Corn Sells Off on Coronavirus Concerns

Date : 01/27/2020 @ 8:51PM
Source : Dow Jones News

Corn Sells Off on Coronavirus Concerns

   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)

Copyright (c) 2020 Dow Jones & Company, Inc.


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