Chicago | Reuters — Chicago corn futures slid on Monday on favourable U.S. planting weather coupled with struggling crude oil prices that continue to pressure demand for corn-based ethanol, analysts said.
Chicago Board of Trade (CBOT) wheat futures slipped to one-month lows as expected rain across Europe eased concerns about crop stress while competitive Saudi import tender prices tempered coronavirus supply tension concerns.
Soybeans ended lower as spillover pressure from corn futures offset support from anticipated additional Chinese purchases of U.S. soybeans.
“We saw the flash sales last week, got the market hoping we’d see a few more, then nothing, so we retreated backwards,” said Karl Setzer, a commodity risk analyst at AgriVisor.
Fieldwork was the focus in the U.S. Midwest, where farmers are seeding the 2020 corn crop.
“We’re just gonna be planting like crazy all week,” said Mike Rowan, president of Crossroads Cooperative in Sidney, Nebraska.
Analysts expect the U.S. Department of Agriculture to report U.S. corn planting as 22 per cent complete and soybean planting as eight per cent complete in its weekly crop progress report due later on Monday.
Meanwhile, worries about demand destruction for corn hung over the market. Archer Daniels Midland on Thursday said ethanol production at two corn dry mill facilities would be idled temporarily because of lower gasoline demand.
China signaled last week it may buy 20 million tons of corn and 10 million tons of soybeans to fill strategic reserves, though traders remain skeptical.
“China could be a way to make up for the lost usage in the ethanol sector. But for now, we’re still pricing in that loss,” said Terry Roggensack, partner at the Hightower Report.
Most-active CBOT July corn settled down 9-3/4 cents at $3.13-1/4 a bushel (all figures US$).
CBOT July wheat fell 6-3/4 cents to end at $5.24-3/4 a bushel. July soybeans fell three cents to settle at $8.36-1/2.
Weather forecasts pressured the wheat market, with rain expected across Europe and the Black Sea region this week after a prolonged dry spell.
Recent global wheat purchases signal demand, but a strong dollar is making U.S. grains less competitive.
“Purchases on the world market are certainly not for the U.S., with how cheap the currencies are,” said Roggensack.
Traders said prices paid by Saudi Arabia in purchasing 655,000 tonnes of wheat announced Monday pointed to strong competition for the forthcoming season.
Russia confirmed it would not halt exports at the end of this season until all grain booked under a now-filled quota had been shipped.
— Reporting for Reuters by Christopher Walljasper in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.