By Kirk Maltais


--Wheat for July delivery fell 2.8% to $5.91 a bushel on the Chicago Board of Trade on Wednesday, with the risk premium in grains stepping back after a temporary cease-fire was reached in the conflict with Iran.

--Corn for July delivery fell 0.5% to $4.57 3/4 a bushel.

--Soybeans for July delivery rose 0.2% to $11.77 1/4 a bushel.


HIGHLIGHTS


Making Moves: Fund traders are continuing to liquidate long positions in grain futures, extending this week's trend, after President Trump said he agreed to a cease-fire with Iran if the Strait of Hormuz reopened immediately. The cease-fire pressured wheat futures as the market watched to see if Iran would allow more ships through the maritime chokepoint.

Damage Done: Investors welcomed the cease-fire with Iran, but significant issues with fertilizer availability are already hitting grains, said Jake Hanley of Teucrium Trading. "Reopen the Strait of Hormuz tomorrow, and the corn market still has a problem that doesn't resolve until 2027 at the earliest," said Hanley in a note. Gridlock at the Strait and damage to natural gas plants in the region won't be resolved overnight, and farmers will likely pay significantly higher prices to obtain fertilizer, or stretch whatever supply they have at the expense of strong crop yields.

Not Expecting Much: Thursday's WASDE report is not expected to sway markets, said AgResource in a note. "The USDA April crop report is offering support to CBOT grains, but [we doubt] that the USDA data will feed the bulls tomorrow," said the firm. Analysts surveyed by WSJ forecast that the USDA will reduce its outlook for U.S. soybean and wheat stockpiles, with corn stockpiles projected to rise 28 million bushels to 2.16 billion bushels.


INSIGHT


Hierarchy of Needs: Farmers can expect to feel higher prices in their crop budgets, said agricultural lender CoBank in a note. That's even with improved grain futures. "Improved commodity prices are not anticipated to offset higher input and production costs," said the firm. Instead, CoBank forecasts that "the sharp increase in diesel prices following the onset of the Iran war could add $2,000 in fuel costs per farmer and hundreds of thousands more for grain elevators."

Wide Range of Possibilities: If the climate shifts away from La Niña and into an El Niño system over the summer, as forecast by the NOAA, then a host of commodities are expected to feel the impact, said Jim Roemer of Best Weather. Heat and moisture in different regions of the world are directly linked to the success or failure of the incoming crop season. But it also may also be consequential for energy prices, said Roemer.

Looking Ahead: The sentiment of U.S. farmers improved in March, according to the Purdue University/CME Group Ag Economy Barometer, rising to 127 from 116 in February. Expectations for the year ahead continue to be cautiously optimistic, with 20% of respondents anticipating improved financial performance, compared with 18% expecting worse financial performance over the next 12 months. "While producers are feeling more optimistic about the future, there's still a noticeable gap between short-term challenges and long-term confidence," said Michael Langemeier, director of Purdue's Center for Commercial Agriculture.


AHEAD


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

-The USDA will release its monthly WASDE report at noon ET Thursday.

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


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

(END) Dow Jones Newswires

04-08-26 1536ET