U.S. grains: Corn, wheat decline as Wall Street tumbles

Chicago soy turns lower

CBOT May 2020 wheat with 20-, 50- and 100-day moving averages. (Barchart)

Chicago | Reuters — Chicago corn and wheat futures declined on Wednesday, following as Wall Street equity markets fell sharply on fears of the coronavirus causing a global recession and a lack of immediate U.S. measures to counter the economic fallout.

Soybean futures turned lower, erasing early advances tied to a pick-up in export demand for U.S. soy.

Chicago Board of Trade May corn futures settled down three cents at $3.74-1/2 per bushel. May wheat ended down 9-1/2 cents at $5.12-3/4 a bushel and May soybeans finished down three cents at $8.73-1/4 a bushel.

“With the crude oil down and equity markets down, it’s just hard to make any type of a positive fundamental case for any of these grains,” said Brian Hoops, president of Midwest Market Solutions.

All three U.S. stock averages sank, midway through a week whipsawed by news about coronavirus developments and economic stimulus hopes. The World Health Organization on Wednesday said it now considers the COVID-19 outbreak a pandemic.

The Dow Jones Industrial Average fell 1,388.36 points, or 5.6 per cent, to 23,629.8, the S+P 500 lost 145.7 points, or 5.1 per cent, to 2,736.53 and the Nasdaq Composite dropped 411.69 points, or 4.9 per cent, to 7,932.56.

A lack of details from the Trump administration regarding its plans for fiscal stimulus, and partisan wrangling in Washington, added further unknowns to the mix.

“It’s certainly a risk-off climate,” said Ted Seifried, chief ag market strategist for Zaner Group in Chicago.

“Honestly, I don’t think in the long run this (coronavirus) is going to have a huge effect on global demand for anything … But the biggest problem we have in the markets isn’t the loss of demand; it’s the fear,” Seifried said.

CBOT soybean futures drew early support when the U.S. Department of Agriculture confirmed private sales of 194,000 tonnes of U.S. soybeans to unknown destinations, the third such soybean sales announcement in as many days.

“That’s mildly supportive; we badly need some soybean exports,” Hoops said.

But the declines in equity markets overshadowed the export news.

The U.S. Energy Information Administration said U.S. ethanol stockpiles last week fell to 24.33 million barrels, backing down from the previous week’s record high, while output of the corn-based fuel fell to 1.04 million barrels per day.

Farm office FranceAgriMer increased its forecast for French soft wheat exports outside the European Union this season for the sixth month in a row, saying it saw no immediate impact from a coronavirus outbreak on brisk demand for French supplies.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago; additional reporting by Naveen Thukral in Singapore.

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