MarketsFarm — Market participants on the Chicago Board of Trade (CBOT) are waiting to see how China’s novel coronavirus outbreak will impact commodity demand and the global economy.
As of Wednesday, confirmed cases neared 25,000 and the death toll was close to 500. In the midst of dealing with the mounting public health crisis, China has released three million tonnes of corn out of its state reserves.
“Some traders find that a bit negative,” said Terry Reilly, a grains analyst with Futures International, adding CBOT corn has been lower on the week due to a recent lack of U.S. exports.
China has not made good on its Phase One trade deal promises to buy U.S. soybeans, but has recently ordered 10 cargoes of soybeans from South America, which also put pressure on soybean futures.
“The trade isn’t expecting China to buy U.S. soybeans until maybe the second half of the year,” Reilly said.
Corn and soybean crops in South America are “getting larger by the week,” he added, as concerns of drought in key growing regions have subsided.
“That will hang over CBOT corn and soybean futures probably for the next couple of months.”
— Marlo Glass reports for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.