By Kirk Maltais


--Wheat for July delivery fell 2.8% to $6.09 3/4 a bushel on the Chicago Board of Trade on Wednesday, leading the complex lower on reports that President Trump is willing to end the U.S. military campaign against Iran.

--Corn for July delivery fell 1% to $4.63 3/4 a bushel.

--Soybeans for July delivery fell 0.3% to $11.83 a bushel.


HIGHLIGHTS


Feeling the Flow: Reports that President Trump could end the U.S.-Iran within weeks made the risk premium on grains and energy flow back into shiny metals and equities, said Karl Setzer of Consus Ag Consulting. "Gold and equities are the benefactors," he said. Data from the Commodity Futures Trading Commission published last week showed large net long positions for fund traders in corn and soybeans through March 24, with many of these positions added during the course of the war in Iran.

Watching the Weather: Forecasts turned wetter in winter-wheat regions in the Plains, which sent CBOT wheat futures lower throughout the day. "We are perched on the edge of our seats looking for rainfall for the western plains," said Charlie Sernatinger of Marex in a note. "This morning's model runs were decidedly wetter than we had yesterday."


INSIGHT


Missing Some Context: Yesterday's acreage report from the USDA wasn't a game changer for supply and demand heading into spring planting season. But the report may not have absorbed the full brunt of the disruption in fertilizer supply stemming from the war in Iran, said Rich Nelson of Allendale. "This was a survey of producers taken in the first two weeks of March," explained Nelson. "It is highly likely that the bulk of their responses came in the first week of March, before the more serious fertilizer concern showed." The USDA projected larger-than-expected corn acreage at 95.3 million acres, with soybeans at a smaller-than-anticipated 84.7 million acres.

Reverting to the Mean: Even if Wednesday night's address to the nation from President Trump signals a U.S. de-escalation in Iran, a quick recovery in markets isn't necessarily in the cards, said Thomas Mathews of Capital Economics in a note. "For a start, energy prices would probably remain high," said Mathews. Major central banks are also seen as less likely to cut rates this year, with the ECB potentially hiking rates.

Strategic Cuts: Farmers looking to mitigate the effect of high nitrogen prices should look to apply less of the fertilizer to their corn crop this spring, according to professors at the agricultural department of the University of Illinois. In a note, they write that a 20%-25% increase in anhydrous ammonia prices and 40% increase in urea prices in the wake of the war in Iran have made it so farmers may need to more closely stick to what's called the "maximum return to nitrogen" rate recommendations. "This is particularly true for situations where spring nitrogen needs were not priced prior to the price increases," they write.


AHEAD


-The USDA will release its weekly export sales report at 8:30 a.m. ET Thursday.

-The CFTC will release its weekly Commitment of Traders report at 3:30 p.m. ET Friday.

-The USDA will release its weekly Grain Export Inspections report at 11 a.m. ET Monday.

-The USDA will release its first weekly Crop Progress report at 4 p.m. ET Monday.


Write to Kirk Maltais at kirk.maltais@wsj.com

(END) Dow Jones Newswires

04-01-26 1550ET