The prices of wheat, soybeans and corn futures rose on the Chicago Mercantile Exchange on Thursday, with growing concerns about the impact of the Iran war on energy and fertilizer supplies, as Reuters reported.
Brent crude prices jumped above $119 per barrel after Iran launched attacks on energy facilities across the Middle East, following the Israeli strike on the South Pars gas field.
Soybean and corn prices can be affected by oil prices due to their widespread use in biofuel production, while grains in general have seen investor demand in light of the conflict.
The Iran war cut off supplies of vital nitrogen fertilizers from the Gulf to the world’s farmers, which supported the cultivation of grains and oilseeds.
More than 30% of global nitrogen fertilizer exports pass through the Strait of Hormuz, which is effectively closed, as well as fertilizer components such as sulfur.
Trying to secure fertilizer supplies
China, one of the world’s largest fertilizer exporters, is tightening its grip on its fertilizer exports to protect its domestic market, adding additional pressure to global markets already suffering from war-related shortages.
Randy Bliss, an analyst at the Hightower Report, said that several countries are trying to secure fertilizer supplies, as attacks on gas fields in the Middle East have cut off supplies of natural gas, which is also needed for fertilizer production.
The price of the most widely traded soybean contract on the Chicago Stock Exchange rose 5.25 cents to $11.67 per bushel (1 bushel = 14.5 kg).
The price of corn rose 5.5 cents to reach $4.68 per bushel, while the price of wheat rose 2.25 cents to reach $6.06 per bushel.
