Wheat Update - Iran War Impact
The narrative for financial markets, grains included, has changed dramatically with Saturday’s launch by Israel and the US of air strikes on Iran.
The primary impact has been on energy markets, given the importance of the Strait of Hormuz, which Iran has essentially closed, to shipping of both crude and liquefied natural gas. Brent crude soared 13.6% in early deals on Monday to $82.37/Bbl, its highest since January last year, before easing back to about $78/Bbl. Europe’s benchmark Dutch gas futures soared 19% for May-26.
However, for grains, the conflict holds substantial significance too although, as CRM Agri assessed at the weekend, outcomes will vary according to the extent of the conflict – crucially, determined by both duration and geography. Currently the situation is slipping into Scenario 2 which we outlined.
