Corn Futures Sell Off After Hitting 2-Month High
January 24 2020 - 4:21PM
Dow Jones News
By Kirk Maltais
--Corn for March delivery fell 1.7% to $3.87 1/4 a bushel on the
Chicago Board of Trade on Friday, with fund investors and farmers
selling corn to take advantage of a two-month high reached
Thursday.
--Wheat for March delivery lost 1.2% to $5.73 1/2 a bushel.
--Soybeans for March delivery fell 0.8% to $9.02 a bushel.
HIGHLIGHTS
Finding Balance: Liquidation of corn positions drove prices
lower, with both large managed money and farmers selling, said Dave
Marshall of First Choice Commodities. "This week appears to be a
week of normalization," Mr. Marshall said. "I'd be heavily
surprised if we're not seeing some farmer selling -- that's
probably what got us started overnight."
For Traders, Unhappy New Year: One day after the U.S. and China
signed its phase one trade deal, there were no large purchases of
American grains by Beijing, according to Friday's export sales
report. The Lunar New Year holiday, which starts Saturday, is also
likely to keep purchases thin. "Traders are giving up on the
prospect that China will make new U.S. ag purchases for at least
the next week as [Southeast] Asia celebrates their biggest holiday
of the year," AgResource said.
Coronavirus Chaos: China locked down cities and reported more
confirmed cases of and deaths from the coronavirus, the spread of
which has the potential to crimp global grains production and
demand. Agricultural conglomerate Cargill recommended its employees
defer or cancel business travel to Wuhan, the Chinese city pegged
as the epicenter of a new virus strain, which has killed 26 people
in China and has spread to other nations, including the U.S.
INSIGHT
Ta-Ta, Tariffs: Chinese buying of grains and oilseeds is likely
to reach only 50% to 60% of the purchase target set for 2020 and
2021 in the U.S.-China trade pact, said Lief Chiang, grains and
oilseeds analyst at Rabobank. "This means China will have to buy
large quantities of non-grains and oilseed agricultural products,
such as meat, seafood, dairy and cotton to make up the difference."
To facilitate the high procurement, most of the existing
retaliatory tariffs are expected to be removed soon, Mr. Chiang
said.
AHEAD
--The USDA releases its weekly grain export inspections data at
11 a.m. ET Monday.
--The EIA releases its weekly update on ethanol production and
inventories at 10:30 a.m. ET Wednesday.
--Mondelez International Inc. (MDLZ) reports fourth-quarter
results at 4:05 p.m. ET Wednesday.
--Archer Daniels Midland Co. (ADM) reports fourth-quarter
results after the market closes on Wednesday.
(Jacob Bunge and Lucy Craymer contributed to this article.)
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
January 24, 2020 16:06 ET (21:06 GMT)
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