Risk off, markets down. But is it really that simple. Will input prices fall, will fertilizer all of a sudden become a non issue, will fuel fall back to pre war prices. Was all of this a dream… for Wall St maybe, a nightmare for the rest of the world…… time will be the judge.
The biggest issue will be convincing either one of these two, Iran or Israel, to stop killing each other. Some people give the cease fire hours, some days. Probably just long enough for the option traders to get set. There are already reports that Israel have breached the agreement and boats passing through the Straight of Hormuz have been stopped by Iran. This is a better outcome than Tehran being turned into glass, but markets are likely to remain very volatile.

Much of the rally in wheat over the last few weeks was driven by outside markets, oil mainly. As I write WTI crude oil futures for May are down US$18.54/b, to US$94.41/b, Brent is down US$14.52/b to US$94.75/b. Will this result in an immediate fall in local fuel prices here…………. LOL….. yeah sure it will.
The impact on wheat futures and cash prices in the US was fast and hard. SRWW futures at Chicago selling off by 17.75c/bu. If you take the move higher in the AUD into account this converts to a day to day decline of about AUD$12.52/t.
Cash wheat values out of the US Pacific Northwest were also lower, the day to day conversion comparison there, using Asia as the consumer point, shows a decline of roughly AUD$9.85/t for HRWW. Comparing HRWW and H2 wheat C&F Asian consumer indicates that US product is now something close to US$18 cheaper than Aussie product. One would think this should result in an increase in US business into the Asian market .

Summit Fertilizers in Western Australia have declared Force Majeure on Urea contracts. This will impact on WA growers ability to acquire urea for the current sowing program. This is a knock on decision coming from their supplier calling force majeure earlier. CSBP is believed to be that supplier, but not confirmed.