GRAINS-Soybeans hit 21-month high on rising crude oil, corn and wheat also higher
By Karl Plume
CHICAGO, March 12 (Reuters) - U.S. soybean futures climbed on Thursday to the highest point since mid-2024 on speculative and fund buying as crude oil prices surged following Iranian attacks that deepened fears of a protracted Middle East conflict.
Wheat and corn also rose, with the strength in crude again offsetting a backdrop of ample global grain supplies.
Crude oil was up about 9% on Thursday as Iran stepped up attacks on oil and transport facilities across the Middle East and as shipping through the vital Strait of Hormuz remained effectively blocked. O/R
Higher crude prices can support crop futures as part of commodity investment flows linked to geopolitical and economic factors, and as corn and soyoil are widely used to produce biofuel. The war has also driven up the cost of farm inputs like fertilizer and diesel, prompting concerns about reduced grain production.
"Input prices are soaring. Diesel costs certainly will be a key factor as well in these coming weeks. So we're still looking at some significant concerns regarding not just farm input prices. I believe we've got clear concerns regarding energy pricing, the biofuel links," said Rich Nelson, chief strategist for Allendale.
Futures also drew support from expectations that the U.S. government will soon release its final rules on biofuel blending requirements that would incentivize more demand for crops.
Investors are also watching for further indications about Chinese demand for U.S. soybeans ahead of a planned visit to China by U.S. President Donald Trump at the end of the month.
U.S. soybean export demand was seasonally slow as cheaper supplies of newly harvested beans are available from Brazil. Net U.S. soybean sales last week were in line with trade estimates, but season-to-date sales remain nearly 19% below a year ago.
Chicago Board of Trade May soybean futures SK26 were up 15 cents at $12.29 a bushel at 12:25 p.m. CDT (1725 GMT) after notching a life-of-contract high. May corn CK26 gained 4 cents to $4.64-1/4 a bushel, while CBOT May wheat WK26 rose 8 cents to $6.02-3/4 a bushel.
