Oil Surge Fuels Inflation Concerns, Delays Fed Rate-Cut Expectations

U.S.to push corn, other crops and meats as part of Trump/Xi talks

LINKS

Link:  Hormuz Closure Raises Risk of a Global Fertilizer Shock

Link: Video: Wiesemeyer’s Perspectives, March 6 (Interview with USDA Deputy Stephen Vaden) 

Link: Audio: Wiesemeyer’s Perspectives, March 6 (Vaden interview)

Updates: Policy/News/Markets, March 13, 2026

UP FRONT

 TOP STORIES

— Oil and Fed: Oil’s war-driven surge is keeping inflation fears elevated and pushing Fed rate-cut expectations further out.

— U.S./China Paris Talks: U.S. and Chinese officials will meet in Paris ahead of the Trump/Xi summit, with trade, energy, and farm purchases high on the agenda.

— Rubio China Trip: Marco Rubio is expected to join Trump’s China visit despite still being under Beijing sanctions.

— Taiwan Strait Transit: A U.S. patrol flight through the Taiwan Strait triggered limited PLA activity ahead of the Trump/Xi meeting.

— Ag Trade Deficit: The U.S. agricultural trade deficit widened in January as imports rose and exports softened.

— RFS Lobbying: OMB is facing an intense lobbying push as EPA’s RFS Set 2 final rule nears completion.

— Russian Oil Waiver: Treasury temporarily broadened a waiver for Russian oil already at sea to help calm crude markets.

— Clean Fuel Credit: Republican lawmakers are urging the administration to ensure farmers benefit fully from the 45Z clean fuel tax credit.

— Forced Labor Probes: USTR launched sweeping Section 301 forced-labor investigations covering 60 major trading partners.

— Tariff Refund Delays: CBP told the trade court its tariff refund system is still unfinished and provided no payment timeline.

— Cuba Talks: Cuba confirmed early-stage talks with Trump administration officials on a possible economic deal.

FINANCIAL MARKETS

— Stocks Today: U.S. stocks rose Friday as oil eased slightly, though markets remain unsettled by the Iran conflict and energy volatility.

— Stocks Yesterday: Major U.S. indexes fell sharply March 12 as investors reacted to the oil shock and inflation concerns.

— GDP and Inflation: Revised GDP showed weaker fourth-quarter growth while core inflation stayed firm, reinforcing a cautious Fed outlook.

— Rate Cuts Delayed: Markets have pushed expectations for the first Fed rate cut into 2027 as higher energy prices lift inflation risks.

— Fund Outflows: Global equity funds saw their largest weekly outflows since December as investors moved toward safer assets.

AG MARKETS

— Farmer Selling: The grain rally tied to the Iran war is prompting U.S. farmers to sell stored corn, soybeans, and wheat.

— Brazil Soy Checks: China’s tighter inspections of Brazilian soybeans may briefly open a window for additional U.S. exports.

— Cotton AWP: Cotton’s Adjusted World Price edged higher this week, slightly reducing the available loan deficiency payment.

— Ag Futures: Most major agricultural futures closed higher March 12, led by soybeans, soybean meal, corn, and live cattle.

ENERGY MARKETS & POLICY

— Friday Oil Dip: Oil prices pulled back Friday but remained on track for strong weekly gains as Hormuz disruptions persisted.

— Thursday Oil Spike: Crude surged Thursday to multi-year highs as attacks on regional energy infrastructure deepened the supply shock.

TRADE POLICY

— USMCA Support: Republicans are quietly lining up behind USMCA renewal ahead of the 2026 review despite Trump’s public doubts.

LABOR & IMMIGRATION POLICY

— Visa Changes: USDA Secretary Brooke Rollins said the administration is exploring visa changes to address labor shortages in aquaculture and other sectors.

— Tyson Grant: The Labor Department awarded $1.6 million to assist workers affected by Tyson’s Lexington, Nebraska plant closure.

WEATHER

— NWS Outlook: The latest forecast calls for Upper Midwest snow, a new Plains winter storm, heavy Northwest precipitation, early western heat, and critical High Plains fire risk.

