Chicago Grains Choppy After Trump Delays Strikes on Iran Power Plants

PARIS/BEIJING, March 23 (Reuters) - Chicago grain and soybean futures flitted between positive and negative territory on Monday as U.S. President Donald Trump's announcement of a delay to possible strikes against Iranian power plants roiled financial markets.

Trump's comments, which also referred to productive talks with Iran, sent oil prices tumbling as investors saw a sign of de-escalation in the three-week U.S.-Israeli war with Iran that has disrupted global energy supply. O/R

Grain and oilseed prices, which have broadly tracked fluctuations in crude oil during the conflict, initially turned lower to give up overnight gains. However, Iranian denials of talks with Washington curbed the slide in crude and led grain prices to pare losses.

"It's a real mess," a European grain broker said of Monday's trading.

The most-active soybean contract on the Chicago Board of Trade (CBOT) Sv1 was down 0.1% at $11.60-1/2 a bushel by 1233 GMT. CBOT wheat Wv1 was down 1.0% at $5.89-1/4, and corn Cv1 eased 0.5% to $4.63-1/4 a bushel.

Grains are sensitive to crude oil because of the widespread use of corn and soyoil in biofuels and, more particularly, as investors have seen the crops as an inflation hedge during the Iran crisis.

Trump on Saturday threatened to "obliterate" Iran's power plants if Tehran did not fully reopen the Strait of Hormuz within 48 hours, prompting an Iranian threat to target certain energy and water facilities in the Middle East in retaliation.

Those threats pushed oil and grain prices higher earlier on Monday prior to Trump's latest comments.

While oil's retreat weighed on grains, a parallel drop in the dollar index =USD lent some support by making U.S. crops cheaper overseas.

Uncertainty over harvest prospects also helped underpin prices.

Wheat's earlier rise was supported by concerns regarding drought in the U.S. Plains, said Claire Adams, agricultural analyst at Bendigo Bank Agribusiness.

Traders are also grappling with how rising fuel and fertiliser prices may influence U.S. farmers' allocation of acres for corn and soybeans this spring.