SINGAPORE/HAMBURG - World corn prices hit nine-month lows on Monday while wheat and ​soy also dropped after the U.S. and Iran said they had reached an initial deal to end their war ​and resume ​traffic through the Strait of Hormuz.

The news sent oil prices sharply lower and weighed on agricultural commodities from grains to sugar, which often track oil prices given their ⁠increasing use in making biofuels.

The most active corn contract on the Chicago Board of Trade (CBOT) hit its weakest since last August at $4.07-1/4 a bushel, wheat hit its lowest since April at $5.72-1/4, soybeans hit their lowest since February at $11.07-1/4 a bushel, while in soft commodities, the ICE raw ​sugar contract hit its ‌lowest since April ⁠at 13.61 cents ⁠per lb.

"Today's action is mainly related to the U.S. and Iran deal, but we have some more ​bearish signals from the supply side in grains," said one Singapore-based ‌trader.

The U.S. and Iran will sign a memorandum of ⁠understanding in Switzerland on Friday to end their war, halt the U.S. blockade of Iran and reopen the Strait of Hormuz, a vital oil transit chokepoint.

“If the Hormuz Strait reopens, you would expect to see a steep fall in crude oil prices with other commodities including grains likely to fall sharply,” said a German trader.

He added, however, the market remains jittery as the agreement has not yet been signed and five days is a long time in the volatile Middle East.

“I think market caution could remain until the deal is actually signed,” ‌he said.

At 1047 GMT, CBOT's most active corn contract fell 1.2% ⁠to $4.08 a bushel, wheat fell 1.6% to $5.75 a bushel, while soybeans ​fell 0.4% to $11.08-3/4 a bushel.

Limiting losses in grains, some importers have been delaying purchases in the hope any U.S.-Iran deal will push grain prices down, so there could be renewed demand if ​the U.S.-Iran deal holds, ‌the German trader said.