Crude Prices Continue to Surge on Iran Conflict Developments
Analysis of EPA RFS announcements | Indonesia revives B50 biodiesel push amid energy security concerns | Trump FY 2027 budget set for April 3
| LINKS |
Link: Updates, March 29: Brent Oil Price Rises to $116 as
Iran Conflict Worsens
Link: The Week Ahead, March 29: Congress Out, But War with Iran
Main Focus
Link: Weekend Updates, March 28: One of Most Consequential Weeks for
Commodity Markets in 2026
Link: Trump Rolls Out Ag Relief at Historic White House Farm Gathering
Link: EPA Finalizes RFS Set 2 Rule with Higher Biodiesel Targets,
70% SRE Reallocation
Link: Video: Wiesemeyer’s Perspectives, March 29
Link: Audio: Wiesemeyer’s Perspectives, March 29
Topics discussed on podcast:
Markets: Friday closes and weekly change
Markets: USDA’s Prospective Plantings, Grain stocks reports
Markets: Cattle market a head scratcher
Issues:
1. White House ag announcements
2. RFS details from EPA
3. Perspective on emergency waivers for E15
4. Small actions on fertilizers — Venezuela, Belarus
5. Planting getting closer in heart of Corn Belt
6. USDA Food Price Outlook shows sticky food inflation
7. Oil prices – structural versus fear premium and when will that shift
(gas and diesel price update)
8. Trump/Xi summit rescheduled… for now, what it means for ag
9. Hogs & Pigs report perspective
| Updates: Policy/News/Markets, March 30, 2026 |
| UP FRONT |
TOP STORIES
— Trump claims Iran conceding to U.S. demands as ceasefire prospects remain unclear: Mixed signals persist as Tehran publicly rejects terms while regional intermediaries explore potential talks, underscoring uncertainty over whether meaningful negotiations are underway.
— Trump escalates pressure on Iran with infrastructure strike threats amid ongoing talks: The U.S. pairs claims of negotiation progress with explicit warnings of strikes on energy, water, and oil assets if Hormuz remains closed.
— Hormuz flashpoint intensifies as U.S. builds military options: Strait closures and troop deployments signal readiness for targeted operations to restore shipping flows, not a full-scale invasion.
— Strait of Hormuz disruptions amplify global commodity risks: farmdoc analysis by Gerald Mashange highlights cascading impacts on energy, fertilizer, and global trade from constrained shipping flows.
— EPA locks in aggressive biofuel mandate — but supply gaps emerge: NTG analysis by Zachary Davis warns record RFS volumes may outpace domestic production, shifting focus to RIN pricing to balance the market.
— 45Z tax credit reshapes biofuel mix toward domestic feedstocks: North American sourcing rules boost soybean oil demand, crush capacity expansion, and reduce reliance on imported biofuels.
— EPA biodiesel mandate increase hinges on RIN conversion details: Final RFS levels rise, but changing RIN assumptions and delayed import penalties cloud true supply requirements.
— Supreme Court to revisit birthright citizenship doctrine: Case could redefine 14th Amendment interpretation and reshape U.S. immigration policy if automatic citizenship is narrowed.
FINANCIAL MARKETS
— Equities modestly higher on Iran rhetoric, but risks remain elevated: Futures gain on ceasefire optimism, though ongoing military escalation caps upside and keeps volatility high.
— Weekly macroeconomic watch — inflation persistence dominates outlook: Sticky inflation, rising energy costs, and resilient growth keep the Fed in a higher-for-longer posture with two-sided risks ahead.
AG MARKETS
— Indonesia revives B50 biodiesel push amid energy security concerns: Move from B40 to B50 signals stronger palm oil demand as global energy disruptions reshape policy priorities.
ENERGY MARKETS & POLICY
— Oil surge fuels inflation fears as markets brace for prolonged Gulf conflict: Brent and WTI gains tied to Hormuz disruptions are driving global inflation risks and tightening financial conditions.
CONGRESS
— Trump FY 2027 budget set for April 3 amid delays: Late submission compresses the appropriations timeline and raises risks of stopgap funding measures.
FOOD POLICY & FOOD INDUSTRY
— SBA expands lending with “Grocery Guarantee” to ease food supply constraints: Higher federal loan guarantees aim to boost credit access across farms, logistics, and distribution to address grocery inflation.
