CANBERRA: Chicago wheat, corn and soybean futures fell sharply on Wednesday as early results from the US presidential election put Donald Trump in the lead, raising prospects of new trade barriers and boosting the dollar.

Trump, the Republican candidate, was drawing more support than he did in his failed 2020 campaign, though the result remained unclear in most of the battleground states that will decide the winner.

Markets did not wait. US stock futures, Treasury yields and the dollar gained sharply and most commodities lost ground. Tariffs proposed by Trump could disrupt US agricultural trade, US farmers fear.

A stronger dollar makes US farm exports costlier for overseas buyers.

“A trade war with China is now more of a possibility,” said Ole Houe, director of advisory services at IKON Commodities in Sydney. But even if Trump wins, prices would quickly rebound, he said.

“The market will initially trade the trade but claw it all back within a week… There’s plenty of demand for wheat and feed grain in the world. Soybeans are fairly priced, but wheat and corn are too cheap.”

The most-active wheat contract on the Chicago Board of Trade had fallen 1.5% to $5.63-3/4 a bushel at 0459 GMT, with CBOT soybeans 1.9% lower at $9.83 a bushel and corn down 0.9% at $4.14-3/4 a bushel.

All three contracts have regained some ground since hitting four-year lows in recent months.

Wheat inches higher as US crop gets off to poor start

Bumper US corn and soybean harvests and improving conditions in US winter wheat areas have pressured prices but the harvests are now winding up and other key wheat regions, such as the Black Sea and Australia, are dry, analysts said.

Markets are also looking forward to a US interest rate decision on Thursday and crop forecasts from the US Department of Agriculture (USDA) on Friday.