Wheat prices soar on US-Iran tensions; soybeans also gain
Wheat prices just hit their highest levels in months, in part because of rising tensions between the US and Iran. Fears of possible conflict have investors on edge, leading to more short-covering (basically, people rushing to buy back wheat contracts).
Soybeans are also getting a boost—almost reaching a 20-month high—thanks to hopes for more exports and bigger demand from biofuel producers.
Uncertainty is only growing with oil prices climbing and China telling its citizens to avoid travel to Iran.
Geopolitical risks push up food commodity prices
On the Chicago Board of Trade, wheat futures jumped 1.8% to $5.84-3/4 a bushel, while European wheat crossed the 200-euro mark and hit its highest since early November.
Analysts point straight to geopolitical risks for these moves—when global politics get shaky, food commodity prices usually feel it fast.
Meanwhile, soybeans edged up too (0.4% higher), fueled by talk that new US biofuel policies could mean even more demand ahead.
For now, traders are watching every headline closely as market uncertainty continues.