Chicago | Reuters — Chicago Board of Trade corn futures on Friday dipped below $4 per bushel in the front-month contract Cc1 for the first time since November 2020, as hefty U.S. and global supplies weighed over the market.
Chicago soybean futures also turned lower as weekly U.S. exports dropped to the lowest since last May, according to government data. News that at least three U.S.-bound cargo ships were preparing to load with soybeans at two ports in Northern Brazil also weighed on the market.
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The speed at which corn prices have fallen has startled growers and market analysts, who say low prices could impact the U.S. farm economy as producers are finalizing their spring planting plans.
Most CBOT corn futures set new life-of-contract lows, with CBOT’s March corn futures CH24ending Friday’s trading session at $3.99-3/4 per bushel. CBOT corn was trading above $6 a bushel as recently as late June.
Meanwhile, projections released by the U.S. Department of Agriculture in October forecast that it would cost U.S. farmers about $4.80 per bushel to raise corn in 2024.
“There is literally nothing holding up the corn market right now, because we just produced too much,” said Karl Setzer, partner at Consus Ag Consulting.
“It doesn’t matter that we have corn demand, or that ethanol production is up 4.3% from last year, or that feed demand is perking up,” he said. “There’s just too much corn.”
The U.S. Department of Agriculture said weekly U.S. soybean export sales hit a marketing-year low of 55,900 metric tons for 2023/24 in the week to Feb. 15, compared to analysts’ estimates for 300,000 to 800,000 tons.
Buyers instead are turning to South America, where Brazilian soybean export prices are at a steep discount to the U.S. – to about $1.50 to $1.70 per bushel lower, traders said.
And CBOT wheat turned lower, following corn, amid news that the U.S. imposed extensive sanctions against top global wheat exporter Russia.
The most-active soybean contract on the Chicago Board of Trade (CBOT) Sv1 settled down 10-3/4 cents at $11.41-3/4 per bushel. CBOT corn Cv1 closed down 5 cents at $4.13-1/2 cents per bushel, while wheat Wv1 settled down 10-1/4 cents at $5.69 a bushel.
–Reporting for Reuters by Naveen Thukral.
