Soybeans, corn decline as oil slumps on Middle East optimism
- The most-active soybean contract on the Chicago Board of Trade (CBOT) fell 0.9% to $12.41-3/4 a bushel
SINGAPORE: Chicago soybeans and corn slid on Monday, weighed down by a sharp drop in crude oil prices on optimism that diplomatic efforts could de-escalate the conflict in the Middle East.
Wheat was largely unchanged after climbing to a two-year high on Friday, with concerns over the Russia-Ukraine war and its impact on grain exports underpinning prices.
“Given that tensions remain heightened, prices are likely to remain relatively well-supported,” ING said in a note, referring to the move in wheat futures.
The most-active soybean contract on the Chicago Board of Trade (CBOT) fell 0.9% to $12.41-3/4 a bushel by 0337 GMT, and corn declined 1% to $4.82-1/2 a bushel.
Wheat added a quarter of a cent to $6.78-1/4 a bushel. Oil prices tumbled 5% after the US and Iran paused strikes over the weekend following two weeks of attacks, raising hopes of a diplomatic solution that would de-escalate the conflict and allow shipping to resume in the Strait of Hormuz.
Prices of agricultural products are often influenced by energy markets, with the rapidly growing use of farm goods in biofuel production.
Attacks on grain infrastructure and ships by Russia and Ukraine continued to hamper the movement of cargoes, threatening supplies to importers in the Middle East, Africa and Asia.
Geneva-based vegetable oil producer Allseeds said it was halting operations in Ukraine’s southern Odesa region, citing escalating Russian missile and drone attacks on port and logistics infrastructure.
However, Ukraine was discussing possible mechanisms to keep vessels moving through its Big Odesa ports, raising hopes that Black Sea exports may avoid a major disruption.
Under the proposal, shipowners would notify both Ukrainian and Russian authorities before vessels call at ports in either country, ExpertGrain media said.
In return, ships registered in participating flag states would not be targeted.
A second option would create temporary two- to three-day ceasefire windows for vessels to enter and leave ports.