Chicago | Reuters — U.S. corn futures fell to contract lows on Thursday and wheat futures slumped to the lowest level in 2 -1/2 months in tandem with tumbling equities and energy markets amid investor fears of the coronavirus outbreak developing into a pandemic.
Soybeans fell to their lowest point in nine months but later recovered and ended mixed as soymeal prices firmed on expectations for an increase in Argentine export taxes, which could boost demand for U.S. soy.
Grain markets, however, remain anchored by tumbling outside markets. Global stocks and oil prices were down sharply and U.S. Treasury yields hit record lows as traders fretted over the economic impact of the virus, which has infected about 80,000 people globally and killed more than 2,700.
“Fear knows no reason. This is a knee-jerk reaction,” said Jim Gerlach, president of A/C Trading. “People still have to eat, but the food commodities are getting sucked into the vacuum of a fear-based market right now.”
Chicago Board of Trade (CBOT) May corn fell 6-1/2 cents to $3.68 a bushel by after notching a life-of-contract low earlier in the session (all figures US$). Nearly all corn contracts hit fresh lows on Thursday.
CBOT May wheat fell 8-1/4 cents to $5.27-1/2 a bushel, the contract’s lowest mark since Dec. 12. The contract fell through chart support at its 200-day moving average, a technical level it has not breached since mid-November.
May soybeans finished up three cents at $8.95 a bushel, rebounding from an earlier drop to $8.78-1/4, the contract’s lowest level since May 23, 2019. Deferred-month contracts were down as much as 1-3/4 cents.
Soybeans bounced from the lows at midmorning, led by higher soymeal futures, which jumped as traders covered short positions following a move by Argentina’s agriculture ministry to suspend farm export registrations. The move was seen as heralding a rise in grain export tariffs in the debt-stricken country.
However, the prospect of a record Brazilian harvest flowing onto the market in the coming weeks curbed U.S. prices.
Weekly corn, soybean and wheat export sales data from the U.S. Department of Agriculture also weighed on futures as sales of all three commodities last week were at or below the lowest trade estimates.
A slumping real in Brazil, the world’s top soybean exporter, and lower rouble in Russia, the top supplier of wheat, also anchored markets as the currency weakness could make it harder for U.S. shipments to compete in global markets.
— Reporting by Karl Plume in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.