By Kirk Maltais
--Wheat for May delivery fell 2.6% to $5.76 1/4 a bushel on the Chicago Board of Trade Monday, sliding as the investors flocked to safer assets like the U.S. dollar in the wake of fighting breaking out in Iran over the weekend.
--Soybeans for May delivery fell 0.8% to $11.61 3/4 a bushel.
--Corn for May delivery fell 0.7% to $4.45 1/4 a bushel.
HIGHLIGHTS
Absorbing the Headlines: The dollar turned stronger following weekend strikes on Iran, with President Trump today stating that "Operation Epic Fury' will last four to five weeks. "I'd characterize today's grain trade as 'absorbing headlines,'" said Brady Huck of EmpowerAg Trading. Huck said that short-covering in corn and wheat appears to have been halted with the military escalation, leaving the market open for more volatility as traders assess what the next move is. "Funds can send these markets either direction at this point," Huck said. "Expect volatility to crank up a bit going forward." A stronger dollar makes U.S. grain less attractive to buy on the world export market.
Big Picture Trade: Investors in wider markets appear keen to amass dollars in the wake of the conflict in Iran. "It could just be a situation where you're buying dollars because you need to spend it on crude or [on] all other commodities that are going up," Natxis' John Briggs said. "It could be just going into cash and if you have an exposed position, you're a hedge fund, you are just getting back to flat and re-evaluating things." With short-term yields relatively high, holding cash may be a good bet until geopolitical tension eases, Briggs said. Energy futures like crude oil posted big gains, while agricultural futures were mostly lower.
Thought Process: Much of the gains in soybean futures in recent weeks have come on hopes that China would respond to U.S. pressure to buy more of its soybean exports. The likelihood of China now coming back to buy millions more tons of soybeans is shrinking amid the fallout from the strikes on Iran. Unsurprisingly, China has condemned the Iran move and traders need to be wary of the headline risk if China puts out something saying the meeting in early April is in jeopardy," the Hightower Report said in a note.
INSIGHT
Dry Land: South American weather patterns are trending drier, ADM Investor Services said in a note. The net result is a mixed bag--with harvesting of Brazilian soybeans continuing without delay. But for corn and soybeans in Argentina, there are developmental issues due to a lack of precipitation. Later this week more fronts are expected to move through these growing areas along with cooler temperatures.
Environmentally Unsound: The House Ag Committee has started the process of "marking up" a proposed new Farm Bill, and provisions that roll back regulations on pesticides and Forest Service lands have environmental groups up in arms. "The Republican Farm Bill is a shameless giveaway to Big Chem and Big Ag that will only worsen industrial farming's dependence on the chemicals poisoning our food and water," the Center for Biological Diversity's Brett Hartl said. In a letter addressed to the committee, 118 organizations joined together to protest sections of the proposed bill that apply to both pesticide usage among farmers and development on federal lands. A new Farm Bill in 2026 is seen as supportive for U.S. farmers that would benefit from updated rules.
Strength in Soy: Export inspections for U.S. soybeans are stronger in the past week than they were at this time last year, the USDA said. For the week ended Feb. 26, soybean export inspections totaled 1.14 million metric tons, up from 681,545 tons in the week prior, and 702,160 tons at this time last year. But soybean inspections remain behind last year's pace for the full marketing year. The USDA said that inspections for the oilseed total 26.18 million tons this year. That's a 30% decline from the amount recorded at this time last year, the USDA said.
AHEAD
--The EIA will release its Weekly Petroleum Status Update report at 10:30 a.m. ET Wednesday.
--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.
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Paulo Trevisani contributed to this article.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
03-02-26 1556ET