WEATHER
— Severe storms and fire risks shape national outlook: Midwest to Northeast faces heavy rain and storms, while the West and Plains see elevated wildfire concerns.
— California snowpack collapses ahead of key April measurement: Warm winter shifts precipitation to rain, leaving reservoirs full short term but increasing long-term water and agricultural risks.
TOP STORIES—Trump claims Iran conceding to U.S. demands as ceasefire prospects remain unclearConflicting signals emerge as Tehran publicly rejects terms while regional intermediaries explore potential talks President Donald Trump said Iran has “given” the United States most of the 15 items outlined in a proposed peace framework to end the conflict, according to reporting from Bloomberg Government. Speaking aboard Air Force One, Trump suggested additional concessions may still be sought but declined to detail what Iran has accepted. Despite Trump’s remarks, Iran has publicly rejected the U.S. proposal, instead offering five counter conditions — including preserving sovereignty over the Strait of Hormuz — underscoring a wide gap between public positions and claimed behind-the-scenes progress. Regional diplomacy continues, with officials from Pakistan, Saudi Arabia, and Turkey convening to explore a path toward de-escalation. Ishaq Dar said both Washington and Tehran have expressed confidence in Pakistan as a potential host for future negotiations, though neither side has formally agreed to direct talks. The mixed messaging highlights ongoing uncertainty over whether substantive negotiations are underway or if both sides remain far apart despite claims of progress. —Trump escalates pressure on Iran with infrastructure strike threats amid ongoing talksU.S. signals progress in negotiations but warns of targeting energy, water, and oil assets if Hormuz remains closed President Donald Trump on Monday said the United States is making “serious progress” in negotiations with Iran to end the ongoing conflict, while simultaneously threatening sweeping strikes on the country’s critical infrastructure if talks collapse. In a post on Truth Social, Trump warned that failure to reach a deal — particularly if the Strait of Hormuz remains effectively closed — could trigger U.S. attacks on Iran’s electric generating plants, oil wells, and key export infrastructure, including Kharg Island. He added that desalination facilities, vital to Iran’s water supply, could also be targeted. Trump framed the ultimatum as a final step after what he described as “great progress” in negotiations, noting the U.S. has so far refrained from striking those assets. He has also extended a prior deadline for Iran to reopen the strait, citing continued diplomatic engagement. Speaking aboard Air Force One, Trump said Iran had agreed to many elements of a 15-point U.S. proposal, though he declined to detail specific concessions. The talks are reportedly being mediated through regional actors, including Pakistan and other Middle Eastern countries. However, Iranian officials again pushed back on the U.S. characterization of progress. Foreign Ministry spokesperson Esmail Baghaei called the ceasefire proposal “unrealistic” and emphasized that no direct negotiations with Washington have taken place. The military posture in the region continues to intensify alongside the diplomatic push. U.S. Central Command confirmed the deployment of 3,500 additional U.S. troops and the arrival of the amphibious assault ship USS Tripoli, underscoring preparations for potential escalation even as talks proceed. The dual-track approach — diplomacy backed by explicit threats to critical infrastructure — highlights the high-stakes effort to reopen global energy flows through Hormuz while avoiding a broader regional conflict. —Hormuz flashpoint intensifies as U.S. builds military optionsStrait remains largely closed to oil traffic while troop buildup signals limited-strike capability — not full-scale invasion — amid tentative tanker access talks The strategically vital Strait of Hormuz remains effectively closed to most oil tanker traffic, sustaining severe pressure on global energy markets as the conflict in the Middle East escalates. An additional 2,000 U.S. troops have arrived in the region (including an amphibious assault team) — adding to an estimated 50,000 already deployed — while Iran-backed Houthi rebels have formally entered the conflict, widening its geographic scope. President Donald Trump said negotiations with Tehran are progressing and indicated Iran may allow 20 oil tankers to transit the strait “out of respect,” a potential but limited easing of the supply bottleneck. Reports note the current U.S. troop posture provides flexibility for targeted military actions — such as securing shipping lanes or conducting precision strikes — but remains insufficient for a large-scale, sustained ground invasion. The immediate strategic priority centers on reopening the Strait of Hormuz, a chokepoint for roughly one-fifth of global oil flows, with speculation growing that U.S. forces could be positioned to ensure safe passage for commercial tankers rather than pursue broader combat operations.  —Strait of Hormuz disruptions amplify global commodity risksUniversity of Illinois farmdoc analysis by Gerald Mashange highlights how localized conflict is driving worldwide energy, fertilizer, and trade volatility A new farmdoc analysis (link) from by Gerald Mashange of the University of Illinois’ Department of Agricultural and Consumer Economics underscores how disruptions in the Strait of Hormuz are rapidly translating into global market instability, particularly across energy and fertilizer sectors. Immediate price impacts. Mashange argues that in today’s highly interconnected global economy, even localized military conflict — such as the ongoing U.S.-Israel confrontation with Iran — can trigger immediate price spikes as markets react to uncertainty in supply chains. The current conflict has already pushed energy and fertilizer prices higher, with further upside risk if shipping disruptions persist through the Strait of Hormuz. War-driven supply shocks mirror Ukraine precedent. Drawing parallels to Russia’s 2022 invasion of Ukraine, Mashange notes that commodity markets tend to react sharply even before physical shortages fully materialize. In that case, European dependence on Russian natural gas and crude oil led to dramatic price spikes — including Brent crude surpassing $100 per barrel — as fears of supply disruptions intensified. Over time, Europe reduced its reliance on Russian energy, but the transition required significant investments in alternative supply chains, infrastructure, and efficiency measures. The key takeaway: supply chain realignment is costly and slow, meaning elevated prices can persist well beyond the initial shock. Strait of Hormuz: A critical global chokepoint. Mashange emphasizes that the Strait of Hormuz represents an even more acute vulnerability due to its central role in global trade flows:• Roughly 25% of global seaborne oil trade — about 20 million barrels per day — passes through the Strait• Approximately one-third of global seaborne fertilizer trade depends on the route• Nearly 20% of global LNG trade, largely from Qatar and the UAE, transits the corridor• The majority of these shipments — particularly energy exports — are destined for Asia According to data cited in the report, vessel traffic has already collapsed amid the conflict, plunging from 129 daily transits in February 2026 to just 4 transits on March 7. Limited alternatives increase systemic risk. The analysis stresses that alternatives to the Strait are extremely limited, particularly in the short term. Damage to Gulf energy infrastructure further compounds the issue, delaying any potential recovery in flows. As a result, markets face a prolonged period of tight supply and elevated volatility. Mashange also warns of an “escalation trap,” where rising economic costs — including higher energy and food prices — may increase geopolitical pressure for further military action rather than de-escalation. Global implications uneven but significant. The report concludes that the economic fallout will be unevenly distributed:• Asia faces the greatest exposure due to its reliance on Hormuz-bound energy imports• Africa and developing economies are particularly vulnerable to rising fertilizer, transport, and food costs• Global agriculture could see sustained input cost pressures, especially if fertilizer flows remain constrained Ultimately, Mashange concludes that until there is a credible path to de-escalation and a restoration of shipping through the Strait, commodity markets are likely to remain volatile, with elevated prices becoming a defining feature of the current geopolitical landscape. —EPA locks in aggressive biofuel mandate — but market signals point to structural supply gapsNesvick Trading Group (NTG) analysis by Zachary Davis highlights record RVO increases, policy shifts favoring domestic feedstocks, and a looming reliance on imports that current economics may not support EPA’s finalized Renewable Fuel Standard (RFS) “Set 2” rule delivers a materially larger mandate than expected — but according to analysis from Nesvick Trading Group’s Zachary Davis (NTG Morning Comments), the bigger story is whether the market can actually meet it. The rule sets total renewable fuel obligations at 25.82 billion RINs for 2026 and 25.98 billion for 2027, roughly 8% above the June proposal. The analysis notes that biomass-based diesel (BBD) volumes come in at 8.86 billion and 8.95 billion RINs, respectively — implying more than a 60% increase in biodiesel and renewable diesel production versus 2025 levels under the prior “Set 1” framework. That marks the largest percentage expansion in biofuel blending requirements since 2010 and delivers long-awaited policy clarity for the sector. Companies such as Archer Daniels Midland had previously indicated that final RVO levels would be a key determinant of their 2026 outlook. Structural policy shifts favor domestic feedstocks. NTG emphasizes that the structural changes embedded in the rule may prove more consequential than the headline volumes. • Beginning in 2028, foreign fuels and feedstocks will receive only half-value RIN credit, effectively incentivizing domestic inputs such as soybean oil while disadvantaging imports like used cooking oil (UCO).•EPA also removed renewable electricity from the RFS program entirely, eliminating the pathway for EV charging stations to generate RINs and narrowing the program back to liquid and gaseous fuels. These shifts tighten the linkage between U.S. agriculture — particularly soybean oil — and compliance markets, reinforcing domestic demand signals. Mandate may outpace available supply. Despite the aggressive targets, NTG flags a core disconnect: the mandate appears structurally dependent on imports that are currently absent. Bloomberg Intelligence modeling suggests the 2026 BBD market will require roughly 1.2 billion RINs — equivalent to about 775 million gallons — of imported biodiesel, even if domestic production runs at full capacity. However, imports collapsed to just 140 million gallons in 2025 following the expiration of the $1-per-gallon Blenders’ Tax Credit. The looming 2028 penalty on foreign feedstocks further undermines incentives to rebuild import flows from key suppliers such as Singapore. RIN pricing becomes the critical adjustment mechanism. According to NTG, the burden now shifts to the RIN market to reconcile two gaps:• Domestic production economics: producers need roughly $1.25 per gallon to justify output, while current margins are closer to $0.70.•Import incentive: D4 RIN prices must rise sufficiently to attract foreign supply back into the market. Without that adjustment, the mandated volumes risk remaining theoretical rather than realized. Market verdict shifts to RINs. The conclusion from NTG is clear — the mandate is ambitious, but execution hinges on price signals. Where D4 RINs trade in the coming months will determine whether the record obligations translate into actual production gains or remain unmet due to insufficient economic incentives. In that sense, the RFS “Set 2” rule sets the framework — but the market will decide whether it can be delivered. Note: The coming 1/2 RIN value in 2028 provides an incentive to import as much fuel during 2027 as possible to capture the full RIN value and probably for imported feedstocks for a part of the year to be turned into renewable fuel. Also, EPA says the requirements guarantee that “at least 5.33 and 5.75 billion gallons of BBD will be used in 2026 and 2027, respectively. — 45Z tax credit reshapes biofuel mix, reinforces domestic feedstocks in EPA’s Final RFS levelsNorth American sourcing rules tilt incentives toward soybean oil and canola, boost crush capacity outlook, and support higher ethanol blend growth The amended 45Z Clean Fuel Production Credit under the One Big Beautiful Bill Act of 2025 is emerging as a central driver behind the EPA Renewable Fuel Standard Set 2, with the Environmental Protection Agency acknowledging it lacked sufficient data to fully incorporate the credit’s market impacts into its initial proposal. However, observed declines in 2025 imports of non-cellulosic advanced biofuels reinforced EPA’s decision to base final volume assumptions primarily on domestic production capacity. At the core of the shift is a structural incentive favoring North American feedstocks. The revised 45Z credit excludes fats, oils, and greases (FOG) sourced outside North America and removes indirect land-use penalties, significantly improving the economics for biofuels derived from U.S. soybean oil and Canadian canola. EPA now expects these vegetable oil-based fuels to receive higher tax credits than imported FOG-based fuels — a reversal from prior policy — leading to reduced reliance on imports and a stronger domestic supply chain. Soybean oil demand and crush expansion accelerate. EPA’s analysis points to a sharp increase in domestic soybean processing capacity, with publicly announced projects suggesting U.S. crush capacity could reach roughly 615,000 bushels per day by 2026. EPA They cited this document from ASA. The agency noted that increased domestic crushing — rather than expanded acreage — could drive higher vegetable oil output, supporting biofuel production growth without materially altering planting decisions. This reinforces expectations for sustained demand strength in soybean oil markets tied to renewable diesel and biodiesel expansion. Note: One source says: “Check the crush capacity number. There is debate, but 615K is at least 10x too low. USDA at 2.575 BB = 7.05 MB/day. I