Chicago | Reuters — U.S. corn futures stabilized on Tuesday and soybean futures firmed in a mild recovery from the prior session’s steep drop on fears about the impact of the coronavirus outbreak.
Wheat futures were mixed after posting fresh lows on technical selling and pressure from ample global supplies and stiff competition for U.S. wheat in export markets.
Grains largely shrugged off a second straight day of sharply lower outside markets, with Dow Jones Industrials and crude oil each down around three per cent.
Grain futures slumped to multi-month lows on Monday on worries about the spread of coronavirus outside of China and its impact on global economic growth.
“The market is not seeing that heavy dose fund liquidation so that allowed corn and beans to bounce today … Wheat, though, did take out yesterday’s lows and is lower on the day,” said Brian Hoops, president of U.S. broker Midwest Market Solutions.
Fears mounted that the coronavirus outbreak in China will grow into a pandemic with serious consequences for countries around the world, after sharp rises in infections in South Korea, Italy and Iran and other cases found in the Persian Gulf.
“There is lots of uncertainty around coronavirus at present which makes it hard to predict market direction,” said Phin Ziebell, agribusiness economist at National Australia Bank.
Muted U.S. grain and soy export demand by China, despite the Phase One trade deal that includes a vow to ramp up purchases, remained an anchor on futures prices.
Chicago Board of Trade May soybeans were up 5-3/4 cents at $8.88-1/4 a bushel, while May corn was up 1/4 cent at $3.76-1/2 a bushel (all figures US$).
CBOT May wheat ended near its session high, settling up 2-1/4 cents at $5.37 a bushel after reaching a low of $5.28-1/2 early in the session, the lowest since Dec. 12. The contract hit chart resistance at its 100-day moving average, a key technical level that it breached on Monday for the first time in more than three months, but held chart support at its 200-day moving average.
Strong wheat crop prospects in key global production areas, with mild winter weather limiting winter crop frost damage this season, weighed on the market along with a weakening Russian ruble, which makes exports from the world’s top supplier more attractive to importers.
The ruble (1.53 U.S. cents) fell more than two per cent against the U.S. dollar on Tuesday.
— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago; additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore.