Agriculture markets are in geopolitical focus this week ahead of Thursday’s meeting between President Donald Trump and Chinese leader Xi Jinping, with the president addressing the United Nations on Tuesday.
Trump made the argument for U.S. involvement in Iran, while the ongoing conflict in Iran and the Black Sea are being closely watched by the markets.
The markets are monitoring the U.S.-China Summit, plus President Trump’s meetings with Ukraine President Zelensky and Iranian officials, hoping for an end to both conflicts. Just the prospects for peace in Trump’s speech at the U.N. General Assembly weighed on energy, wheat, and corn markets on Tuesday.
The 81st UN General Assembly agenda highlighted war and rising inflation pressures. The market was keyed into President Trump’s speech as he justified the Iran war and said he’s at a crossroad between peace or greater punishment.
“Do I drive them into hell with no chance of survival and no hope of future greatness or generations?” Trump says. “But I believe we’ll make a deal right after the election because it doesn’t make sense for them not to. They’re waiting to see how I do in the midterm election. What they don’t realize is that I’m not running.”
“The United States and Iran will definitely get it done. We will get it done one way or the other. It’s going to be done. It’s got to be done fast,” Trump adds.
The president said unity on Iran would eventually bring down energy prices and provided further assurances to calm the markets.
“The United States Navy has recently escorted more than 1 billion barrels of oil out of the Strait of Hormuz and more oil is flowing than at any point since the start of the war,” Trump says. “We’re taking 22, 25, 30, 32 and 37 ships out respectively every single day, every single night.”
Trump Assures Ukrainian President of Support
Trump’s speech also provided assurances to Ukrainian President Zelenskyy amid this weekend’s Russian elections, which provided new support for Putin’s war, but offered no specifics.
“We’re working very closely with the leaders of Russia and Ukraine and we will get that one done. It’s going to happen, I think, more quickly than people understand,” Trump says.
“Last week, in honor of Senator Lindsey Graham, I signed a powerful new law passed by Congress providing me with enormous new tariff authorities, and if necessary, I will have to use them,” Trump says.
The grain markets, which are headline-driven, take out geopolitical premium on any news of intervention in Iran or the Black Sea.
Prospect of Peace Impacts Markets
“I just think the prospects for peace in the Black Sea and peace between the U.S. and Iran are really weighing on wheat and you can also look at crude oil — you look at correlations, it’s really kind of strange — wheat and crude oil tend to be correlated really well and that’s showing up,” Lane Akre, economist at Pro Farmer says.
However, market analysts are doubtful of any resolution to the five-year Black Sea war, which has damaged grain infrastructure in Russia and Ukraine, severely limiting exports.
“We continue to seek an end to the disastrous war between Russia and Ukraine, which is killing, as I said, thousands and thousands of people every month,” Trump says. “If we refuse to shrink from our duties to our people, then together through bold action, we will make this world far safer and a far better place. We will leave our nations far stronger. We will grow our economies far bigger. And we will not just speak of peace, prosperity, and justice here at the United Nations. We will stand for them all over the world.”
