Glacier FarmMedia COVID-19 & the Farm

CBOT weekly outlook: Ag commodities steady

Reduced demand for biofuel has dragged on corn

los angeles rush hour
File photo of pre-COVID-19 rush-hour traffic on the interchange between the Interstate 10 and 110 freeways near downtown Los Angeles. (Art Wager/E+/Getty Images)

MarketsFarm — Crop commodity values on the Chicago Board of Trade (CBOT) have largely stabilized as COVID-19 restrictions are relaxed in several U.S. states.

“We’ve been playing this virus for a few months now,” said Scott Capinegro of Barrington Commodities in Barrington, Ill. COVID-19-related lockdown measures decimated demand for ethanol, which put considerable pressure on corn futures.

“But now we’re trying to get states open and people moving around, and that should be a little friendly to markets.”

Relative weakness to the U.S. dollar has been supportive of market activity. Brazil’s real has gained strength, making that country’s exports globally less attractive.

“They’re going back into a grain-friendly spread, where the dollar goes lower and the real goes higher,” Capinegro said.

Wet weather in key growing regions in the U.S. has provided some support to commodity prices. Illinois is on track to set a record for the most precipitation in the month of May, and there’s more rain in the forecast for the next few days.

Since it’s likely there will be a second wave of COVID-19 cases, Capinegro said producers can only hope to break even or turn a small profit this year.

“We aren’t looking for big rallies,” he said, noting it’s hard to make predictions with so much uncertainty in the world.

“The picture is still pretty cloudy until there’s a vaccine of some sort.”

— Marlo Glass reports for MarketsFarm from Winnipeg.

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