Chicago wheat futures rose Monday on the back of higher oil prices following the collapse of U.S. Iran talks and concerns about a possible U.S. Blockade of Strait of Hormuz. This heightened concern over global fuel and fertiliser supplies.

Futures on corn and soybeans have also increased.

Fundamentals The Chicago Board of Trade's (CBOT) most active corn contract, Wv1, had gained 1.8% by 0042 GMT to $5.81 per bushel. CBOT corn Sv1 grew?0.5% at $11.82 per bushel. Soybeans are at their highest level since mid-March. Wheat and corn prices have been falling in recent weeks due to expectations of an abundance of supply. This was reinforced last week by U.S. Department of Agriculture’s monthly supply and demands report. On Monday, oil prices rose by?8% and reached above $100 per barrel as the U.S. Navy prepared to blockade the Strait of Hormuz. This could limit Iranian oil shipments. The marathon talks held over the weekend did not result in a ceasefire agreement, putting a fragile two week truce at risk. Fuel and fertiliser costs are high, raising the likelihood that farmers will plant less wheat. Wheat requires more fertiliser than other crops.

The USDA reported last month that U.S. Farmers 'were set to plant fewer acres of wheat this year than they have ever done since 1919, when the agency started keeping records. The U.S. Wheat Belt is also suffering from drought conditions. As of Sunday, the U.S. wheat crop had a 35% rating of good to excellent. This is a three-year-low for this time of year.

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The?failure in U.S.-Iran negotiations left a fragile truce hanging and no end in sight to a chokehold on Mideast energy imports. (Reporting and editing by Sumana Niandy; Reporting by Peter Hobson)

(source: Reuters)