BEIJING/HAMBURG: Global grains prices rose on Monday, with soy and wheat hitting almost two-year peaks as the US-Israel war on Iran sent crude oil soaring and halted Gulf shipping.
Grain markets can track movements in crude oil, partly due to investment flows from commodity funds and also because crops such as soybeans and corn are used for making biofuels. Chicago Board of Trade most-active soybeans were up 0.7percent to USD12.08-1/4 a bushel at 1347 GMT after hitting their highest since May 2024, partly driven by soyoil prices which hit their highest since December 2022. Wheat was down 0.6percent to USD6.13-1/4 a bushel after earlier hitting its highest since June 2024.
Corn was flat at USD4.60-1/2 a bushel after earlier hitting 10-month highs. “The war risk factor continues to support wheat, corn and soybean markets,” said Matt Ammermann, commodity risk manager at StoneX. He noted that while market fundamentals may be bearish, especially in soybeans and wheat, the impact of the war is overriding this.
Oil prices surged to their highest since mid-2022, with the Gulf’s Strait of Hormuz remaining virtually shut, meaning countries around the world are cut off from a fifth of global oil and liquefied natural gas supplies.
The Middle East conflict has offset strength in the dollar, which tends to curb grains prices as it makes dollar-based grains more expensive for export.
The war has also taken attention away from beneficial rain in some US winter wheat belts, which could help bolster already comfortable global supply.
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