What is the right course of action?

Your choices 1 and 2 are correct.

You are coming from a side road with a yield sign. That means you must give way to all traffic on the road you are entering, regardless of whether it comes from the left or the right and regardless of who is going straight or turning.

So the blue truck has priority because it is already on the priority road you want to enter, and you must let it pass first.

The tractor is also on the priority road. Even though it is turning into your road, it still has priority over you because you have the yield sign. A common rule of thumb in Germany is: “Yield sign beats right-before-left.” Only after all vehicles on the priority road have gone may you proceed.