DeLong Commentary

CBOT:

Market Headlines:

President Trump states that he wants to play a role in the appointment of Iran’s next leader:

During the initial strikes on Iran, Iran’s Supreme Leader Ayatollah Ali Khamenei was killed. When asked about the succession, President Trump said that many potential replacements are believed to be dead, leaving the former leader’s son, Mojtaba Khamenei, as a leading candidate. While acknowledging that outcome as likely, Trump said he strongly opposes it and would not accept a leader who continues Khamenei’s legacy. The president stated, “Khamenei’s son is unacceptable to me […] We want someone that will bring harmony and peace to Iran.”

In a phone interview, Trump added that he believes the United States must be involved in the appointment of Iran’s next leader. Similar to the situation to the US recognition of the interim president in Venezuela, Delcy Rodriguez, following the capture of Nicolas Maduro.

China-Iran talks focus on allowing safe oil and gas passage through the Strait of Hormuz:

As the conflict in Iran enters its sixth day, traffic through the Strait of Hormuz has nearly halted. Earlier this week, the Iranian government stated that vessels belonging to the United States, Israel, European countries, or their allies would not be allowed to pass through the strait. The statement did not mention China. China sources roughly 45% of its oil imports through the Strait of Hormuz and has expressed concern about Iran’s restrictions on maritime traffic.

Ship-tracking data also showed a vessel successfully passing through the strait after reportedly changing its signal identification to “China-owner.”

China released its five-year plan outlining the country’s economic priorities:

The plan emphasizes increasing self-reliance in strategic sectors such as artificial intelligence, robotics, and other advanced technologies. It includes an economic growth target of 4.5–5.0% for 2026, the lowest target since 1991, reflecting pressures from falling home prices, weak domestic consumption, and rising unemployment.

• China also set a target to reduce carbon intensity by 17%, slightly below the 18% goal outlined in the previous plan. Because the target focuses on emissions per unit of economic output, total emissions could still rise as economic growth expands.
• Beijing stated that it will “resolutely fight against” separatist forces supporting Taiwan independence.
• Officials also said China plans to increase its annual grain production target, relying on new technologies and higher yields, while regulating overcapacity in the hog industry.
• In addition, Chinese leaders pledged to build a “fertility-friendly society” by encouraging births through policies addressing education, employment, childcare, and healthcare.

USDA Export Sales:

(week ended 2.26.26)

US corn export sales totaled 79.62 million bushels, well above market expectations of 23.6–63.0 million bushels. Over the last four weeks, corn export sales have averaged 61.5 million bushels per week, compared to 47.1 million bushels per week during the same period last year. Total commitments now stand at 2.558 billion bushels, 31.1% above the 1.951 billion bushels committed at this time last year. Sales increased 195% from the previous week’s 26.99 million bushels. Increases were primarily for South Korea, Colombia, Mexico, and Spain.

US soybean export sales totaled 14.09 million bushels, near the bottom of market expectations of 11.0–36.7 million bushels, and marked the second lowest week of the marketing year so far. Total commitments now stand at 1.324 billion bushels, 18.5% below last year’s same-week total of 1.624 billion bushels. Sales declined 5.82% from the prior week’s 14.96 million bushels. Increases were primarily for China, the Netherlands, Egypt, Indonesia, and Mexico, while reductions for unknown destinations partially offset sales.

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