think ASA is saying the expansion represents 615k/day? In Feb., NOPA crushed 208.8 million bu. Divided by 28 = 7.457 million bu.” We’ll see ifEPA changes it from the pre-pub to what appears in the Federal Register. Imports decline as domestic feedstocks gain share. While EPA still anticipates some level of biodiesel and renewable diesel imports, the structure of the 45Z credit is expected to continue disadvantaging foreign feedstocks. The agency projects lower volumes of imported FOG in 2026–2027, with a corresponding shift toward U.S. and Canadian-sourced inputs, aligning RFS compliance with domestic agricultural production.Ethanol demand tied to fuel mix and pricing dynamics. For corn-based ethanol, EPA maintains that gasoline demand remains the primary driver, with most fuel continuing at E10 blends. However, the agency incorporated expected growth in higher blends — particularly E15 and E85 — supported by lower pump prices and consumer adoption of cheaper fuel options. EPA projects total ethanol consumption at approximately 14.4 billion gallons in 2026, including:• 137.4 billion gallons of E10-equivalent consumption• 998 million gallons of E15• 443 million gallons of E85• 2.06 billion gallons of E0 Despite this growth, EPA emphasized that U.S. ethanol production capacity still exceeds domestic consumption, leaving exports and blend expansion as key balancing mechanisms. Bottom Line: The 45Z credit is effectively reorienting the biofuel market toward North American feedstocks, strengthening soybean oil demand, accelerating crush capacity investment, and reinforcing EPA’s reliance on domestic production assumptions in its final RFS Set 2 volumes.—EPA biodiesel mandate increase hinges on RIN conversion detailsFinal RFS volumes rise above 2025 levels, but shifting RIN assumptions and delayed import penalties cloud true comparison with proposed targets EPA’s finalized Renewable Fuel Standard (RFS) requirements increase biomass-based biodiesel (BBD) volumes for 2026 and 2027, but the ultimate impact hinges on how Renewable Identification Number (RIN) conversion rates are applied — a key detail that remains fluid and could materially alter whether final mandates exceed earlier proposals. In its June 2025 proposal, EPA assumed roughly 1.6 RINs per gallon of BBD, translating to targets of 7.12 billion RINs in 2026 and 7.50 billion in 2027, which, when combined with reallocated small refinery exemptions (SREs), pushed totals to 9.07 billion and 9.20 billion RINs, respectively. However, updated agency guidance suggests lower conversion factors — about 1.64 RINs per gallon in 2026 and 1.57 in 2027 — implying that, on a comparable basis, final volumes may fall short of those proposed benchmarks, even as they remain well above 2025 levels. Complicating comparisons further, EPA’s proposal also modeled a scenario with reduced RIN values for imported biofuels — around 1.27–1.28 RINs per gallon — though those figures were explicitly illustrative. The agency has since delayed implementation of the 50% RIN penalty on imported fuels and feedstocks until 2028, giving the market time to adjust and potentially opening the door to further delays. The final rule also sets a 70% reallocation of waived blending obligations tied to prior SREs — near the upper end of expectations — reinforcing compliance demand across obligated parties. Taken together, the evolving RIN framework and alignment with the 45Z Clean Fuel Production Credit — which favors North American feedstocks — signal a structural shift toward greater reliance on domestic biofuel inputs, supporting soybean oil and other U.S.-produced feedstocks. Meanwhile, the rule underscores the limited current impact of E15 in the national fuel mix. Industry stakeholders continue to point to year-round E15 authorization as a critical next step, particularly as U.S. fuel demand shows signs of softening.—Supreme Court to revisit birthright citizenship doctrineCase could reshape 14th Amendment interpretation as Trump administration challenges automatic citizenship for all U.S.-born children The U.S. Supreme Court is set to hear arguments Wednesday in a closely watched case that could redefine the scope of birthright citizenship under the 14th Amendment — a pillar of U.S. immigration and constitutional law for more than a century. At issue: whether children born on U.S. soil should continue to automatically receive citizenship regardless of their parents’ immigration status — a principle rooted in the amendment’s Citizenship Clause, which grants citizenship to “all persons born or naturalized in the United States, and subject to the jurisdiction thereof.” The challenge, backed by the Trump administration, seeks to narrow that interpretation, arguing that the clause was never intended to extend universally to children of individuals in the country unlawfully. A ruling in favor of that view could significantly alter longstanding federal policy and trigger sweeping changes across immigration enforcement, federal benefits eligibility, and demographic trends. The Court’s eventual decision — expected in the coming months — carries major legal and political implications. A shift away from automatic birthright citizenship would likely prompt immediate litigation over implementation and raise complex questions about retroactivity, documentation, and the status of millions of U.S.