Chicago | Reuters — U.S. grain and soybean futures sank to multi-month lows on Monday on worries about the coronavirus pandemic denting the global economy and chilling end-user demand for commodities, traders said.
“The fear is still that it will only get worse as the week unfolds,” said Mark Schultz, chief analyst at Northstar Commodity Investment Co. “We have been in this pattern — whatever it is on Friday. It is worse on Monday.”
Soybean futures notched the biggest decline, with the most-active Chicago Board of Trade contract sagging 2.8 per cent to its lowest on a continuous basis since May. It was the biggest daily percentage decline for the most-active contract since August 2018.
CBOT corn futures hit their lowest since September and soft red winter wheat futures hit their lowest since October.
Agriculture futures were led lower by steep declines in financial markets. The benchmark stock index slid as much as 11.4 per cent early in the session, shedding about $2 trillion in market value, before bargain-hunting helped the main indexes claw back some losses (all figures US$).
Chicago Board of Trade May soybean futures settled down 27 cents at $8.21-3/4 a bushel.
Soymeal and soyoil futures also were weaker, with soyoil plunging 4.9 per cent. On a continuous basis, the most-active soyoil futures contract fell to its lowest since October 2006.
The soy complex was fighting additional headwinds from an 8.6 per cent decline in the crude oil market.
“The more countries ‘freeze’ public life, close their borders and cancel flights, the greater the impact will be on oil demand,” Commerzbank analysts said.
Oilseed markets are sensitive to crude oil as the crops are widely used in biodiesel fuel.
U.S. soybeans were also being curbed by an expected record harvest in Brazil.
CBOT May corn was down nine cents at $3.56-3/4 a bushel and CBOT May wheat was 12-1/4 cents lower at $4.93-3/4 a bushel.
Forecasts for some crop-boosting rain in the U.S. Plains added fundamental pressure to the bearish tone in the wheat market.
The U.S. Agriculture Department said on Monday morning that weekly export inspections came in at 977,879 tonnes for corn, 449,653 tonnes for wheat and 436,358 tonnes for soybeans. The weekly totals were in line with market forecasts.
— Reporting for Reuters by Mark Weinraub; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.