Futures for major U.S. grains moved lower on Monday as markets reacted to diplomatic developments between Washington and Tehran that suggested a de-escalation in the Gulf.
Chicago Board of Trade July soft red winter wheat last traded down 12-1/2 cents at $5.72 per bushel. Kansas City July hard red winter wheat fell 12-1/4 cents to $6.22-1/4 a bushel, and Minneapolis July spring wheat declined 8-1/4 cents to $6.10 per bushel.
Traders attributed part of the move to an announcement that U.S. President Donald Trump and Iran's deputy foreign minister had reached an initial agreement to end the war and resume maritime traffic through the Strait of Hormuz. Iran’s semi-official Mehr news agency reported that the draft deal calls for reopening the Strait within 30 days under Iranian arrangements, and that the United States and Iran will sign a memorandum of understanding in Switzerland on Friday.
The diplomatic news sent crude oil prices lower, and that drop in energy markets appeared to put additional pressure on agricultural commodities that have a growing role in biofuel production. July corn on the CBOT was last quoted down 6 cents at $4.06-3/4 per bushel.
Soybean futures also declined amid the weaker crude market. CBOT July soybeans were last down 10-3/4 cents to $11.02-3/4 per bushel. U.S. Midwest weather was cited as another factor for soybeans, with rainy conditions expected to help crop development.
Outside the United States, FranceAgriMer reported on Friday that French soft wheat crop ratings improved slightly, with 77% of the crop rated in good or excellent condition as of June 8, up from 76% a week earlier and from 70% a year ago.
Market participants also noted comments from the heads of Morocco's millers and grain traders federations. They said that Morocco's plan to reduce import dependency and to prioritize sales of domestically produced wheat faces obstacles because of poor protein quality and harvesting delays, despite the country having an ample crop.
Overall, the combination of a détente-driven drop in oil, weather supportive of U.S. soybean development, and mixed crop-quality signals abroad contributed to the downward price pressure across wheat, corn and soy futures on Monday.