-born residents. Public opinion on the issue remains deeply divided. Polling suggests broad support for granting citizenship to children born to U.S. citizens or legal immigrants, but far less consensus when it comes to children born to parents residing in the country illegally. That divide underscores the broader national debate over immigration policy, border enforcement, and constitutional interpretation — issues that are expected to intensify as the Court deliberates. |
| FINANCIAL MARKETS |
—Equities today: U.S. equity futures are modestly higher following more constructive rhetoric from President Trump on the Iran conflict. In an interview with the Financial Times, Trump said Iran has agreed to “most of” a 15-point ceasefire framework, lending support to early market gains. However, developments on the ground remain volatile. Over the weekend, Iran-backed Houthi forces launched attacks on Israel, while an Iranian missile struck a Saudi air base, damaging military aircraft. The disconnect between diplomatic rhetoric and escalating military activity is limiting upside in futures. Looking ahead, markets will remain focused on U.S./Iran developments, with sustained gains likely dependent on tangible signs of de-escalation. Separately, Federal Reserve Chair Jerome Powell is scheduled to speak this morning, a potential catalyst for additional market movement.
In Asia, Japan -2.8%. Hong Kong -0.8%. China +0.2%. India -2.2%.
In Europe, at midday, London +0.6%. Paris flat. Frankfurt -0.2%.
—Weekly Macroeconomic Watch
Inflation holding firm as energy and liquidity keep growth resilient
Macro Overview — Resilience vs. restriction
- Inflation is stabilizing above target, not falling
- Growth remains firm despite tight policy
- Financial conditions have eased at the margin
The Federal Reserve faces a balanced risk regime: persistent inflation alongside still-solid activity.
Inflation — Plateau, not progress
- Core inflation remains sticky (~3%)
- Services inflation continues to dominate
- Goods disinflation is fading
Drivers:
- Wage growth still elevated
- Housing disinflation slow to pass through
- Energy beginning to reaccelerate headline pressure
Disinflation has stalled, raising the bar for cuts.
Energy Markets — Renewed upside risk
- Crude prices remain elevated and volatile
- Geopolitical risks keep supply uncertainty high
- Shipping costs and insurance premiums are rising
Macro impact: Energy is reintroducing inflation pressure without collapsing demand.
Federal Reserve — Policy uncertainty rising
- Markets pricing fewer cuts, some hike risk
- Real rates drifting lower as inflation holds
- Financial conditions not as restrictive as intended
The Fed may need to stay higher for longer to maintain control.
Global Macro — Synchronized persistence
- Inflation remains broad across developed markets
- Growth continues to surprise to the upside
- Bond yields are grinding higher
The global economy is facing a coordinated inflation persistence problem, not isolated weakness.
Agriculture — Margin pressures building
Inputs:
- Fertilizer costs rising
- Fuel prices increasing
- Freight costs elevated
Outputs:
- Grain prices mixed to weaker but USDA Tuesday reports are key
- Demand uneven globally
Net effect: Farm margins are tightening from both sides.
Freight & Cost Transmission
- Bulk shipping rates trending higher
- Tanker rates elevated on energy flows
- Container costs volatile
Logistics is acting as a secondary inflation channel.
Key Market Signals
- Oil → gasoline pass-through
- Core services inflation trend
- Short-end real yields
- Fertilizer price spreads
- Freight indices
Outlook — Week Ahead
Bullish (disinflation resumes):
- Energy stabilizes
- Data softens
Bearish (inflation reaccelerates):
- Oil pushes higher
- Supply risks intensify
Base case:
- Inflation remains sticky
- Policy remains uncertain and reactive
Bottom Line
- Inflation is not falling fast enough
- Growth is stronger than expected
- Policy is no longer clearly easing
The macro environment remains unstable, with two-sided risks dominating policy and markets.
| AG MARKETS |
—Indonesia revives B50 biodiesel push amid energy security concerns
Prabowo signals shift from B40 to B50 as global oil disruptions reshape policy calculus
Indonesia will move forward this year with its B50 biodiesel program, President Prabowo Subianto said Monday, signaling a major acceleration in the country’s biofuel strategy after earlier delays.
