Middle East conflict begins to reshape North American grains trade

North American grain markets have seen myriad responses to the war in the Middle East, with participants citing freight volatility and shifting global trade dynamics as key concerns.

US soybean market fears China backing off

Participants in the US soybeans market fear that China will not buy from the US for the duration of the conflict, but remain hopeful about a late March meeting between US President Donald Trump and China's President Xi Jinping.

"I don't believe that China will buy US beans while the conflict is going on," a trader in the FOB Gulf market said. "They back Iran."

Little trading activity has been heard between the US and China since the war began Feb. 28.

"They have essentially bought nothing over the past six weeks," said S&P Global Energy CERA senior analyst Jack Larimer. "So I think it really depends on how the conversation between the two countries goes."

Prior to the late March meeting between Trump and Xi, a meeting between US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng in Paris was scheduled for the week starting March 9, but no further updates have been released.

Platts, part of S&P Global Energy, assessed SOYBEX FOB New Orleans for April shipment at $479.14/metric ton March 11. The outright CIF New Orleans price for March shipment was assessed at $475.46/mt.

Price uncertainty halts wheat markets

As the Middle East war has disrupted global shipping routes, buyers have largely stepped back from both the Canadian and US wheat markets, unable to justify purchases at elevated prices amid skyrocketing freight costs.

Spring wheat futures surged more than 20 cents/bushel March 6 on geopolitical risk, lifting FOB prices proportionally across North America. While farmers welcomed higher prices, international buyers have effectively disappeared.

"I feel FOB [prices] are getting weaker with no demand, since buyers can't afford the freight," a US trader said March 11. Canadian traders echoed a similar sentiment, noting that FOB Vancouver prices had also dipped.

Freight rates have reportedly jumped $5-$10/mt across Pacific routes amid Middle East uncertainty and ship shortages. At the new wheat price levels, buyers cannot absorb these elevated freight premiums.

Little trading activity has been heard between major buyers and North American exporters since the conflict intensified.

Market participants remain hopeful that geopolitical tensions will ease and that freight availability will improve, potentially allowing buyers to re-enter the market. Until then, the combination of higher wheat prices and freight premiums has effectively priced international demand out.

Platts assessed Canada Western Red Spring Wheat 13.5% FOB Vancouver 30-45 days forward at $274.85/mt March 11, 73 cents below March 10.

Soaring freight supports US DDGS

The US dried distillers' grains with solubles market has strengthened as participants respond to rising freight costs and energy market volatility linked to the conflict.

Market sources said the geopolitical situation has introduced significant uncertainty into global logistics and fuel markets, making it harder to set prices. "Freight is a wild card right now," one trader said, noting ships are increasingly worried about fuel availability in the coming months as refinery disruptions affect supply. Another concern is the possible closure of shipping lanes to avoid surcharges.

Crude oil price volatility also has added pressure, with some exporters pausing offers while assessing logistics risks.

The uncertainty has supported DDGS values across several markets. Since the conflict began, CIF New Orleans values have risen about $5/short ton, while Chicago truck values have increased roughly $6/st, a sharp move in a short period. Union Pacific California rail values have also risen.

Platts assessed CIF NOLA DDGS barges for the March shipment at $224/st March 11, up $4 from March 10. The Chicago DDGS truck market for the same delivery period was assessed at $195/st.

Participants said the ultimate impact on DDGS trade will depend on how long disruptions to energy markets and shipping routes persist, with one broker describing the outlook as a "big unknown."

Fertilizer supply fears raise US corn prices

US corn prices have rallied due to the conflict, driven mainly by concerns about fertilizer supply at the start of the US planting season.

A broker said the market has "concerns regarding the Strait of Hormuz potentially impacting fertilizer availability."

Jed Bower, president of the National Corn Growers Association, said March 10 that farmers have navigated extremely high fertilizer prices for several years and have faced sustained expensive input prices for the past four years.

"The uncertainty in the Middle East complicates this situation, as farmers will soon be planting the second-most-expensive corn crop on record," said Bower, adding that they would welcome conversations with fertilizer providers on options to weather the current uncertainty in partnership with their most important customers.

A farmer representing a group of 26 farmers across the US, from Ohio to California, said that farmers are choosing to cut fertilizer application rates and improve efficiency without significantly sacrificing yields.

A Northern Iowa-based broker for farmers said, however, that they "will buy as much as they need to or can buy, even if some of the farmers are with locked contracts."

Platts assessed the outright price for CIF New Orleans for March shipments at $213.10/mt March 11, up $2.25 since March 2; April shipments at $212.70/mt, up $1.85 in the same period; and FOB US Gulf May shipments at $215.06/mt, up $2.56 since March 2.