Chicago | Reuters — U.S. corn futures fell 1.4 per cent on Tuesday to a fresh 10-1/2-year low as crumbling demand for fuel due to the global coronavirus pandemic threatened the ethanol sector.
“They are taking their cue from energy,” said Mark Schultz, chief market analyst at Northstar Commodity. “It is a pretty tough business right now.”
A round of bargain buying pulled the corn market from its session lows in afternoon trading.
Soybean futures ended higher on bargain buying after hitting an 11-month low. Hopes that the recent declines will stir up some export demand added support, traders said.
Wheat futures were mixed, with the most-active Chicago Board of Trade soft red winter wheat contracts pulled lower by the decline in corn. MGEX spring wheat also was weak but K.C. hard red winter wheat contracts firmed on worsening crop conditions in the U.S. Plains.
Chicago Board of Trade July corn futures ended down five cents at $3.17-1/4 a bushel (all figures US$). On a continuous basis, the most-active corn futures contract bottomed out at $3.09 1/4 a bushel, its lowest since Sept. 11, 2009.
Brent crude futures plunged 25 per cent on Tuesday to the lowest in nearly two decades, a day after panicked traders sent U.S. oil below minus $40 per barrel on fears of a historic supply glut.
Expectations for massive U.S. corn acreage added further pressure, with farmers accelerating their seeding pace as temperatures rise.
“Farmers are already out in the fields, ignoring raindrops, and serious planting is expected to get done this week, on the order of a quarter of the crop,” Charlie Sernatinger, global head of grain futures, said in a note to clients.
The U.S. Agriculture Department said on Monday afternoon that U.S. farmers had planted seven per cent of their intended corn area as of Sunday, in line with analyst expectations in a Reuters poll.
Soybean plantings were two per cent complete, also in line with market forecasts.
CBOT soybeans for July delivery were 4-1/2 cents higher at $8.40-3/4 a bushel. The most-active contract bottomed out at $8.18-1/2, its lowest on a continuous basis since May 23, 2019, before recovering.
CBOT July soft red winter wheat was 1-1/4 cents lower at $5.46-1/4 a bushel. Technical support was noted at its five-day moving average.
USDA’s report on Monday afternoon also said that 57 per cent of the U.S. winter wheat crop is in good-to-excellent condition, down from 62 per cent last week.
— Mark Weinraub is a Reuters commodities correspondent in Chicago; additional reporting by Michael Hogan in Hamburg and Colin Packham in Sydney.