B50 — a 50% crude palm oil and 50% diesel blend — takes effect, eliminating diesel imports entirely. This is a direct demand-positive signal for palm oil and, by extension, soy oil given cross-commodity substitution dynamics. Indonesia's B50 capacity was cited at 22 billion liters of biodiesel production, and additional 2 to 3 billion liters of capacity was flagged as needed. This mandate, particularly given Indonesia's role as the world's largest palm oil producer, structurally competes with soy oil in global vegetable oil markets and is a medium-term supportive factor for soy oil prices that partially offsets the Hormuz-related deflation.
Russia Zeroes Wheat Export Duty and Opens Caspian Sea Trade Route
Russia cut its wheat export duty to zero for April 22–29 from 329 rubles per ton the prior week, reducing the competitive friction on Russian wheat in export markets and applying direct price pressure on US and EU origin. Separately, Russia shipped wheat to Iran via the Caspian Sea for the first time in years during Q1 2026, with grain shipments from the Astrakhan region rising 61% to 730,000 tons in the first quarter. The Caspian corridor — which previously handled only barley and corn for Iran — now carries wheat as traditional Black Sea routes to Hormuz-facing Iranian terminals were disrupted by the conflict. Russia's seaborne export rebound of 113.7% year-on-year in March, combined with a zero duty and new routing capacity, sustains the competitive pressure on global wheat prices heading into the week.
US Plains Dryness Persists; Frost Risk Returns for the Northern Corn Belt
NOAA's updated forecast following the weekend shows very little precipitation expected across western Kansas through the Texas Panhandle — the same HRW winter wheat areas that drove KC HRW to a 46-cent weekly gain last week. Eastern Kansas through southern Illinois and Indiana is expected to receive some rainfall, continuing the split between SRW relief and HRW stress. In contrast, a new weather risk has emerged: cold temperatures and widespread frost are forecast for the Northern Plains and western Midwest early in the week, potentially affecting spring sowing timing and early-planted crop emergence. The Canadian Prairies are also flagged with ongoing cold conditions limiting soil temperature recovery. These frost risks provide a modest upside backstop for wheat and early-planted spring crops, and are the primary reason CBOT wheat is opening higher on Monday.
Managed Money Carried Heavy Liquidation into the Weekend — Positioning Risk Remains
CFTC data for the week ending April 14 showed managed money cutting 59,149 contracts from their corn net long to 159,483 contracts — primarily via new short interest — and trimming 14,479 contracts from their soybean net long to 175,151 contracts via long exits. Soybean meal specs moved the opposite direction, adding 42,203 contracts to their net long to 135,743, while bean oil managers trimmed 2,362 contracts from their record net long to 148,320. CBT wheat specs added to their net short at 7,266 contracts while KC HRW specs extended their net long to 16,924 contracts. The heavy fund long liquidation in corn heading into the Hormuz announcement creates a market with reduced speculative support for any counter-trend bounce, while the large residual soy oil long remains vulnerable to further energy-linked unwind if crude oil continues to soften.
Brazilian and Argentine Supply Overhang Grows; Domestic Prices Declining
Brazil's soybean harvest reached 92% complete as of Thursday per AgRural, with CEPEA reporting the ESALQ Paraná soybean index falling 1.2% in the April 9–16 period as the BRL strengthened to its lowest against the dollar since March 2024. Brazilian corn prices dropped 4.8% between March 31 and April 16 per CEPEA, with the ESALQ corn index at BRL 67.01 per bag, pressured by ample supply and weak buyer interest. Abiove raised Brazil's 2026 soybean export forecast to a record 113.6 MMT while simultaneously cutting the average export price forecast to $370 per ton from $440 per ton, confirming that volume records are arriving at sharply discounted prices. Argentina's Buenos Aires Grains Exchange raised its corn harvest estimate to a record 61 MMT during the week, with 12.3 MMT of corn export registrations reported for March and April. The combined Southern Hemisphere supply overhang remains the dominant structural bearish weight across the soy and corn complexes.
El Niño Emerging — Long-Term Risk to India Wheat and China's Late Rice Crop
China's National Climate Centre expects El Niño conditions to emerge in May and develop into a moderate-or-stronger event through summer and autumn, with the event expected to last at least through year-end. For India, independent analysis suggests the 2026 monsoon is forecast at approximately 840 mm, 3% below normal, with 60% of analog years producing below-normal rainfall and 50% failing entirely. The dry risk is concentrated in north and central India, most relevant to the wheat crop planted after the monsoon season ends — a factor that reduces India's irrigation reservoir levels and soil moisture heading into the 2026/27 wheat planting window. In China, El Niño conditions raise late-season rice harvest disruption risk. While these risks are forward-looking, they introduce a medium-term bullish tail risk for wheat and rice that the market will progressively price in if El Niño development confirms through May.
Wheat
May '26 CBOT SRW wheat closed Friday at $5.91 1/4, down 7 1/4 cents on the session, but opens Monday up 3 3/4 cents as persistent western HRW dryness and frost risks across the Northern Plains provide support heading into the week. The NOAA 7-day QPF confirms no meaningful precipitation for western Kansas through the Texas Panhandle, sustaining the drought stress that drove last week's 46-cent KC HRW weekly gain. Old-crop wheat export commitments stand at 24.54 MMT — slightly above the USDA projection at a 102% average pace — limiting the urgency for additional demand-driven support, but the supply-side weather story remains the dominant driver. Russia's wheat duty cut to zero for April 22–29 is the week's key competitive headwind.
Corn
May '26 CBOT corn closed Friday at $4.48 3/4, up 1/4 cent, and opens Monday down 1 1/4 cents as the Hormuz reopening removes the energy and ethanol premium that partially underpinned last week's positioning. Managed money slashed 59,149 contracts from their net long in the week ending April 14, taking the position to 159,483 contracts — the heavy short interest added leaves the market exposed to further pressure if no fresh bullish catalyst emerges. Export commitments of 72.79 MMT are up 29% year-on-year but tracking at 87% of the USDA projection versus the 90% average pace. The Argentine corn harvest revision to a record 61 MMT and Brazil's CEPEA corn index declining 4.8% this month both reinforce the global supply overhang narrative.
Soybeans
May '26 CBOT soybeans closed Friday at $11.67 1/4, up 3 1/2 cents, and opens Monday down 3 cents as China's decade-long import reduction outlook and continued record South American harvest progress combine with the Hormuz-related soy oil deflation to pressure the complex. The source did not provide an intraday opening price beyond the indicated "down 1 to 3 cents" direction. Brazil's harvest at 92% complete removes weather uncertainty, while Abiove's record 113.6 MMT export forecast at a sharply reduced $370 per ton average price confirms abundant and competitively priced supply. The structural offset remains the NOPA crush pace — the second-highest monthly total on record in March — and meal specs extending their net long aggressively, signalling that physical protein demand remains intact beneath the headline bearish supply narrative.