SINGAPORE/PARIS: Chicago grain and soybean futures rose on Thursday, supported by a surge in crude oil prices as the war in the Middle East continued to disrupt supply, traders and analysts said.
However, ample global crop supply and strength in the dollar remained curbs on grain prices.
The most-active soybean contract on the Chicago Board of Trade (CBOT) was up 0.3 percent at USD11.73 a bushel by 1210 GMT.
CBOT wheat added 1.4 percent to reach USD5.76-1/4 a bushel and CBOT corn gained 0.6 percent at USD4.46-1/4 a bushel.
Chicago prices had edged down on Wednesday as investor hopes for a short conflict steadied oil prices and lifted stock markets.
But crude oil rose sharply on Thursday as the ongoing closure of the Strait of Hormuz continued to disrupt Middle East supply and led some refineries in other parts of the world to cut output.
Grain markets can react to movements in crude oil, partly because biofuel absorbs large amounts of crops as feedstocks.
“If crude continues to grind higher, it will likely provide spillover support to markets like wheat and bean oil,” Peak Trading Research said in a note.
A parallel rally in the dollar, which has attracted safe-haven demand from investors during the Iran conflict, was acting as a brake on US grains, it added. Jitters over the war had helped push grain and soybeans to multi-month highs at the start of the week.
But supply and demand fundamentals remained a cap on grain prices.
Brazil is harvesting what is widely expected to be a record soybean crop that could stall Chinese demand for US beans.
“The soybean market is very comfortable with supplies, but oil is the key driver here,” said one Singapore-based oilseed trader.
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