Ag analysts are closely watching the Middle East after threats by Iran to close the Strait of Hormuz. The relatively short marine passageway is vital to global oil shipping, and any disruptions could translate to higher oil prices.
Iran is threatening to close the 90-mile passageway after U.S. attacks on nuclear facilities there. The route is a popular choice for oil shipments, carrying around 20 million barrels of oil each day. Analysts with Hedgepoint say any jump in oil prices will hit shippers first, with fuel being one of the largest costs.
Oil prices are up around 10 percent since earlier this month. AAA currently shows the national average for a gallon of diesel is around $3.69, and one month ago, the same gallon was $3.55.
Related Stories
Energy costs remain elevated for farms and rural households even as broader U.S. inflation shows signs of easing.
U.S. distillate inventories remain 12 percent below the five-year average as fall harvest approaches.
Higher production and exports continue providing an important source of demand for U.S. corn.
USDA reports higher corn use for ethanol and increased soybean processing compared with last year.