TOP STORIES—Oil surge fuels inflation concerns, delays Fed rate-cut expectationsWar-driven energy shock pushes Brent prices sharply higher and forces markets to reassess the Federal Reserve’s policy outlook  Brent crude traded below $100 a barrel Friday morning after closing at a multiyear high the previous session, but prices remain more than 35% higher since U.S.-Israeli attacks on Iran began. The surge has come despite efforts by the Trump administration to limit energy costs, including easing sanctions on Russian oil exports to increase global supply. Market anxiety remains elevated as Iran reportedly begins laying mines in the Strait of Hormuz — the critical chokepoint that carries roughly 20% of global oil exports. Iran’s new supreme leader, Mojtaba Khamenei, has pledged to keep the waterway effectively closed, raising fears of a prolonged supply disruption. The energy spike is rapidly feeding into inflation expectations and shifting the outlook for U.S. monetary policy. Goldman Sachs chief U.S. economist David Mericle told investors the higher oil price path makes it harder for the Federal Reserve to cut rates soon, with the bank now expecting the first rate reduction in September rather than June. Futures markets have also repriced sharply. Traders now assign only about a 41% probability of any rate cut in 2026 — and almost no chance before December — compared with expectations of two cuts earlier this year before the conflict escalated.—U.S., China officials set Paris talks ahead of Trump/Xi summitBessent, Greer to meet Vice Premier He Lifeng March 15–16 as Washington pushes for larger Chinese purchases of U.S. energy, soybeans, corn, sorghum and aircraft Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer will meet with Chinese Vice Premier He Lifeng in Paris on March 15–16 for a new round of economic and trade consultations, according to statements from the Treasury Department and the Office of the U.S. Trade Representative. The talks come as both governments work to stabilize economic relations ahead of a planned meeting between Donald Trump and Xi Jinping in Beijing scheduled for March 31–April 2. In announcing the trip, Bessent emphasized the role of high-level diplomacy between the two leaders in reopening the economic dialogue. “Thanks to the bonds of mutual respect between President Trump and President Xi, the trade and economic dialogue between the United States and China is moving forward,” Bessent said. He added that the administration intends to pursue outcomes that “put America’s farmers, workers, and businesses first.” Greer echoed the message, saying Washington and Beijing are continuing engagement aimed at creating “more balance in our bilateral trade relationship.” There are several delicate issues, including tariffs, fentanyl trafficking and Taiwan, that remain. Greer in an interview on CNBC said “Our trade deficit with China and goods has gone down by 30% over the past year. That’s a big change.” He added: “Our imports from China in January were the lowest they’ve been since 2004 and again, that’s not to say we’re not going to trade with China. We certainly are, but it’s getting to a much more balanced situation.” Focus on trade balance and strategic commodities. China’s Ministry of Commerce also confirmed the Paris meeting, with a spokesperson telling reporters the two sides would hold consultations on economic and trade issues of mutual concern. According to China’s state-run Xinhua News Agency, the announcement was made in response to media questions about preparations for the sixth round of U.S./China economic and trade talks. Sources indicate the discussions will center on several strategic trade priorities for the Trump administration:• Expanding Chinese purchases of U.S. energy, including LNG and crude oil • Reducing Chinese energy imports from Russia and Iran• Increasing Chinese purchases of U.S. agricultural commodities, including soybeans, corn, sorghum and other commodities, and getting U.S. beef plants certified• Potential new Chinese orders for Boeing aircraft Agricultural and geopolitical implications. For U.S. agriculture, the talks could signal a renewed push by Washington to secure larger Chinese buying commitments similar to those negotiated in earlier trade agreements regarding soybeans but this time including a larger list of U.S. farm products. China remains the largest export market for U.S. soybeans, and expanded purchases would come at a time when the farm sector is facing trade uncertainty and weaker export growth (see related item below). The negotiations also reflect a broader geopolitical strategy: using trade talks to encourage China to shift energy sourcing away from Russia and Iran while deepening economic ties with the United States. If progress is made in Paris, the discussions could lay the groundwork for more substantive agreements during the Trump–Xi summit in Beijing March 31-April 2.—Rubio expected to join Trump’s China trip despite Beijing sanctionsSCMP reports secretary of state — long a China hawk — is likely to attend the Trump-Xi summit in Beijing later this month U.S. Secretary of State Marco Rubio is expected to accompany Donald Trump on his planned visit to China from March 31 to April 2, according to an exclusive report from the South China Morning Post, despite Rubio still technically being under sanctions imposed by Beijing. Sources told the newspaper Rubio had previously shown little interest in visiting China after being invited, partly because trade negotiations — the main focus of the upcoming summit with Xi Jinping — are being led by Treasury Secretary Scott Bessent. Bessent is scheduled to meet Chinese Vice Premier He Lifeng in Paris this weekend for preparatory talks. Rubio became the first sitting U.S. secretary of state sanctioned by China after Beijing imposed penalties on him in 2020 when he was a senator, retaliating for U.S. sanctions tied to China’s policies in Xinjiang and Hong Kong. Such sanctions typically bar entry into China, though Beijing has not clarified whether they will be waived for the trip. The report notes Rubio’s attendance could help smooth diplomatic preparations for the summit, which has reportedly faced limited advance coordination. Despite his reputation as a hardline critic of Beijing, Rubio is expected to participate given the geopolitical significance of the Trump-Xi meeting and his current dual role as secretary of state and acting national security adviser.—U.S. patrol aircraft transits Taiwan Strait ahead of Trump/Xi summitPLA conducts limited maneuvers after U.S. signals commitment to “free and open Indo-Pacific”A U.S. Navy patrol aircraft transited the Taiwan Strait this week, prompting Chinese military monitoring and limited maneuvers near Taiwan as Washington and Beijing prepare for the planned summit between Donald Trump and Xi Jinping later this month.The Boeing P-8A Poseidon flew through international airspace over the strait on Wednesday, according to the United States Seventh Fleet, which said the mission underscored U.S. support for a “free and open Indo-Pacific” and the navigational rights of all nations.Taiwan’s defense ministry reported five sorties by aircraft from the People’s Liberation Army in the 24 hours following the transit, including three that crossed the unofficial median line of the Taiwan Strait and entered Taiwan’s air defense identification zone.Chinese state media said the PLA tracked and monitored the U.S. aircraft during its passage. Analysts in Beijing suggested the manoeuvres were likely a response to the patrol but not severe enough to jeopardize the upcoming Trump/Xi meeting scheduled for March 31 to April 2 in China.The flight marked the first publicly reported U.S. patrol transit of the strait in 2026, although such operations occur periodically as Washington seeks to reinforce freedom of navigation in the contested waterway separating mainland China and Taiwan.