April 27

4/27 - Spring planting season is here, but this year’s U.S. corn crop will likely incur some collateral damage from the war in Iran. Middle Eastern countries produce over 40% of globally traded nitrogen fertilizers, especially urea and ammonia-based fertilizers. Much of that production (like oil) is trapped in the Persian Gulf. It couldn’t have come at a seasonally worse time of year for farmers. Nitrogen-based fertilizers are applied to 95% of U.S. corn acres. Of these, anhydrous ammonia, urea, and urea-ammonium nitrate (UAN) prices are all 30% to 48% higher than a year ago. So far, the USDA is still projecting 2025/26 U.S. corn production to be record-large at 17.02B bushels. But corn is much more fertilizer-intensive than soybeans, and farmers will be hedging their planting decisions right up until the last minute. Expect some corn acreage to shift to soybeans and for corn prices (currently $4.55/bushel) to exceed $5.00 this summer.