Chicago | Reuters — Chicago soybean futures fell more than one per cent on Monday in the market’s steepest drop in 1-1/2 weeks, as livestock processing plant closures that impact feed supply weighed on soymeal prices.
Corn also sagged despite optimistic news that OPEC might curb oil production, after a deal was signed over the weekend.
Wheat rose in early trading on concerns of frost damage to parts of the U.S. crop, but expectations of larger U.S. and global stockpiles drove the market lower.
Several U.S. meat processing plants have temporarily closed in the last week after outbreaks of the COVID-19 coronavirus among workers, prompting fears of livestock backing up at feedlots and on farms.
“Meal has been a big weight around the soybean market’s neck, with all the news about animal processing plants shutting down,” said Tom Fritz, a commodity broker with EFG Group LLC.
Actively traded Chicago Board of Trade (CBOT) May soybeans fell 9-1/4 cents at the close to $8.54-1/4 a bushel, pressured by sinking soymeal futures (all figures US$). The May through September soymeal futures contracts posted life-of-contract lows on Monday.
May corn fell 1/4 cent to $3.31-1/2 a bushel while CBOT May wheat dropped 1-1/2 cents to $5.55 a bushel.
Corn futures continue to be hammered by diminished demand for ethanol fuel, which makes up nearly 40 per cent of U.S. corn consumption.
“Miles driven hammered gasoline demand, and that had as big an impact on ethanol as the oil crisis. And that hasn’t been resolved yet,” said Dale Durcholz, analyst with Grain Cycles.
The wheat market continues to face headwinds from expectations of a larger U.S. harvest than analysts projected, but was helped by cold weather in the southern U.S. Plains, which could damage emerging crops.
“It takes a couple days to see the impact on that. They’re going to have another cold night, so I’d be surprised if wheat stays down,” said Fritz.
The U.S. Department of Agriculture (USDA) is due to update its weekly crop conditions assessment after the close of trading on Monday, including wheat crop condition ratings as of Sunday.
Analysts surveyed by Reuters expect the U.S. winter wheat crop to be rated 62 per cent good to excellent in the weekly report, unchanged from a week earlier.
Private exporters reported the sale of 120,000 tonnes of hard red winter wheat to unknown destinations, USDA said on Monday. That followed a 165,000-tonne sale to China on Friday.
— Reporting for Reuters by Christopher Walljasper in Chicago; additional reporting by Karl Plume in Chicago and Naveen Thukral in Singapore.