Chicago | Reuters — U.S. corn, soybean and wheat futures fell to multi-month lows on Tuesday, joining a broad sell-off in crude oil and equity markets tied to fears of a global economic recession and waning demand for commodities, analysts said.
Beneficial rains in portions of the U.S. Midwest over the Independence Day weekend bolstered crop prospects, adding to bearish sentiment.
Chicago Board of Trade benchmark December corn futures settled down 29 cents Tuesday at $5.78-1/2 per bushel after dipping to $5.71, the contract’s lowest since Feb. 4 (all figures US$). CBOT corn and wheat futures have erased all their gains since Russia invaded Ukraine, a major corn and wheat exporter. Russia’s late-February move on Ukraine disrupted Black Sea exports and sent global grain prices soaring.
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CBOT November soybeans settled down 79-1/4 cents on Tuesday at $13.16 a bushel and September wheat fell 39 cents to $8.07 a bushel.
“The dollar is again serving as a safe-haven asset amid rising global economic fears, creating greater challenges for the commodity sector,” said Arlan Suderman, chief commodities economist for StoneX.
“The market is trading an assumption of deteriorating demand,” he added.
Large speculators have been sellers of CBOT corn futures in recent weeks but still hold a sizable net long position, leaving the market vulnerable to continued bouts of long liquidation.
After the CBOT close, the U.S. Department of Agriculture’s weekly U.S. crop ratings declined more than analysts expected. USDA rated 64 per cent of the corn crop as good to excellent as of Sunday, down three percentage points from the previous week, while analysts surveyed by Reuters on average had expected a two-point decline.
USDA rated 63 per cent of the soybean crop as good to excellent, down from 65 per cent a week earlier. Analysts on average had expected a one-point decline.
Rains crossed portions of the Corn Belt on Monday.
“We did get some help in a lot of areas yesterday,” said Don Roose, president of Iowa-based U.S. Commodities, referring to Monday’s showers. “We are marching towards a crop, but we don’t have it in the bin yet,” Roose said.
In Canada, farmers are forecast to have planted 25.4 million acres of wheat this year, Statistics Canada reported, the most in nine years. The figure topped an average of trade estimates for 24.7 million acres.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago.
