Grains-soybeans and corn fall more than 2% as oil drops, wheat also down

Oil prices tumbled more than 7% after the U.S. and Iran paused strikes over the weekend following two weeks of attacks, raising hopes of a diplomatic solution that would de-escalate the conflict and allow shipping to resume in the Strait of Hormuz.

Prices of agricultural products are often influenced by energy markets, with the rapidly growing use of farm goods in biofuel production.

"Given that tensions remain heightened, prices are likely to remain relatively well-supported," ING said in a note, referring to wheat.

Chicago soybeans and corn slid on Monday, weighed down by a sharp drop in crude oil prices on optimism that diplomatic efforts could de-escalate the conflict in the Middle East.

Wheat also dropped after hitting a two-year high on Friday on hopes that Russian-Ukrainian attacks on ports and shipping may recede.

Chicago Board of Trade most-active soybeans Sv1 fell 2.8% to $12.17-1/4 a bushel by 1006 GMT, corn Cv1 fell 2.9% to $4.73-1/4 a bushel, and wheat Wv1 fell 1.5% to $6.67-1/2 a bushel.

Attacks on grain infrastructure and ships by Russia and Ukraine continued to hamper the movement of cargoes, threatening supplies to importers in the Middle East, Africa and Asia.

Attention remained on reports Ukraine was discussing possible mechanisms to keep vessels moving through its major export ports, raising hopes that Black Sea exports may avoid a major disruption, despite a Ukrainian denial.

“Russian and Ukrainian drone attacks continue but they do not seem to be intensively attacking grain ports,” one European trader said. “The Ukrainians seem to be leaving the big Russian export port of Novorossiysk alone, which markets are relieved to see. The big grain terminals in Novorossiysk port would be very easy targets.”