—U.S. ag trade deficit widens in January as imports climb and exports softenJanuary data showed ag imports rising and exports slipping, pushing the monthly trade gap wider and underscoring continued pressure on U.S. export performance even as the cumulative FY 2026 deficit remains below last year’s pace U.S. agricultural exports totaled $15.12 billion in January, down slightly from $15.26 billion in December. Imports rose to $16.88 billion from $16.39 billion. That widened the monthly agricultural trade deficit to $1.76 billion, compared to $1.13 billion in December. For FY 2026 through January, U.S. ag exports reached $61.04 billion and imports totaled $64.91 billion, producing a cumulative deficit of $3.87 billion. That remains smaller than the $11.39 billion deficit at the same point in FY 2025, when exports stood at $64.59 billion and imports were significantly higher at $75.96 billion. The year-to-date comparison still points to weakness in trade flows. U.S. ag exports are down 5.5% from the same period a year earlier, while imports have fallen 15.5%, suggesting export demand remains under pressure even as imports have also pulled back. —RFS final rule draws flurry of OMB meetingsTwenty stakeholder sessions are now scheduled or completed on EPA’s Set 2 Renewable Fuel Standard final rule, underscoring the intensity of lobbying as the administration still aims to finish the rule by the end of March. The White House review of EPA’s Renewable Fuel Standard Set 2 final rule is attracting a heavy stream of stakeholder engagement, with 20 meetings now scheduled or already completed at the Office of Management and Budget. Completed sessions have included the American Soybean Association, American Forest and Paper Association, Clean Fuels Alliance America, National Oilseed Processors Association, Fuels America, and Small Refineries of America. The lineup still ahead shows the breadth of interests trying to shape the final rule. A March 12 session with Growth Energy remains listed as scheduled, while meetings are also set for today with the Renewable Fuels Association and the American Fuel and Petrochemical Manufacturers. Additional sessions over the next two weeks include SIGMA and NATSO on March 16, consultant Anthony Reed and the Renewable Natural Gas Coalition on March 17, the American Petroleum Institute and Sustainable Advanced Biofuel Refiners Coalition on March 18, Phillips 66 on March 19, Opal Fuels and the Center for Biological Diversity on March 23, and the Advanced Biofuel Association on March 24. Even with the packed calendar, not every meeting currently on the docket is guaranteed to occur before OMB completes its review. Still, the current schedule suggests EPA remains on track to meet its stated goal of finalizing the rule by the end of March. Of note: Market chatter cents on a possible 2026 biomass-based diesel renewable volume obligation of 5.4 billion gallons. The bigger focus, though, was not just the headline number — it was how EPA might handle the reallocation of previously granted small refinery exemptions, which could materially raise the effective mandate borne by the rest of the market. Under the most widely circulated scenario, about 70% of prior exemptions would be reassigned to non-exempt refiners, pushing the effective 2026 obligation closer to 5.61 billion gallons. Some speculation went further, suggesting EPA could reallocate as much as 75%, which would raise compliance expectations even more. That possibility helped drive industry attention because even a modest change in reallocation policy can significantly affect obligated parties, Renewable Identification Number values, and demand expectations for biomass-based diesel feedstocks.—Treasury expands short-term waiver for Russian oil already at seaBessent says the temporary move is meant to ease supply strain and calm crude markets without materially boosting Kremlin revenue; may waive Jones Act. The Treasury Department has broadened a temporary sanctions allowance to let countries purchase Russian crude oil and petroleum products that were already loaded on vessels by March 12, giving buyers and shippers until 12:01 a.m. Eastern on April 11 to complete those transactions. Treasury’s Office of Foreign Assets Control published the move as Russia-related General License 134 on March 12, and Secretary Scott Bessent said the step was designed to increase the amount of oil available to the global market during the current supply disruption. The temporary action is in effect from 12:01 ET March 12 to 12:01 ET April 11. Bessent described the measure as narrow and temporary, arguing it applies only to oil already in transit and therefore should not deliver a major windfall to Moscow because Russia collects most of its energy revenue at extraction rather than at the point of sale. In practical terms, the action functions as a wind-down authorization for stranded cargoes rather than a broad reopening of Russian energy trade. The market backdrop is the recent jump in oil prices tied to Middle East supply fears. Reuters reported the waiver came as the administration sought to stabilize energy markets after crude rose sharply amid the Iran conflict and shipping disruptions, with the authorization expected to cover roughly 100 million barrels of Russian crude already on the water. The move also appears to extend beyond an earlier, narrower U.S. waiver reported for India. Reuters and other reports say Treasury had previously allowed India a temporary path to buy Russian cargoes already stuck at sea, while Thursday’s license widened that concept to countries more broadly. Of note: Bloomberg reported that the administration is also considering waiving the Jones Act that requires U.S. ships be used to transport goods between U.S. ports, a move that would allow foreign-flag vessels to move oil more easily, but would likely have a minimal impact on crude prices and could raise issues with U.S. shipbuilding and vessel operators and their allies. Bottom Line: Treasury is trying to prevent already-loaded Russian barrels from being trapped out of the market at a moment of acute energy stress, while keeping the relief time-limited and confined to cargoes loaded before March 12. —Lawmakers urge Trump administration to ensure farmers benefit from Clean Fuel Tax CreditLawmakers press Treasury, Energy, and USDA to recognize conservation practices and adopt flexible accounting rules in the 45Z clean fuel credit A group of Republican lawmakers sent a letter (link) to Treasury Secretary Scott Bessent, Energy Secretary Chris Wright, and USDA Secretary Brooke Rollins urging the Trump administration to ensure that farmers can fully benefit from the Section 45Z clean fuel production tax credit, which is intended to expand domestic biofuel markets and support rural economies. The lawmakers praised the administration’s recent progress toward finalizing rules for the credit but warned that the final guidance must clearly recognize on-farm conservation and regenerative practices that lower the carbon intensity of biofuel feedstocks. They said the success of the 45Z credit will depend on “clear, workable rules” that allow farmers and renewable fuel producers to participate meaningfully. The