Speaking during an official visit to Japan ahead of talks with Prime Minister Sanae Takaichi, Prabowo emphasized Indonesia’s aggressive push into biofuels, stating the country is “going in a big way” by increasing its palm oil-based diesel blend from 40% to 50%.
The announcement marks a reversal from January, when Indonesian authorities shelved the B50 rollout due to technical and funding constraints, opting instead to maintain the B40 mandate. However, worsening global energy dynamics — particularly supply disruptions tied to the U.S.-Israeli conflict with Iran — have prompted renewed urgency around domestic fuel production.
The B50 program would significantly increase demand for palm oil, reinforcing Indonesia’s position as a dominant global supplier while insulating the country from volatile fossil fuel markets.
| ENERGY MARKETS & POLICY |
—Oil surge fuels inflation fears as markets brace for prolonged Gulf conflict
Brent on pace for historic monthly gain as Strait of Hormuz disruption rattles global equities, commodities, and policy outlook
Oil markets are driving global sentiment, with Brent crude rising 2% Monday to about $114.85 per barrel and on track for a roughly 59% monthly surge — a move that would surpass gains seen after the Iraq’s invasion of Kuwait.
U.S. crude (WTI) climbed 1.5% to around $101, reinforcing the scale of the energy shock tied to the Gulf conflict.
The focal point for markets remains the Strait of Hormuz, a conduit for roughly one-fifth of global oil and LNG flows. Ongoing restrictions have triggered sharp price increases across oil, natural gas, fertilizers, aluminum, plastics, aviation fuel, and shipping — feeding broader inflation concerns across industrial and consumer sectors.
Commodity spillovers are accelerating, with aluminum hitting four-year highs following regional strikes, while rising input costs are expected to push up prices for food, pharmaceuticals, and petrochemicals globally — particularly impacting Asia.
Analysts warn of severe upside risk if disruptions persist. Some note a one-month closure of Hormuz could drive oil toward $150 per barrel and create supply constraints for industrial users, amplifying recession risks.
The inflation shock is already reshaping monetary policy expectations. Investors are repricing interest rate paths higher globally, with focus now on remarks from Jerome Powell and upcoming U.S. data on retail sales, manufacturing, and payrolls for confirmation of economic resilience.
Bond markets are under pressure as higher energy prices combine with rising defense spending and borrowing needs. The U.S. 10-year Treasury yield climbed to around 4.37%, reflecting tightening financial conditions.
Currency markets highlight relative positioning: the U.S. dollar remains near a 10-month high, supported by safe-haven flows and the U.S. role as a net energy exporter, while the yen weakened toward intervention-sensitive levels and the euro hovered near recent lows.
Despite heightened geopolitical risk, gold has shown only modest gains, suggesting investors are prioritizing liquidity and dollar exposure over traditional inflation hedges in the current environment.
| CONGRESS |
—Trump FY 2027 budget set for April 3 — delayed blueprint adds pressure to appropriations timeline
Nonbinding request arrives nearly nine weeks late, frustrating lawmakers racing toward September funding deadline
President Donald Trump is expected to send his fiscal 2027 budget request to Congress on April 3, laying out the administration’s policy priorities and spending proposals well past the statutory deadline of Feb. 2. The delay — now approaching nine weeks — has drawn bipartisan frustration from appropriators who depend on the president’s blueprint to begin drafting the 12 annual spending bills needed to fund the government.
While the president’s budget is nonbinding and routinely reshaped by Congress, it serves as a critical starting point for negotiations, signaling White House priorities on defense, domestic programs, and agency funding levels. Without it, lawmakers face a compressed timeline to complete appropriations work before the Sept. 30 fiscal year deadline — raising the risk of stopgap funding measures or a broader year-end omnibus package.
Top members of the House and Senate Appropriations Committees in both parties have warned that the late submission complicates hearings, agency testimony, and internal negotiations, particularly as Congress juggles other major legislative priorities. The delay also limits early visibility into administration proposals that could shape debates over discretionary spending caps, program cuts, or funding increases tied to national security and economic policy.
