Corn, wheat and soybean futures all fell Wednesday as optimism over a possible U.S.-Iran peace agreement triggered a sharp pullback in crude oil and eased concerns about fuel and fertilizer supply disruptions.
U.S. crude oil lost as much as 15% to $88/barrel, while international Brent crude oil fell as much as 11% to $96.
Corn futures were weaker as crude oil prices tumbled on hopes that a deal could lead to the gradual reopening of the Strait of Hormuz and the lifting of the U.S. blockade on Iranian ports. The war has disrupted a key route for fuel and fertilizer movement, raising input-cost concerns for nutrient-intensive crops such as corn. Profit-taking and fund position adjustments also added pressure. July corn lost 11 ½ cents to $4.68 ½, and December was down 10 ½ cents at $4.90.
Wheat was lower as prices came under pressure as traders reduced war-risk premium from the market following signs of progress in negotiations. However, dryness for the winter wheat crop in the U.S. southern Plains and expectations for a drop in U.S. spring wheat plantings limited the downside. July Chicago dropped 10 ½ cents to $6.17 ¼, and July Kansas City eased 3 cents to $6.87. July Hard Red Spring fell 5 ½ cents to $6.93 ½, and July Minneapolis lost 4 cents to $6.92.
Soybeans also retreated, led by weakness in soybean oil. Soyoil futures fell from their highest level in three-and-a-half years as crude oil slumped. July beans closed 16 ¾ cents lower at $11.94 ¾, and November tumbled 14 cents to $11.75 1/2.