letter argues that earlier regulatory efforts during the previous administration created uncertainty in the farm economy by delaying guidance and using modeling approaches that effectively excluded farmers. Lawmakers pointed specifically to the GREET emissions model issued by the Department of Energy in 2025, which did not initially incorporate USDA’s farm-level carbon calculator — a move they say prevented farm conservation practices from being reflected in credit values. To address that issue, the lawmakers asked the administration to fully integrate a new feedstock carbon-intensity calculator into the GREET model so that practices such as no-till, cover crops, strip-till, manure application, and optimized fertilizer use can qualify for higher-value fuel credits. They also urged officials to move quickly, noting that planting season is approaching in many parts of the country and farmers need regulatory clarity to capture potential premiums tied to lower-carbon production. The letter further calls for the government to adopt a “book-and-claim” accounting system for the credit, which would allow farmers to earn value from lower-carbon grain even if it is not physically delivered to a specific biofuel plant. Lawmakers argued that alternative “mass balance” systems could disadvantage farmers located far from biofuel facilities or those using grain for livestock feed. In addition, the lawmakers asked regulators to create distinct emissions pathways for renewable natural gas derived from livestock manure, saying separate carbon-intensity values for dairy and swine manure would allow producers to convert waste into a new revenue stream. The letter was led by Sen. Joni Ernst (R-Iowa) and Rep. Mariannette Miller-Meeks (R-Iowa) and signed by more than 20 Republican lawmakers, including Sens. Roger Marshall (R-Kan.), Charles Grassley (R-Iowa), Pete Ricketts (R-Neb.), Deb Fischer (R-Neb.), Jon Husted (R-Ohio), Jerry Moran (R-Kan.), and Mike Rounds (R-S.D.), along with multiple House members from major agricultural states. It also copied President Donald Trump at the White House. Overall, the lawmakers said timely action on the rule will help ensure the credit strengthens demand for U.S.-grown feedstocks and homegrown biofuels, while delivering new income opportunities for farmers and rural communities. —USTR launches sweeping forced labor probes under Section 301Investigations target 60 major trading partners as Trump administration ramps up trade enforcement The Office of the U.S. Trade Representative (USTR) has launched Section 301 investigations into the trade policies of 60 of the United States’ largest trading partners to determine whether they are failing to adequately prevent the importation of goods produced with forced labor. Link to USTR release. The probes, initiated under the Trade Act of 1974, will examine whether the acts, policies, or practices of these economies — particularly the failure to impose and effectively enforce bans on imports made with forced labor — are “unreasonable or discriminatory” and burden or restrict U.S. commerce, according to USTR. USTR Jamieson Greer said the investigations are aimed at addressing what the administration views as an unfair cost advantage enjoyed by foreign producers that rely on forced labor. “Despite the international consensus against forced labor, governments have failed to impose and effectively enforce measures banning goods produced with forced labor from entering their markets,” Greer said in a statement. “For too long, American workers and firms have been forced to compete against foreign producers who may have an artificial cost advantage gained from the scourge of forced labor.” According to a draft Federal Register notice (link), the investigations will evaluate whether the absence of effective import bans allows goods produced with forced labor — including products denied entry into the U.S. market — to be reexported into other markets and compete directly with American exports. USTR warned that this dynamic can distort competition by allowing artificially low-cost goods into global markets, potentially pushing U.S. companies that avoid forced labor inputs out of those markets. The list of economies under review includes major trading partners such as Australia, Canada, China, the European Union, Japan, Mexico, South Korea, Switzerland, Taiwan, and Vietnam. Several of these countries have recently negotiated tariff agreements with the Trump administration aimed at capping so-called “reciprocal” tariffs originally imposed under the International Emergency Economic Powers Act. Those tariffs were struck down by the Supreme Court last month, prompting President Donald Trump to signal the administration would use other authorities — including Section 301 and Section 122 — to rebuild a similar tariff framework. Democratic lawmakers criticized the move Thursday, arguing the administration is using Section 301 investigations as a vehicle to recreate the tariff regime invalidated by the court. USTR said it will accept public comments on the investigations through April 15, with a hearing before the interagency Section 301 committee scheduled for April 28. Timeline: Greer indicated the goal is to complete the investigations before temporary tariffs imposed under Section 122 expire later this summer, with additional Section 301 probes expected in the coming months.— Tariff refund system still in development CBP tells trade court software is 40%–80% complete but provides no timeline for paymentsU.S. Customs and Border Protection (CBP) told the U.S. Court of International Trade (CIT) on Thursday that the system needed to issue tariff refunds is between 40% and 80% complete, but the agency did not provide a timeline for when repayments will begin.In a report to the court, CBP official Brandon Lord said the mass-processing component of the refund system is about 40% finished, while the review module— the most developed element — is roughly 80% complete. The agency plans to conduct additional performance testing in the coming weeks and expects most refunds will be issued during the first phase of the system’s rollout.CIT Judge Richard Eaton described CBP’s progress as “satisfactory” and ordered the agency to provide another status update byMarch 19.Current indications signal refunds will be issued only to the importers who originally paid the tariffs, even though many companies passed those costs along through supply chains to customers and consumers.While CBP says the repayment system is moving closer to completion, the agency emphasized that no official timeline has been set for when tariff refunds will actually begin to flow.— Cuba confirms talks with Trump officials on possible economic deal Díaz-Canel says discussions are in early stages as U.S. pressure and fuel shortages mountCuban President Miguel Díaz-Canel confirmed Friday that his gov’t has held talks with officials from President Donald Trump’s administration, signaling a possible economic deal between the two countries. Speaking on state television, Díaz-Canel said the discussions are in the “initial phases” and aimed at addressing bilateral differences through dialogue.The talks come as the Trump administration pressures Havana for reforms while enforcing a de facto blockade on oil shipments, contributing to severe fuel shortages and rolling blackouts across the island.Díaz-Canel also confirmed that 51 prisoners will be released in the coming days as part of a Vatican-brokered agreement, a move seen as a potential confidence-building step as negotiations continue.