The April 3 rollout is expected to kick off a rapid series of budget hearings and negotiations, but the shortened window underscores the growing challenge of completing regular order appropriations in an increasingly crowded legislative calendar.
| FOOD POLICY & FOOD INDUSTRY |
—SBA expands lending backstop to food supply chain with “Grocery Guarantee”
Trump administration targets grocery inflation by boosting credit access for farms, distributors, and trucking firms
The Small Business Administration (SBA) is rolling out a new “Grocery Guarantee” program aimed at strengthening financing across the U.S. food supply chain, marking a targeted policy push to address persistent grocery price pressures.
Beginning May 1, eligible businesses — including farms, grocery wholesalers, and trucking companies — will be able to access SBA trade loans backed by a 90% federal guarantee, a significant increase from the standard 75% level. The higher guarantee is designed to reduce lender risk and unlock more capital for sectors critical to food production and distribution.
Administration officials say the policy is intended to expand domestic supply capacity, particularly in logistics and midstream food infrastructure, where financing constraints have limited throughput and contributed to cost pressures. By lowering the risk profile for lenders, the SBA is effectively incentivizing banks to extend credit deeper into the agricultural and food delivery ecosystem.
SBA head Kelly Loeffler framed the initiative as part of a broader inflation response strategy, emphasizing domestic production and supply chain resilience. In announcing the program, she said the policy would help “fuel domestic capacity” and improve the availability of “affordable, nutritious, homegrown food.”
Policy and market implications
•Credit expansion lever: The 90% guarantee materially shifts underwriting dynamics, likely increasing loan approvals for smaller or more capital-constrained operators in ag and food logistics.
•Supply chain focus: Unlike direct consumer subsidies, the program targets bottlenecks upstream — particularly transportation and wholesale distribution — where financing gaps can ripple into retail pricing.
•Inflation strategy: The move aligns with the Trump administration’s broader approach of addressing inflation through supply-side expansion rather than demand suppression.
•Ag sector support: Farms and agribusinesses may benefit from improved access to working capital, particularly ahead of planting cycles and amid elevated input and freight costs.
The program adds to a growing set of federal efforts aimed at reinforcing domestic food systems, with policymakers increasingly viewing credit access as a key constraint on scaling production and stabilizing prices.
| WEATHER |
— NWS outlook: A cold front will increase the chance of strong to severe thunderstorms and locally heavy rain from the Midwest to the Great Lakes to the interior Northeast… …Anomalously warm and dry conditions raise fire weather concerns across portions of the Intermountain West, Rockies, and into the High Plains… … A system moving through the West will bring Mountain snow, and the High Plains to New England could see wintry precipitation.
—California snowpack collapses ahead of key April measurement
Warm winter shifts precipitation to rain, leaving reservoirs full but long-term water risks rising
California is heading into its critical April 1 snowpack measurement with a growing imbalance — strong precipitation totals but dangerously low snow reserves. While winter storms delivered above-average moisture, much of it fell as rain rather than snow, undermining the state’s ability to store water for the dry season.
April 1 typically marks the peak of California’s snowpack — a key benchmark used by water managers to estimate spring and summer runoff. But this year, the peak came unusually early on February 21, according to David Rizzardo of the California Department of Water Resources, with levels steadily declining since.
Current conditions are deteriorating rapidly. Statewide snowpack stood at just 25% of normal last week, with especially severe deficits in the Northern Sierra Nevada at 8% of normal. The central region measured 28%, and the southern region 44%, signaling widespread weakness across the system.
The core issue is temperature. California just experienced one of its warmest winters on record — the second warmest in 131 years — with some regions hitting 90°F in March. According to climate experts, these elevated temperatures accelerated snowmelt and shifted precipitation patterns toward rain, preventing snow accumulation at higher elevations.
The implications are significant for water supply and agriculture. Snowpack serves as a natural reservoir, gradually releasing water into rivers and irrigation systems during the dry months. Without it, the state faces heightened risks of drought, tighter water allocations, and increased wildfire vulnerability.
While reservoirs have benefited from rainfall in the short term, the lack of snowpack removes a critical buffer for later in the year — a concern for California’s agricultural sector and broader water management outlook.
Even if late-season storms bring some snowfall, officials say it will be insufficient to materially improve conditions, leaving the state increasingly exposed heading into peak demand months.
