MEMPHIS, TENN. (RFD NEWS) — Escalating tensions in the Middle East are slowing — and now disrupting — shipping through the Strait of Hormuz, sending shockwaves through global energy and fertilizer markets just as U.S. farmers prepare for spring planting.
Energy markets are reacting quickly, according to Darin Newsom, senior market analyst at Barchart.
“Brent crude is the global market, so when we see these geopolitical problems arise, we need to watch the Brent crude market as well, and then we could start talking about spreads between Brent and West Texas Intermediate,” Newsom said.“Here, as we go into planting season, I think one of the keys is going to be the distillates market. It has just exploded. It was 40-some cents higher on Monday, and it’s up another 40-some cents again overnight. And so, what this is, it’s feeding oil, jet fuel, and all these other things — but more importantly, it’s diesel fuel — and so, that’s the diesel price if we do not have our needs locked in heading into spring.”Newsom adds that the energy market is running hot, and it’s unclear when prices might cool off. Federal officials say the U.S. Navy will begin escorting tankers through the Strait in response to the disruptions.
Fertilizer Markets Feel Immediate Pressure
Fertilizer markets are also reacting. Urea prices at the Gulf jumped roughly $70 per ton this week as traders track developments in the region.
Analysts with StoneX warn the timing could not be worse for agriculture.
Josh Linville, fertilizer analyst at StoneX, says supply chain timing is critical this time of year.
“There are certainly worse times of the year, and this is one of them. When you sit there and think about the fact that we feel kind of in the lead-up to the spring season, but from a logistical standpoint, we’re already there. It typically takes us about 30 days just to come from the loop and reach U.S. shores. And then those 30 days, or two full weeks, to get up the system. So, anything that would have shipped today is arriving on April one, April seven, in that first week. Well, that’s what we really need for our spring lead-up, so this literally could not be happening at a worse time.”Linville notes the global fertilizer market was already tight.
“It’s not even just that body of water. We’re already dealing with China not exporting. We’re already dealing with European production rates being 75 percent of normal. Now we’re losing the Strait of Hormuz, and all of a sudden, close to that body of water, Israel shut down their natural gas production. They see a lot of Egyptian production. They’re a major player, so we are ticking off the top 10 list of urea exporters very, very quickly.”He says urea prices are rising faster and sharper than many expected.
Ethanol Demand Remains Strong Despite Volatility
Despite energy market volatility, ethanol demand continues to show strength.
Industry leaders report ethanol exports surged by more than 300 million gallons over the past year, surpassing 2 billion gallons for the first time and reaching 2.18 billion gallons. Total ethanol production hit a record 16.49 billion gallons in 2025, with the national blend rate topping 10.5 percent for the first time.
USDA data shows a slight drop in corn used for ethanol in January, but production of distillers’ grains, soybean oil, and soybeans remains strong. Industry groups continue pushing for expanded E15 sales to maintain demand growth.
Soybean Prices Show Signs of Recovery
Meanwhile, grain markets are offering mixed signals.
Ag economist DuWayne Bosse says soybean prices have staged another rally after retreating earlier this winter.
“First of all, we had a wonderful rally in the world of cash soybean prices back in November, just three months ago. And about the time I started to talk about it, we were a dollar to a dollar-and-a-quarter off our harvest lows in mid-November. I started talking about it, and of course, it went away, and it faded back to where we were, you know, by early January. Well, we’ve got another rally. And in fact, right now, we’re talking a cash price of $10.50 a bushel in Southern Minnesota. And that is the best we’ve seen since July of 2024.”
Bosse suggests producers consider marketing soybeans at current levels, but is less confident about corn.
“You’ve got to take a hard look at pricing some new crop soybeans at that level and hope the heck you’re wrong if you do it. Now I gotta tell you, I’m just not that enamored with corn prices. Yes, they are up modestly. We’ve got an opportunity, a new crop in December, somewhere around 4.65. Man, I have a hard time with it. I guess if you screw up the courage, you get a little bit sold, because I like to remind people that we went sub $4 with each of the last two new crop December contracts in 2024 and ’25.”He adds that February is typically not the strongest marketing month for grains, though old-crop soybean opportunities may lead into new-crop sales later in the season.
As Middle East tensions disrupt critical energy shipping lanes, farmers heading into planting season are navigating higher diesel and fertilizer costs — even as ethanol demand and soybean markets show pockets of opportunity.
ASFMRA’s Current Spring Planting Outlook
From shifting weather patterns to ongoing economic pressures, farmers are keeping a close eye on multiple factors as the spring planting season approaches.
George Baird with the American Society of Farm Managers and Rural Appraisers (ASFMRA) joined us on Wednesday’s Market Day Report to share insight from his region, particularly across the Mid-South.
In his interview with RFD NEWS, Baird discussed current field conditions, noting the impact of warm weather on planting progress and what producers are seeing in terms of acreage changes compared with previous years. He also addressed financial concerns facing landowners and growers, including challenges with financing and other economic pressures.
Baird highlighted additional emerging issues that have surfaced in recent weeks, offering his perspective on how producers can navigate this evolving landscape.
