SIOUX FALLS, SOUTH DAKOTA (RFD NEWS) — Energy markets are showing signs of volatility as oil futures drop sharply amid renewed optimism over efforts to ease tensions in the Middle East.
Crude oil prices fell as much as $10 per barrel overnight, while equities moved higher following comments from President Donald Trump indicating progress in negotiations with Iran. The president also announced a pause in “Project Freedom,” a U.S. military effort aimed at repositioning ships out of the Strait of Hormuz.
Markets appeared to respond positively, with both Brent and WTI crude prices declining. However, diesel prices continue to trend higher. According to AAA, the national average for diesel rose two cents to $5.67 per gallon.
From gasoline to natural gas, analysts say energy market swings are continuing to ripple into agriculture — Markets Expert Chris Swift explains the impact on the corn market:
“It makes it more difficult to make a decision on corn based upon energy, and we are just one headline, one tweet away from the next 20-, 30-cent move in corn, higher or lower, either one,” Swift told RFD News. “That’s pretty much in all of these markets. Soybeans are now back above $12. We saw them trade above $12 after a very long sideways trading period. So, I’m just not real sure that we’re going to see a whole lot higher or lower in the grains, but a lot more volatility. I think, because of the energy aspect, we will continue to see more and more volatility because of that.”
That volatility is also raising concerns in livestock markets, according to analyst Darin Newsom.
“How long can this cash market stay where it is, given what we’re seeing, say in gasoline prices, diesel prices, crude oil prices?” Newsom told RFD News. “You know, there’s going to be a break at some point. And not just in the cattle markets, not just in the beef markets, but I don’t know that the U.S. stock markets can handle this as well, because there is no end in sight to how far energies could run up.”
Some states have seen diesel prices climb more than 50 percent since the war with Iran began. Treasury Secretary Scott Bessent says he expects oil prices to decline significantly by the midterm elections, forecasting they will ultimately end up lower than before the war began.
Oil prices are showing signs of decline amid optimism surrounding Iran, but diesel prices remain elevated, and markets continue to experience volatility, creating uncertainty across the ag economy.
Shaun Haney, host of RealAg Radio, joined us on Wednesday’s Market Day Report to provide perspective on current market conditions.
In his interview with RFD News, Haney discussed how much of the recent movement in energy markets reflects real stability versus short-term, headline-driven swings. He also addressed what ongoing volatility—particularly in energy—means for producers making decisions on crops, livestock, and input costs.
Finally, Haney highlighted what farmers should be watching most closely in the near term, even as some expectations point to lower oil prices over the longer term.
Grain Demand Steadies Fuel and Fertilizer Spikes
With a lot of uncertainty still on the table, soybean crush margins are up double digits from this time last year. One trader told us that higher prices are not deterring any buyers.
“Higher prices aren’t going to deter demand, unfortunately,” Sam Hudson told RFD News. “In fact, it’s very similar to crude oil. When you have your product prices rally, it becomes even more valuable or even more advantageous to own it. We’ve continued to see new highs in bean oil, supporting the crush. And yesterday, we saw the second-highest number of inspections for corn. So despite these higher prices, we’re still seeing a thirsty global market. I don’t see anything changing there. What the good trade’s concerned about is how the fertilizer and fuel impacts are going to influence our acreage and production here moving forward.”
With fertilizer prices rising, attention is beginning to shift toward fall supply planning. Economists urge farmers to reach out to their retailers now to discuss fall inputs — before it is too late.
“I’m not saying you have to lock it in. I’m not saying you have to hand them a check. I’m not saying you have to price it, but have a conversation,” explains Josh Linville with StoneX. “That retailer may sit there and say, ‘Dude, I know that’s what you’re gonna do. We’ve been working for years. I got you covered.’ Retailer may say, ‘Listen, I didn’t buy it because I don’t know what to do, and I can’t take the risk. I need to have a really good idea what you’re doing so I can make plans to have this stuff in place when you’re ready to step in and give me the money to pay for the product.’”
Fertilizer prices have surged since mid-February, with urea up 41 percent and anhydrous ammonia up 29 percent, according to DTN. On the year, urea prices are up nearly 50 percent, while potash and 10-34-0 have seen more modest gains.
E15 Debate Gains Momentum
Lawmakers are also turning their attention to biofuels policy, with a House vote on year-round E15 sales expected soon. Growth Energy CEO Emily Skor told RFD News that the industry is pushing hard to secure passage.
“It is a compromise bill, so there’s something for ethanol, there’s something for the oil refiners,” Skor explains. “We have a broad coalition of support — farmers, ethanol producers, fuel retailers, and the majority of oil refiners. So as you said, we have an up or down vote. I think it’s scheduled for next week, right now. And so our sole focus is whipping the vote. We know we have the support of Midwestern champions, but we need 216 votes. And so we are canvassing all of Congress to make sure that legislators understand giving us year-round E15 is a boost for the farm economy, and it is a guarantee for something drivers desperately need, and that’s access to lower-cost fuel.”
Supporters argue the policy would benefit both producers and consumers, though some opposition remains. With the Farm Bill now awaiting Senate input, corn and ethanol groups are shifting their focus back to the House, where a vote on year-round E15 sales is set for next week.
National Farmers Union President Rob Larew calls this one of several “missed opportunities” to address the needs of Farm Country in the traditional Farm Bill.
“This is one of these things that, for those of us in this space, we don’t understand why it has been so hard to get this across the finish line,” Larew said. “You have the White House behind it, you have the Senate and the House and bipartisan members, and yet there’s a small handful of folks who have some problems with it, but there is strong support out there, and particularly now, with the fuel prices that we’re facing, this is a win, win, win for everyone. We are 100% behind this. We understand the argument that’s being made, that when you try to add other issues not completely in the jurisdiction of the House Ag Committee, it can slow things down, but I don’t think any of us can argue that this is a fast-moving farm bill. We can take the time to make sure we get the policy right.”
Fertilizer Policy and Farm Bill Outlook
Larew says fertilizer affordability remains a top concern as lawmakers continue work on the Farm Bill. He is hopeful to see a boost in domestic production to bring prices down, likely through the Homegrown Fertilizer Act, which, unlike E15, was included in the broader bill.
“We need to be investing more into opening up further processing here in the U.S.,” Larew said. “We need to be investing in a domestic production of fertilizer. Yes, it is going to take years for that to actually come on the market and have a lasting impact, but if we don’t start today, that’s going to be an even longer runway before we actually have that.”
Industry leaders also point to regulatory reform as a key factor in boosting supply.
“In a very kind of big umbrella general way, overall increasing domestic production, fertilizers here in the United States, making sure that permitting is going in an effective way, and it doesn’t take 10 years and tens of millions of dollars to expand a mine or create a mine. The designation of potash and phosphate as critical minerals would help with the permitting process and cut some of that red tape.”
The Senate is targeting late May or early June for a farm bill markup. Unlike the House, the Senate will need 60 votes to advance the legislation.
Meanwhile, USDA says a combination of new investments and facility expansions could increase U.S. nitrogen production by more than 30 percent over the next two years.