FINANCIAL MARKETS

—Equities today: U.S. stocks rose on Friday, while oil prices pulled back as investors awaited further developments in the Iran war. The Dow  rose 301 points, 0.7%. The S&P 500  gained 0.5% along with the Nasdaq. The S&P 500 is tracking for losses on the week with a 0.5% decline. That puts it on pace to see its first three-week losing streak in about a year. The Dow is heading for a 1% slide, while the tech-heavy Nasdaq has risen 0.2% week to date. Markets continue to digest the rise in oil and as there were no material new attacks on oil infrastructure overnight. Rhetoric from both sides (U.S. and Iran) continue to downplay the chances for a cease-fire in the near term.

In Asia, Japan -1.2%. Hong Kong -1%. China -0.8%. India -1.9%.
 

In Europe, at midday, London -0.2%. Paris -0.5%. Frankfurt -0.3%.

—Equities yesterday: 

Equity Index	Closing Price  March 12	Point Difference  from March 11	% Difference  from March 11
Dow	46,677.85	-739.42	-1.56%
Nasdaq	22,311.98	-404.16	-1.78%
S&P 500	6,672.62	-103.18	-1.52%

—GDP growth slows as inflation signals remain mixed

Revised fourth-quarter data show weaker economic growth while core inflation remains elevated ahead of the Fed’s March meeting.

U.S. economic growth slowed sharply in the fourth quarter, with GDP revised down to 0.7% from the previously reported 1.4%, underscoring a cooling economic backdrop heading into 2026. Consumer spending — measured by Personal Consumption Expenditures (PCE) — rose at a 2.0% annualized pace, down from 2.4% previously, indicating moderating household demand.

Separate January Personal Income and Outlays data showed mixed inflation signals. The headline PCE Price Index increased 0.3% for the month, matching expectations and easing slightly from 0.4% in December. On an annual basis, the index rose 2.4%, down from 2.9% in December, largely reflecting declining energy prices.

However, core PCE — the Fed’s preferred underlying inflation gauge — remained firm. Core prices rose 0.4% in January, unchanged from December, while the annual core rate climbed to 2.7%, up from a downwardly revised 1.8% in December.

The data present a complicated picture for Federal Reserve policymakers. While headline inflation cooled modestly, core inflation remains above the Fed’s 2% target, reinforcing expectations that policymakers will maintain a cautious stance.

