Drought in Russia: Grain region particularly affected
In Russia, the main region for grain cultivation has been experiencing dry conditions for weeks. This is likely to result in lower yields and poorer quality than previously expected.
The conflict between Israel and Iran in the Middle East also affects agricultural markets. While grain prices have remained relatively stable, rising oil prices are giving a boost to the rapeseed market. Here is an overview. The Middle East conflict casts a shadow over agriculture and agricultural markets. The various markets have responded differently to the escalation between Israel and Iran since June 13, 2025. The impact on the grain market has been minimal so far, as Israel and Iran are not major agricultural players. Matif wheat has increased by 4 €/dt from Friday, June 13, when Israel began attacking Iran, until Tuesday, June 17. "I see a sideways trend in the grain market with little upward momentum at the moment," says market expert Jan Peters to top agrar. Oilseed markets are feeling the price surge in oil. The rapeseed market has benefitted directly from the intense conflict between Iran and Israel. The involvement of US President Donald Trump in the conflict has led to a dangerous situation. "This leads to uncertainty and rising crude oil prices, and thus to increasing plant oil prices," says Peters. The rapeseed market is trading at over 490 € on the Matif, higher than in previous weeks. Could a new oil crisis arise from a blockade of Hormuz? The further spread of the conflict in the Middle East indeed has consequences for the international fuel and energy market. Iran ranks third among OPEC countries and is one of the "Big Players" in global oil production. A disruption here could have a significant impact on quantities and drive oil prices up on the markets. Market experts see the threat of the Iranian leadership to block the Strait of Hormuz as even more serious. An estimated 20 to 30% of global oil transactions are processed through the strait in the Persian Gulf, as well as large quantities of natural gas. If this were to be obstructed, oil prices and consequently diesel and gasoline prices could skyrocket, especially as there are no alternative transport routes. Memories of the oil crises of the 1970s come to mind. The reaction of the already recession-stricken German economy to this shock is currently hard to predict. Fertilizer prices are more responsive to Russia than the Middle East conflict. Fertilizer prices have recently become more affordable, but rising oil prices due to the Middle East conflict could drive prices back up. Currently, the effects of new EU tariffs against Russia are more unsettling than the Israel-Iran conflict on the market. "Fertilizer prices are rising due to regulations regarding Russian fertilizer imports," says market analyst Peters. He advises buying fertilizer for the upcoming season now. The G7 supports Israel in the Middle East conflict. Politically, Israel has so far had international support for its actions against Iran. The G7's position is clear: Israel has the right to self-defense, while Iran does not have the right to nuclear weapons. The group of seven western democracies thus approves of Israel's actions. During the G7 summit, German Chancellor Friedrich Merz expressed strong support for Israel's attack on Iran. He praised Israel for its actions against the Mullah regime in Tehran. "This is the dirty work that Israel is doing for all of us," said the Chancellor. EU Commission President Ursula von der Leyen and Council President António Costa also supported the G7's position. However, EU member states remain deeply divided on the issue of Israel. After a two-hour conference call, EU foreign ministers only agreed to "bring EU citizens [who are in Iran] back home." Background of the Israel-Iran conflict: Israel began large-scale attacks on Iran on June 13, 2025. These attacks, carried out under the codename "Operation Rising Lion," targeted Iranian nuclear facilities, military installations, and senior Iranian military leaders. Iran responded with its own attacks on Israel on the same day. The Israeli military continued its attacks on targets in Iran on June 18. Meanwhile, Iran has also launched counterattacks.