Corn Sells Off on Coronavirus Concerns
January 27 2020 - 3:51PM
Dow Jones News
By Kirk Maltais
--Corn for March delivery fell 1.7% to $3.80 1/2 a bushel on the
Chicago Board of Trade on Monday, as the spread of coronavirus
globally rattles traders hoping for announcements of new Chinese
agricultural purchases.
--Soybeans for March delivery fell 0.5% to $8.97 1/4 a
bushel.
--Wheat for March delivery fell 0.2% to $5.72 1/4 a bushel.
HIGHLIGHTS
Contagion Spreading: Traders were unnerved Monday as China's
struggles to contain the spread of a coronavirus strain, which has
infected more than 2,700 people and killed at least 82, according
to authorities. Traders worry the contagion will delay Chinese
buying of U.S. agriculture at levels promised in the phase one
trade deal. "There is no doubt that some of the recent strength in
the corn market was in anticipation of an increase in Chinese corn
business with the U.S., and while that may not be in jeopardy, it
may be delayed for a significant period of time because of the
impact of the virus in China," said Tomm Pfitzenmaier of Summit
Commodity Brokerage.
Selling Pressure: Grains futures on the CBOT recovered slightly
after starting lower, with AgResource saying traders are in a
risk-off mindset. "There's little known about how far reaching or
impactful coronavirus will be in the days & weeks ahead," the
firm said. "For now, risk exposure is being reduced." However, the
selling of earlier in the day has created incentive for
bargain-hunting traders to keep an eye on the market.
INSIGHT
Weak Wheat: Export inspections for wheat totaled only 223,994
metric tons--well off of expectations and well below last week's
total, according to the USDA's export inspections data released
Monday. Of that, Japan is the listed destination for nearly 82,000
tons of wheat, while Ecuador and Mexico are the next biggest
destinations. Export inspections of corn and soybeans fell within
analyst targets, at 668,559 tons and 1.04 million tons,
respectively. The report did little to reduce the malaise weighing
on grain export demand.
Grand Slam: Denny's is ordering up more Beyond Meat burgers
following a test launch last year in Los Angeles, the companies
say. The chain will roll out Beyond's plant-based burger at more
than 1,700 locations across the U.S. and Canada on Jan. 30, making
it the latest big restaurant operator to launch the new generation
of meatless burgers. For producers of soy and other raw materials
used in plant-based meat substitutes, the proliferation of meatless
burgers is a hopeful sign for better domestic demand.
AHEAD:
--The USDA releases its biennial capacity of refrigerated
warehouses report at 3 p.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 contributed to this article.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
January 27, 2020 15:36 ET (20:36 GMT)
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