Importantly, the latest figures do not yet reflect potential inflationary pressures stemming from the Middle East conflict, which has driven energy price volatility and heightened global trade risks. Those impacts could become clearer in the February inflation report due April 9.

For now, markets broadly expect the March 17–18 Federal Open Market Committee (FOMC) meeting to result in no change to the Fed funds rate, as officials assess the evolving economic and geopolitical landscape.

—Rate-cut expectations push into 2027

Energy price surge tied to conflict shifts market outlook for Fed policy

Rising crude and energy prices linked to the ongoing Middle East conflict are pushing market expectations for the Federal Reserve’s first interest-rate cut further into the future. According to CME FedWatch data, traders now expect the first reduction in the federal funds rate to occur at the March 2027 Federal Open Market Committee meeting, rather than October 2026, which had been the consensus earlier this week.

Probabilities for the March 2027 meeting are now nearly split, with 39.8% odds of a rate cut versus 39.1% for holding rates steady. As recently as Thursday, markets still favored a steady-rate decision by more than six percentage points.

The shift reflects rising inflation expectations tied to higher energy prices, suggesting investors increasingly believe the Fed will need to keep rates elevated longer if the conflict-driven oil shock persists.

—Global equity funds see largest outflows since December amid oil shock fears

Investors shift toward safer assets as Middle East conflict drives oil above $100 and raises inflation concerns

Global equity funds recorded their largest weekly outflows since mid-December as energy market turmoil tied to the U.S.–Israel conflict with Iran heightened fears of inflation and slowing economic growth.

According to LSEG Lipper data cited by Reuters, investors withdrew $7.05 billion from global equity funds in the week ending March 11, the biggest weekly outflow since the week of Dec. 17, 2025. The selloff came as oil prices surged and shipping through the Strait of Hormuz nearly halted, pushing Brent crude above $100 per barrel and fueling concerns about a major supply disruption.

U.S. equity funds saw $7.77 billion in net outflows, following $21.91 billion in sales the prior week, while European equity funds lost $7.71 billion. In contrast, Asian equity funds attracted $6.15 billion in inflows, suggesting some investors view regional markets as undervalued.

Market volatility also climbed, with the CBOE Volatility Index (VIX) rising to 28.15, its highest level since November.

Sector flows showed investors reducing exposure to financial and healthcare funds, which lost $2.31 billion and $1.31 billion, respectively. Industrial sector funds, however, drew $1.31 billion in inflows.

Meanwhile, global bond fund inflows slowed to a 10-week low of $5.72 billion, with high-yield bonds seeing $3.17 billion in outflows, the largest since April 2025. Investors instead favored safer instruments, sending $6.93 billion into money market funds, marking the seventh consecutive week of inflows.

Emerging markets also faced pressure, with investors pulling $2.69 billion from equity funds after an 11-week buying streak, while bond funds lost $656 million.

Despite the risk-off shift, some analysts believe sentiment could rebound quickly if geopolitical tensions ease. 

AG MARKETS

—War-driven grain rally spurs U.S. farmer sales

Midwest growers unload stored corn and soybeans as prices climb on oil surge and fertilizer disruptions

U.S. farmers are rapidly selling corn, soybeans and wheat from storage as grain prices rally following the Iran war, taking advantage of higher prices after a prolonged period of weak markets.

Growers across the Midwest have been selling grain to ethanol plants and major traders such as ADM and Bunge, while some are also pre-selling portions of crops they have not yet planted, according to a Reuters report.

Soybean futures rose above $12 per bushel on the Chicago Board of Trade — the highest since May 2024 — while corn hit its strongest level since May 2025 and wheat reached a high not seen since June 2024.

The gains are being supported by surging oil prices, which boost demand for biofuel feedstocks, and disruptions to fertilizer shipments linked to the conflict. Reuters noted that farmers had been holding unusually large stocks — including 14% more corn in on-farm storage than a year earlier — allowing many to quickly sell into the rally.

While the price jump has helped some farmers lock in modest profits, analysts say the broader farm economy remains under pressure from high input costs and uncertain export demand.

—Impacts from China tightening soybean inspections on Brazil

Phytosanitary checks slow shipments, potentially opening a short-term window for U.S. exporters

China has tightened phytosanitary inspections on Brazilian soybean shipments after repeatedly finding issues such as pesticide- or fungicide-coated beans, live insects, and heat damage.

Brazil’s Agriculture Ministry stepped up inspections at Beijing’s request, forcing importers to confirm shipments meet China’s quality standards before departure to avoid cargoes being rejected on arrival. The added scrutiny comes during Brazil’s peak export season and could slow deliveries to China — the world’s largest soybean importer.

Analysts say the delays could temporarily tighten supplies in China and create a short-term opportunity for U.S. exporters, which resumed sales to China late last year after a trade agreement. However, the shift would likely be limited unless broader trade diplomacy improves.

Logistical pressures are also mounting. Longer inspection waits at Brazilian ports have increased demurrage costs, while freight rates for Panamax vessels from Santos to northern China climbed about 24% in March, according to Mysteel data.

