Chicago crop futures plunge as risk-off mood sweeps markets

agricultural productivity
agricultural productivity

Fears over the coronavirus epidemic not only rattled U.S. stock markets, but also badly shook Chicago Board of Trade (CBOT) agricultural futures in the past week amid massive fund selling.

The most active corn contract for May delivery was down 12.5 cents, or 3.28 percent, to close at 3.6825 U.S. dollars per bushel, while May wheat was down 27 cents, or 4.89 percent, to settle at 5.25 dollars per bushel.

Only soybeans for May delivery managed to close the week ending Feb. 28 with a moderate 2.25-cent gain, or 0.25 percent, at 8.9275 dollars per bushel.

As the World Health Organization raised the risk of global coronavirus spread to “very high” level, commodity markets, including the CBOT, took a big hit amid growing concerns about the impacts on world trade, demand and logistic disruptions.

The U.S. Department of Agriculture on Thursday released its latest export sales report, showing a bearish picture in general for the period of February 14-20.

Net U.S. corn sales were reported at 864,600 metric tons for 2019/20 marketing year, down 31 percent from the previous week and 26 percent from the prior four-week average.

Meanwhile, net wheat sales were pegged at 381,800 metric tons for 2019/20, up 10 percent from the previous week, but down 23 percent from the prior four-week average.

U.S. net soybeans sales stood at 339,300 metric tons for 2019/20, down 31 percent from the previous week and 38 percent from the prior four-week average.

Amid sluggish export sales and downbeat trade outlook, CBOT corn and wheat futures posted losses during most days of the week. Some bargain buying failed to push up the prices significantly.

Expectations for higher world wheat supplies, falling European grain prices added pressure on Chicago wheat. The FOB offers for Russian and Romanian wheat for March deliver reportedly slid 3-4 U.S. dollars to about 217 dollars per metric ton, compared to 230 dollars in late January.

A strong dollar has also made U.S. wheat less competitive, said market analysts.

As for CBOT soybeans, reports that Argentina has suspended export registrations, and will likely to raise export taxes on its soybeans supported Chicago oilseed futures.

Hopes for more purchases from the world’s leading soy buyer China have also offset some losses of CBOT soybeans. Enditem

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