Oil futures surged Wednesday, with the U.S. benchmark jumping $2.86, or 4.6%, to $65.19 a barrel after Vice President J.D. Vance said Iran had yet to acknowledge core U.S. demands in nuclear talks in Geneva.
An Axios report on Wednesday said the U.S. and Iran were “closer to a major war in the Middle East than most Americans realize. It could begin very soon.”
The market reaction reflects fears that a conflict with Iran will affect crude flows from the Middle East. That’s down in part to Iran’s ability to shut down the Strait of Hormuz, a crucial transportation chokepoint. Oil flow through the strait averaged 20 million barrels per day in 2024, or about 20% of global petroleum liquids consumption, according to the EIA. And Iran itself, though heavily sanctioned, produces somewhere north of 3 million barrels a day of crude, analysts estimate, much of which goes to China.
The Axios report said a U.S. military operation against Iran would likely be a massive, weeks-long campaign that would look more like a full-fledged war than the pinpoint operation last month in Venezuela. Sources told the news organization it would likely consist of a joint U.S.-Israeli campaign much broader in scope than the Israeli led 12-day war last June, which saw the U.S. eventually join in to take out Iran’s underground nuclear facilities.
Soybean oil rallies: Bean oil futures rallied, with May hitting a contract high, after Reuters reported late Tuesday that the U.S. Environmental Protection Agency was expected to submit proposed biofuel blending quotas for 2026 to the White House this week for final review.
The Trump administration needs to move quickly to meet a self-imposed deadline to finalize U.S. biofuel blending mandates by the end of March. The measures were initially due at the end of last year. It typically takes the White House around 30 days to complete a review before a proposal becomes public.
- Background: EPA in June proposed total biofuel blending volumes at 24.02 billion gallons in 2026 and 24.46 billion gallons in 2027, up from 22.33 billion gallons in 2025, Reuters noted. The total included a target of 5.61 billion gallons of biodiesel, a big jump from 3.35 billion gallons in 2025.
- Reuters reported several weeks ago that EPA is now considering a slightly lower range of 5.2 billion to 5.6 billion gallons for 2026.
Biodiesel boom: Is the current soybean crush expansion a case of “Ethanol Boom 2.0?
The parallels are certainly there—rapid infrastructure growth, record-breaking volumes, and a policy-driven shift toward renewable fuels. However, the market dynamics driving today’s soybean-crush expansion offer some key differences from the corn-ethanol surge of the early 2000s. Understanding these nuances is critical for producers and stakeholders across the value chain.
- Check out this deep dive on why this cycle is different and what it means for the future of U.S. agriculture: The Soy Crush Expansion Draws Parallels to Ethanol Boom. Here Are the Differences.
The ‘h’ word: Minutes from Federal Reserve policy meetings are closely watched but often prove to be a bit of a snoozer. But the minutes from the Fed’s January policy meeting, when rates were left unchanged, released Wednesday afternoon offered a bit of a surprise, showing that some officials would have backed a policy statement that indicated a rate hike was just as likely as a rate cut to be the next move.
- “Several participants indicated that they would have supported a two-sided description of the Committee’s future interest rate decisions, reflecting the possibility that upward adjustments to the target range for the federal funds rate could be appropriate if inflation remains at above-target levels,” the minutes said.
The bottom line is that the Fed is seen as likely to deliver more easing but is in no rush as policymakers weigh sticky inflation versus a resilient jobs market.
- “The policy statement described economic growth as firm, and characterized the labor market as stabilizing, while indicating the need for further vigilance on inflation, particularly around tariff-related pressures,” said Russ Brownback, deputy chief investment officer of global fixed income at investment giant BlackRock. “So, with inflation still a near-term focus, we think the bar for policy easing is high, and we’ll likely need to witness either clear labor market deterioration or convincing disinflation.”
Early exit? European Central Bank President Christine Lagarde is expected to leave her post before the end of her non-renewable, eight-year term in October 2027, the Financial Times reported, citing a person familiar with her thinking.
The ECB sets monetary policy for the 21 countries that share the euro currency, making her one of the world’s most powerful central bankers. The report said she wants to leave before the French presidential election in April 2027 to allow outgoing French President Emmanuel Macron and German Chancellor Friedrich Merz to find a new head. The ECB told the FT that Lagarde remains “totally focused” on her mission and hasn’t made any decision about the end of her term.
Protein is the whey: Denmark-based Arla on Wednesday said it expects a global milk surplus to drive down dairy prices in 2026, Reuters reported, providing a fresh boost to demand for high-protein products such as whey and cottage cheese that are benefitting from the growing use of weight-loss drugs.
- The forecast came after the maker of Lurpack butter reported record 2025 revenue and a sharp rise in global milk output.
- High-protein products were in demand amid an underlying trend in favor of healthy and nutritious food, “but probably also because of some of the GLP-1 trends that we see,” said Chief Financial Officer Torben Dahl Nyholm, referring to weight-loss drugs such as Novo Nordisk’s Wegovy and Eli Lilly’s Zepbound.
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