Grain prices have moved higher over the past two weeks, with the conflict involving Iran, the United States, and Israel identified as the most significant driver. Since the start of the conflict, Brent crude oil prices have increased by $8.50, reaching $81.40 per barrel. The effect on grain markets operates through multiple channels: higher biofuel demand, increased fertiliser and input costs linked to energy prices, and rising shipping costs across all vessel types due to higher bunkering costs, insurance premiums, and route changes.

Additional support came from lower 2026/27 harvest expectations, delayed corn plantings, and expectations around the imminent finalisation of U.S. biofuel policy.

Wheat: conflict and supply tightness push prices higher

CBOT SRW wheat increased to 574 US cents/bushel from 542 US cents/bushel two weeks ago. Euronext milling wheat rose to EUR 193/mt from EUR 191/mt. Support came from the Middle East conflict, bullish soy prices, a weaker euro, and expectations of lower supply in 2026/27. The EUR/USD rate dropped to 1.16 from 1.19 two weeks ago, making European grain exports more competitive.

The International Grains Council (IGC) noted that the initial 2026/27 global wheat balance looks slightly tighter, with a smaller harvest expected alongside continued consumption growth. As of 23 February, 84% of France’s soft wheat crop was rated good or excellent. The USDA sees 2026 U.S. wheat area slipping to 45.0 million acres, slightly below last year, with 2026/27 ending stocks broadly steady year-on-year.

Corn: ethanol channel and delayed plantings add support

Euronext corn rose to EUR 204/mt from EUR 189/mt two weeks ago. CBOT corn increased to 434 US cents/bushel from 426.25 US cents/bushel. The Middle East conflict supported corn through the ethanol channel, while strong U.S. exports and delayed Brazilian safrinha planting added further support.

U.S. corn inspections for the week ending 26 February came in above expectations at 1.86 MMT. Cumulative exports reached 39.62 MMT, sharply above 27.27 MMT at the same point last year. USDA sees 2026 U.S. corn area declining to 94.0 million acres from 98.8 million in 2025. With normal weather, production is forecast at 15.755 billion bushels, the second-largest on record, while 2026/27 ending stocks are pegged at 1.837 billion bushels versus 2.127 billion a year earlier.

In Brazil, 65% of safrinha corn had been planted as of 28 February, slightly behind last year but ahead of the five-year average. Safras & Mercado estimates Brazil’s total 2025/26 corn output at 141.71 MMT, down marginally from its previous forecast.

Barley: higher grain prices and strong exports underpin gains

The IGC barley sub-index increased to 245.91 from 242.75 two weeks ago. Demand for barley remains strong. EU barley exports in the 2025/26 marketing year reached 6.2 MMT as of 23 February, up 79% year-on-year. Australia harvested its largest barley crop on record at 16.33 million tonnes, according to the latest ABARES report. Canadian barley production in 2025/26 is estimated at 9.7 million tonnes by Statistics Canada, up 19% from the prior season on record-high yields.

Soybeans: biofuel policy and Brazil output revisions in focus

CBOT soybeans increased to 1,156 US cents/bushel from 1,134 US cents/bushel two weeks ago. FOB Paranaguá rose to $429/mt from $422/mt. Support came from higher Brent prices, expectations around U.S. biodiesel policy finalisation, and a trimmed forecast for Brazil’s soybean crop.

StoneX lowered its forecast for Brazil’s 2025/26 soybean crop to 177.8 MMT, citing weather-related damage in Rio Grande do Sul, while AgRural cut its estimate to 178 MMT for similar reasons. Rabobank, in contrast, raised its forecast to 181 MMT, citing good-to-excellent conditions across most regions.

The U.S. EPA has sent proposed 2026–27 biofuel blending quotas to the White House, with finalisation targeted by end of March. China’s soybean purchases from the U.S. remain a key variable, with the Supreme Court’s decision to cancel certain Trump-era tariffs creating uncertainty over future buying intentions.

Outlook

The Middle East conflict is providing near-term price support across the grain complex, operating through the energy and biofuel channels. The key question for markets is whether the conflict extends into Q2, which would introduce additional upside risk across wheat, corn, and soybeans. Seasonal harvest pressure is expected to return in Q3.

Access the full grains market analysis here: https://app.vespertool.com/market-analysis/2773