Chicago | Reuters — U.S. corn futures fell more than one per cent on Tuesday on planting progress in the world’s top producer, coupled with concerns about bird flu slowing demand for poultry feed, traders said.
Soybeans declined as the bird flu fears pressured futures for soymeal, which like corn is a major poultry feed ingredient. But wheat firmed on short-covering after prices were able to hold above last week’s lows.
At the Chicago Board of Trade, May corn settled down five cents at $3.73 per bushel (all figures US$). May soybeans ended down 2-1/4 cents at $9.75-1/4 a bushel and May wheat rose two cents to $5.00-3/4 a bushel.
Corn fell as the spread of avian influenza in the U.S. poultry sector added to concerns about slowing grain demand. The U.S. Agriculture Department on Monday confirmed a lethal strain of bird flu affecting millions of hens at an egg-laying facility in Iowa, the worst case so far in an outbreak that has reached about a dozen states.
Shares of Hormel Foods fell more than two per cent after the Minnesota-based company said that the impact of avian influenza may drag its fiscal 2015 earnings toward the lower end of forecasts.
“We have seen that (bird flu) can affect feed demand in the past when we’ve had outbreaks, not only in (the) U.S. but also overseas,” said Shawn McCambridge with Jefferies Bache in Chicago.
Corn also fell on forecasts for benign weather in the U.S. crop belt this week that should promote fieldwork. USDA said corn planting was nine per cent complete by Sunday in the 18 top-producing states, behind the five-year average of 13 per cent.
“The nine per cent (figure) was maybe a little on the light side compared with what people were thinking, but the weather forecast in general looks fairly clear into the weekend. We could see a lot of progress being made,” McCambridge said.
Further pressure came from news that Argentina authorized the export of an additional 3.5 million tonnes of its 2014-15 corn crop.
Wheat’s strength was seen as technical. Commodity funds hold a massive net short position in CBOT wheat, leaving the market vulnerable to short-covering. Still, ample world stocks and poor export demand for U.S. supplies hang over the market, capping rallies.
“All the bad news is already in the market,” said Austin Damiani of Frontier Futures.
— Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Gus Trompiz in Paris and Naveen Thukral in Singapore.