Corn hits nine-month low, wheat eases on US-Iran peace deal

SINGAPORE: Chicago corn slid on Monday to its lowest level in more than nine months while wheat dropped to a two-month low, after the US and Iran reached a preliminary agreement to end their war, sending oil prices sharply lower.

Favourable US crop weather and higher South American production forecasts added further pressure on agricultural commodities.

“Today’s action in markets is mainly related to the US and Iran deal, but we have some more bearish signals from the supply side in grains,” said one Singapore-based trader.

The most-active corn contract on the Chicago Board of Trade (CBOT) fell 0.8% to $4.09-1/2 a bushel by 0323 GMT.

It hit its weakest level since August 28 at $4.08 a bushel earlier in the day.

Wheat was down 0.8% at $5.80 a bushel, after hitting its lowest since mid-April, while soybeans rose 0.1% to $11.15 a bushel, after dropping to its lowest since February 10.

US and Iranian officials said they had agreed on a framework to end their war, halt the US blockade of Iran and reopen the Strait of Hormuz, a preliminary pact that sent oil prices falling but leaves the fate of Iran’s nuclear programme to further negotiations.

Agricultural goods often track crude oil prices, with the increasing use of grains and oilseeds in making biofuels.

In a widely followed monthly world report, the US Department of Agriculture (USDA) last week increased its forecasts for this season’s corn output in Argentina and Brazil, as well as soybean production in Argentina.

The USDA also raised its projection of global corn inventories at the end of 2026/27 to above a range of trade expectations.

The US soybean crush pace likely slowed for a third straight month in May as some processing plants were idled for seasonal maintenance and repairs despite historically large crush margins, according to analysts surveyed ahead of a National Oilseed Processors Association report due on Monday.

Large speculators switched to a net short position in CBOT corn futures in the week to June 9, regulatory data released on Friday showed.

The Commodity Futures Trading Commission’s weekly commitments of traders report also showed that noncommercial traders, a category that includes hedge funds, increased their net short position in CBOT wheat and cut their net long position in soybeans.