GRAINS-Soybeans rally for second day, grains turn higher, as crude oil firms
By P.J. Huffstutter
CHICAGO, March 11 (Reuters) - Chicago Board of Trade soybean futures rallied for a second straight session on Wednesday, as crude oil recovered from a day-earlier plunge while investors wrestled with disruption caused by the U.S.-Israeli war with Iran.
Higher crude prices can support soybeans as soyoil is widely used to produce biodiesel fuel.
Corn and wheat also turned higher, firming after a two-session slump, as traders appeared to have shrugged off Tuesday's U.S. Department of Agriculture forecast that the world will have more corn on hand than previously expected.
Instead, said traders, corn futures gained support in part from investors anticipating that U.S. farmers will plant fewer corn acres this spring, as fertilizer and fuel prices are spiking in the wake of the closing of the Strait of Hormuz.
Part of the reason is because some farmers, who entered the spring planting season tight on cash, had not purchased all their fertilizer needs prior to the war, said Chuck Shelby, president of Risk Management Commodities, who also operates a farm in Indiana.
"Being a farmer myself, I know there is some corn acreage shifting to other crops going on," Shelby said.
While the USDA did not adjust any of its estimates in the government's monthly supply and demand report based on the Middle East conflict, "I think there's an impact happening out there, whether USDA sees it right now or not," Shelby said.
The most-active soybean contract on the Chicago Board of Trade (CBOT) Sv1 was up 2.12% at $12.27-1/4 a bushel, as of 1627 GMT (11:27 a.m. CST). Soyoil BOcv1 added 4.19% to 68.37 cents per pound.
Crude tumbled on Tuesday as investors reacted to U.S. President Donald Trump's prediction the Iran war could end soon. But concerns about significant fallout for energy and shipping remained and helped prices turn higher on Wednesday. O/R
Corn, like soyoil, is used in biofuel production. Meanwhile, wheat futures can also be sensitive to crude fluctuations because of geopolitical risks and commodity investment flows, traders said.
CBOT corn Cv1 was up 2.1% at $4.61-3/4 a bushel, while CBOT wheat Wv1 was 1.35% higher at $5.99 a bushel.
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