GRAINS-Chicago grains extend gains as Middle East war disrupts fuel, fertilizer markets
By Renee Hickman
CHICAGO, March 19 (Reuters) - Chicago soybean, corn and wheat futures extended gains on Thursday as attacks on oil and gas facilities in the Middle East heightened concerns about the war disrupting energy and fertilizer supplies, analysts said.
Brent oil prices LCOc1 jumped above $119 a barrel after Iran attacked energy facilities across the Middle East following Israel's strike on its South Pars gas field. O/R
Soybean and corn can track oil prices because both crops are widely used for biofuel feedstock, while grains as a whole have attracted investor demand amid the conflict.
The U.S.-Israeli attacks on Iran have cut off critical nitrogen fertilizer supplies from the Gulf to the world's farmers, supporting grains and oilseeds.
More than 30% of the world's nitrogen fertilizer exports, as well as fertilizer components like sulfur, pass through the Strait of Hormuz, which is now effectively closed.
China, among the world's largest fertilizer exporters, is clamping down on its fertilizer exports to protect its domestic market, putting an additional strain on global markets that were already grappling with shortages caused by the war.
Randy Place, an analyst at the Hightower Report, said several countries were trying to lock up fertilizer supplies, as attacks on gas fields in the Middle East have cut supplies of the natural gas also needed to produce fertilizer.
The most-active soybean contract on the Chicago Board of Trade (CBOT) Sv1 settled up 6-3/4 cents at $11.68-1/2 a bushel.
CBOT corn Cv1 climbed 6-1/2 cents to $4.69-3/4 a bushel, while wheat Wv1 gained 3-3/4 cents to $6.08.
Kansas City wheat futures, which jumped on Wednesday on worries about dry weather in the U.S. Southern Plains, ticked down as rains appeared in the forecast.
Commodity Weather Group said precipitation was expected in the next 11 to 15 days, but two-thirds of Plains hard red winter wheat would still be too dry by early April.