Brazilian soybean offers for April shipment have already risen to about $1.22 per bushel over the May CBOT contract, up from $1.12 in late February. Brazil’s bean basis has crashed amid shipping delays to China.  The April basis is around 45 under, with May around 23 under. Meanwhile, China’s soybean imports fell 7.8% in the first two months of the year, partly due to slower Brazilian harvests and longer customs clearance times.

Despite the disruptions, analysts say the impact may be temporary because Brazil is unlikely to allow exports to China to be significantly interrupted during the height of the shipping season.

—Cotton AWP edges higher. The Adjusted World Price (AWP) for cotton is at 51.50 cents per pound, effective today (March 13), up from 51.44 cents per pound the prior week. The AWP results in an LDP of 0.50 cent per pound being available, down from 0.56 cent the prior week.

—Agriculture markets yesterday:

Commodity	Contract Month	Closing Price on  March 12	Difference from March 11
Corn	May	$4.62 1/2	+2 1/4¢
Soybeans	May	$12.27 1/4	+13 1/4¢
Soybean meal	May	$320.20	+$4.80
Soybean oil	May	67.42¢	+26 points
SRW wheat	May	$5.98 1/2	+3 3/4¢
HRW wheat	May	$6.13 1/2	Steady
Spring wheat	May	$6.34 1/2	-3 1/2¢
Cotton	May	65.14¢	-3 points
Live cattle	April	$231.25	+$1.10
Feeder cattle	March	$348.225	-$0.50
Lean hogs	April	$94.35	-$0.85

ENERGY MARKETS & POLICY

—Friday: Oil prices dip but remain set for weekly gains amid Hormuz disruptions

Supply concerns persist despite tanker movement and U.S. steps to ease markets

Oil prices eased Friday but remained on track for strong weekly gains as disruptions tied to the Middle East conflict continued to roil energy markets.

Brent crude fell 63 cents to $99.83 per barrel, while U.S. West Texas Intermediate (WTI) dropped $1.29 to $94.44, though the benchmarks were still set for weekly gains of about 8% and 4%, respectively.

The dip followed news that an India-flagged tanker exited the Strait of Hormuz, suggesting limited shipments are still moving. Analysts cautioned the move does not signal the waterway has reopened.

The U.S. Treasury also issued a 30-day authorization allowing purchases of Russian oil already stranded at sea, a step Treasury Secretary Scott Bessent said would help stabilize markets.

Meanwhile, the U.S. and International Energy Agency announced a coordinated release of 400 million barrels from strategic reserves, including 172 million barrels from the U.S. Strategic Petroleum Reserve, to offset supply disruptions.

Despite those efforts, risks remain high. Iran has vowed to keep the Strait closed and has reportedly deployed mines in the waterway, raising fears that supply disruptions could persist.

—Thursday: Oil surges near $100 as Hormuz closure deepens supply shock

Iran attacks regional energy infrastructure and tanker routes, pushing crude to highest levels since 2022

Oil prices surged Thursday to their highest levels in nearly four years as Iran escalated attacks on energy and shipping infrastructure across the Middle East and vowed to keep the Strait of Hormuz closed.

Brent crude settled at $100.46 per barrel, up $8.48 (9.2%). 

U.S. West Texas Intermediate (WTI) closed at $95.70, also rising $8.48 (9.7%).

Both benchmarks finished at their strongest levels since August 2022.

The rally followed a wave of disruptions across the region. Two fuel tankers in Iraqi waters were struck by explosive-laden boats, prompting Iraq to halt operations at its oil ports. Oman also pulled vessels away from its primary export terminal outside the Strait of Hormuz as a precaution.

The Strait of Hormuz — a critical chokepoint that normally carries about 20% of global oil supply — remains largely closed amid escalating security risks. U.S. officials said naval escorts for commercial tankers are not currently possible, though they could become feasible later this month.

The International Energy Agency (IEA) warned the conflict is producing the largest oil supply disruption in modern market history, estimating Middle East production has fallen by roughly 10 million barrels per day, nearly 10% of global demand. Regional refinery shutdowns have also idled about 2.35 million barrels per day of processing capacity.

Although the IEA has approved a record 400-million-barrel release from strategic reserves, analysts question whether the oil can reach markets quickly enough to offset ongoing supply losses.

Further escalation risks remain. Hezbollah launched its largest rocket barrage of the war, raising fears that additional regional actors could enter the conflict and widen disruptions to shipping across both the Persian Gulf and the Red Sea.

TRADE POLICY

—Republicans back USMCA renewal ahead of 2026 review

Sen. Todd Young says GOP lawmakers broadly support maintaining the trilateral trade pact with Canada and Mexico even as President Donald Trump raises questions about its future

Sen. Todd Young (R-Ind.) said Republican lawmakers are broadly united in support of renewing the U.S.-Mexico-Canada Agreement (USMCA), even if many have not publicly voiced their backing as the pact approaches its first six-year review in July.

