Grain and soy complex futures opened modestly lower Sunday night after the U.S. and Iran announced a deal to open the Strait of Hormuz, setting the stage for further talks aimed at ending a four-month old conflict.
“Following intensive talks, we are pleased to announce that the Peace Deal between the United States of America and Islamic Republic of Iran has been REACHED,” wrote Shehbaz Sharif, Pakistani prime minister and lead mediator in a post on X. “Both sides have declared the immediate and permanent termination of military operations on all fronts, including in Lebanon.”
The official signing ceremony will be on Friday in Switzerland, Sharif said.
In a social media post, Trump wrote: “Deal with the Islamic Republic of Iran is now complete. Congratulations to all! I hereby fully authorize the toll free opening of the Strait of Hormuz, and, simultaneously herewith, authorize the immediate removal of the United States Naval blockade. Ships of the World, start your engines. Let the oil flow!”
Iran’s Deputy Foreign Minister Kazem Gharibabadi said on state television that the text of the memorandum of understanding will be published following the official signing, Bloomberg noted.
July corn was down 3 ¼ cents to $4.09 ½ shortly after the market opened Sunday night. July soybeans were down 5 cents at $11.08. July soft red winter wheat declined 5 ¼ cents to $5.79 ¼, while July hard red winter wheat was off 4 ½ cents at $6.30.
Earlier, oil futures gapped lower. They remained down sharply, with August Brent crude, the global benchmark, $3.54 lower at $83.79 a barrel after ending Friday at a three-month low. July West Texas Intermediate crude, the U.S. benchmark, dropped $4.33 to $80.55 a barrel after ending last week at its lowest since mid-April. Brent had traded near a peak of $126 and WTI had neared $120 a barrel in the early days of the war in March, leading a surge higher across the commodity sector.
Fears of surging inflation and a ramp-up in demand for biofuels as diesel and gasoline prices soared lent support to rallies across the grain and oilseed markets amid a wave of heavy fund buying. Nearby corn futures hit a 12-month high in early May, while soybeans traded at a nearly two-year high in March. Soybean oil futures soared to a series of contract highs and wheat was also lifted on a combination of war premium and a drought-hit U.S. winter wheat crop.
But massive fund liquidation over the past two weeks saw July corn drop 35 cents and hit contract lows, while July soybeans plummeted 73 ¼ cents. Dropping oil prices, fund liquidation has left the focus on largely favorable early growing conditions across key corn and soybean growing areas.