Global grain prices fall on expectations of de-escalation in the Middle East

Grain prices in Chicago fell, leveling off earlier gains, amid optimism about a possible end to the war in the Middle East. This is reported by Bloomberg.

Oil prices – one of the key drivers of the grain and oilseed market in recent times – have also fallen in recent days. Brent futures fell below $ 100 a barrel on Wednesday after President Donald Trump said that the United States could withdraw from the conflict with Iran within weeks, although hostilities continue.

Wheat fell as much as 2.4% – this is the biggest drop in more than a week. Corn and soybeans also fell.

“The market is developing a narrative of de-escalation,” said Matt Ammerman, commodity risk manager at StoneX, in his commentary.

At the same time, the Bloomberg Grains Spot Subindex recorded its third consecutive monthly increase in March, rising 2.6%. The war and the virtual closure of the Strait of Hormuz have cut off supplies of fertilizer and fuel from the Middle East, raising costs for farmers around the world. Higher oil prices have also spurred demand for alternatives to fossil fuels.

The grain market is also reacting to the USDA’s report on the outlook for acreage. Total U.S. wheat, corn and soybean plantings were about 1 million acres lower than expected, said Arlan Suderman, chief commodities economist at StoneX.

The decline in wheat acreage is in line with a global trend, he said. The data could add to the risks to global grain production.

Tags: corn, grain, prices, soybean, wheat