Speaking at a panel hosted by the National Corn Growers Association and the National Foreign Trade Council, Young said private conversations with GOP colleagues indicate universal support for the agreement’s continuation. “As a matter of principle, my colleagues believe in the importance of this agreement, all of them, without exception,” Young said.

Young acknowledged that some Republicans are keeping their views quiet while working with the White House, noting lawmakers often prefer to resolve disagreements internally when their party controls the presidency. He said many Republicans want improvements to the agreement but ultimately intend to support its renewal.

The senator — a member of the Senate Finance Committee — emphasized that USMCA should remain a trilateral agreement among the U.S., Canada, and Mexico, arguing that the deeply integrated North American economy would be difficult to unwind. “We understand that this is a tripartite agreement and needs to stay trilateral,” Young said.

Young’s comments come as President Donald Trump has recently dismissed USMCA as “irrelevant” and floated the possibility of replacing it with separate bilateral trade deals. Young said he regularly reminds Trump that the agreement was negotiated during his first term and represented one of the administration’s key trade achievements.

The pact’s joint review scheduled for July could lead to negotiated changes if all three countries agree to continue the agreement.

Preparations for the review are already underway. U.S. Trade Representative Jamieson Greer has said Mexico has been “pragmatic” in early discussions, while negotiations with Canada have been more difficult. U.S. and Mexican officials are set to begin bilateral consultations on March 16 ahead of the formal review process.

Young also predicted the debate over USMCA will intensify as the U.S. approaches the 2026 midterm elections, when legislative activity often slows and trade issues receive greater attention.

Agriculture groups, including the National Corn Growers Association, continue to stress the importance of the agreement for farm exports. NCGA Vice President Matt Frostic said the U.S. appears to be “in a good spot” with Canada and Mexico but cautioned that trade politics in Washington can shift quickly. “Things get crazy around this town, so you always have to be vigilant and ready for whatever happens,” Frostic said.

LABOR & IMMIGRATION POLICY

—Rollins signals possible visa changes to address farm labor shortages

USDA secretary says administration exploring ways to expand worker access for aquaculture and other sectors facing limits under H-2B program

USDA Secretary Brooke Rollins said she will speak at the White House today about potential changes to farm worker visa programs as the Trump administration looks for ways to ease labor shortages affecting parts of the agricultural sector.

Rollins said the administration has already made adjustments to the H-2A visa program but that some industries — including aquaculture sectors such as crawfish, shrimp, and other seafood operations — are struggling because they rely on the H-2B visa program instead. “We’ve made a lot of changes in the H-2A … but some farmers, such as aquaculture — crawfish, shrimp — they’re really struggling,” Rollins said in an interview with a Louisiana television station. She noted that these operations often fall under H-2B because their labor needs are tied to processing or seasonal non-farm activities rather than traditional agricultural production.

Rollins said the administration is evaluating options to quickly expand worker access, including allowing producers to apply through alternative visa pathways that fall outside the statutory cap governing H-2B visas.

The administration cannot remove the annual H-2B cap without congressional approval, she said, but officials are exploring regulatory changes that could help producers access other programs not subject to the same limits.

Rollins added that she has discussed labor challenges for crawfish producers with Jeff Landry, the Republican governor of Louisiana, noting the industry’s economic and cultural importance in Louisiana. She also tied the issue to the administration’s broader “Make America Healthy Again” initiative.

Labor shortages remain a persistent challenge across U.S. agriculture, Rollins said, adding that President Donald Trump is aware of the pressures facing farmers and seafood producers dependent on seasonal workers.

—Labor Dept. awards $1.6 million to aid workers after Tyson plant closure

Grant will fund job training and employment services for 3,200 workers laid off when the Lexington, Nebraska beef processing facility shut down

The U.S. Department of Labor has awarded $1,671,239 to the Nebraska Department of Labor to support employment and training programs for workers affected by the January closure of the Tyson Foods beef processing plant in Lexington, Nebraska.

The plant shut down on Jan. 20, 2026, resulting in the loss of about 3,200 jobs — a major economic blow to the community of roughly 10,500 residents, where the layoffs affected nearly one-third of the population.

The funding comes through a National Dislocated Worker Grant administered by the Labor Department’s Employment and Training Administration. The grant will help provide job training, skills development, and employment assistance to displaced workers across Buffalo, Custer, Dawson, Frontier, Gosper, Lincoln, and Phelps counties.

Authorized under the Workforce Innovation and Opportunity Act, National Dislocated Worker Grants are designed to help states respond to large-scale layoffs or economic disruptions that overwhelm local workforce resources.

WEATHER

— NWS outlook: Intense clipper-like system bringing heavy snow across the Upper Midwest into the Upper Great Lakes early today along with widespread blustery conditions… …Active Atmospheric River pattern bringing heavy lower elevation/coastal rain and high elevation snow to the Pacific Northwest and northern Rockies… …A winter storm will gradually develop across the northern High Plains today into Saturday before expanding and intensifying across the northern Plains later on Saturday, reaching into the upper Midwest Sunday morning… …An anomalously early heatwave will begin to build over the western U.S. heading into the weekend… …Critical Risk of fire weather for the central/southern High Plains.