Soja reacts negatively to the agreement between Iran and the USA

The soybean market is the first among commodities to price the end of the conflict in the Middle East.

On Sunday President Donald Trump announced that an understanding had been reached and that the naval blockade in the Strait of Hormuz would be ended. Iran confirmed that the text of the memorandum has been finalized and that military operations on all fronts will be ended immediately and permanently. The Strait of Hormuz should be released next Friday, the 19th, subject to the signing of the agreement between the two countries.

The announcement immediately had an impact on oil prices. On the morning of this Monday (15), the barrel of Brent type showed a drop of almost 5%, trading at US$ 83. And the barrel of WTI was trading at US$ 80, with a drop of 5.30%.

SOYBEAN
Following this movement, the soybean oil contract, on the Chicago Stock Exchange, opened trading with a sharp drop. It lost 2% and recovered a little throughout the morning, but still with a negative bias.

The negative movement in soybeans was more contained, with a drop of 0.43% to US$ 11.08 a bushel.

Among the soy complex products, only bran operated positively this morning, with a 0.43% increase for the July contract.

CORN
The corn contract also fell this Monday on the Chicago Stock Exchange. July contract opened down 1.15%.

According to Cepea (Center for Applied Economic Studies) the negative movement is due to the start of the safrinha corn harvest in some regions of Brazil, the estimate of greater supply in the coming weeks in addition to the USDA forecast that points to greater global production. The market has remained out of purchases waiting for further drops in prices.

Source: CNN