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U.S. grains: Corn, soy, wheat fall on coronavirus fears

Grains close above session lows

cbot march corn
CBOT March 2020 corn with 20-, 50- and 100-day moving averages. (Barchart)

Chicago | Reuters — U.S. corn, soybean and wheat futures fell on Monday, with investors shedding risky assets amid fears the coronavirus outbreak in China could dent the global economy, traders said.

“The same thing happened with the SARS outbreak, which ended up costing the global economy $40 billion in 2002-03,” Craig Turner, senior commodities broker with Daniels Trading in Chicago, said in an email (all figures US$). “The playbook right now calls to sell first and ask questions later.”

But agriculture markets closed above their session lows as bargain buyers stepped into the market after soybeans hit their lowest level since Dec. 12, wheat its lowest since Jan. 14 and corn its lowest since Jan. 17.

Traders also said the market was still awaiting signs of a pickup in Chinese demand following the Phase One trade deal between Beijing and Washington.

Chicago Board of Trade March soft red winter wheat futures ended down 1-1/4 cents at $5.72-1/4 a bushel. MGEX spring wheat futures also closed in negative territory but K.C. hard red winter wheat futures eked out modest gains.

CBOT March soybean futures were 4-3/4 cents lower at $8.97-1/4 a bushel, their fifth straight day of declines. Soybeans have fallen in seven of the eight trading sessions since the trade deal with China was signed. CBOT March corn was down 6-3/4 cents at $3.80-1/2 a bushel.

The U.S. Agriculture Department said on Monday morning export inspections of wheat fell to 223,994 tonnes in the week ended Jan. 23 from 516,309 tonnes a week earlier. The weekly total was well below analysts’ forecasts that ranged from 400,000 tonnes to 600,000 tonnes.

Soybean export inspections were down to 1.039 million tonnes from 1.206 million tonnes but in line with expectations. Export inspections of corn rose to 668,559 tonnes from 396,613 tonnes and also matched a range of market forecasts.

Wall Street’s main indexes fell more than one per cent on Monday as investors worried about the economic fallout of the virus outbreak in China that has prompted the country to extend the Lunar New Year holidays and businesses to close some operations.

“The outbreak is pretty serious, it is dragging down stock and commodity markets, including agriculture products,” said Ole Houe, director of advisory services at brokerage IKON Commodities in Sydney.

— Reporting for Reuters by Mark Weinraub in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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