Trump's statements about negotiations with Iran have sent oil and grain prices crashing, but speculative swings will continue this week

Sell on rumors and buy on facts - this is the rule used by traders on exchanges, and President Trump generates enough information for speculative jumps.

Yesterday, September Brent crude futures fell 10.2% to $88/barrel (-15.9% in two sessions) amid the US halting its attacks on Iran and Trump's announcement of resuming talks with Iran. Such a sharp collapse in oil prices led to a significant decline in grain prices.

At the same time, the Iranian Foreign Ministry directly denied information that the country had appealed to the US to resume the negotiation process, so Iran will continue to defend its sovereignty by all available means. The most effective of these is the blocking of the Strait of Hormuz and the Bab el-Mandeb Strait in the Red Sea with the help of the Yemeni Houthis, which will block oil exports from the region and put pressure on Trump by increasing world oil prices.

Falling energy prices have put pressure on the biofuel sector (corn ethanol and soybean biodiesel), leading to a sell-off and a drop in agricultural futures. Traders also booked profits after a speculative rally last week on fears of a Russian grain export ban that failed to materialize and a halt to seaborne exports from Ukraine.

Yesterday, futures on the Chicago Board of Trade fell:

• for soft winter SRW wheat - by 2.1% to $242.5/t (September),
• for corn - by 2.9% to $186.6/t (December),
• for soybeans - by 3.4% to $446/t (November).

Already after the close of trading yesterday, a report on the state of crops in the US was released, according to which during July 20-26, the number of corn crops in good or excellent condition decreased by 4% to 63% (73% last year), soybeans - by 3% to 63% (70% last year), and spring wheat - remained at 53% (49% last year).

The dry weather forecast for this week in the Central and Northern Plains of the US will continue to worsen the condition of soybean and spring wheat crops, so we should not expect a further decline in grain quotes.

However, tensions in the Middle East remain high, as the US continues to blockade Iranian oil supplies from the Persian Gulf, and the passage of ships through the Strait of Hormuz is only possible via the Iranian route (for which the IRGC militants must be paid), so the number of ships leaving the Gulf has again decreased to 5-7 per day compared to 100-150 in peacetime.