Key insights
- European wheat futures dropped below €200, nearing a four-month low, due to news of a potential US-Iran deal. This news initially pressured crude oil and subsequently grain-based biofuel prices, creating bearish sentiment for grains. While US grain futures reversed gains, the broader impact on global agricultural markets and related sectors like biofuels suggests a slightly negative outlook for commodity-linked equities.
Investing.com -- European wheat futures traded in Paris fell below the €200 mark on Monday, reaching their lowest point in nearly four months before recovering slightly by the end of the trading session.
The September milling wheat contract on the Paris-based Euronext exchange closed the daytime session at 1630 GMT down 0.5% at €199.75 ($231.73) per metric ton. The contract earlier touched €198, its lowest level since February 28.
The decline followed news that the United States and Iran had reached an initial agreement to end their war. The deal is scheduled to be signed on Friday.
The announcement pushed crude oil prices lower, which raised concerns about potential price falls in grain-based biofuel prices. U.S. grain futures in Chicago initially fell following the news but later reversed course and rose.
The Euronext September contract has tested the €200 level multiple times over the past week. Expectations of strong harvests in the Black Sea region and western Europe have also contributed to weaker market sentiment.
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