Corn Sinks as Oil Tumbles Again

By Kirk Maltais

--Corn for May delivery fell 1.4% to $3.41 1/4 a bushel on the Chicago Board of Trade on Monday, following oil down as crude prices hit an 18-year low.

--Wheat for May delivery fell 0.3% to $5.69 1/2 a bushel.

--Soybeans for May delivery rose 0.1% to $8.82 1/4 a bushel.

HIGHLIGHTS

Crude Corn Connection: The tight link between oil and corn futures continues, with WTI light sweet crude oil futures down 6.2% Monday, to just above $20 per barrel and corn futures falling. Plunging oil is bad news for ethanol producers' margins - forcing more ethanol makers to halt production in turn crimping corn demand.

Wheat Wobbles: The short-term demand spike in wheat, due to stepped-up consumer need for flour products like pasta and bread, appears to have run out of steam after wheat futures rose roughly 16% last week. Even with wheat slipping Monday, grains traders believe futures have room to move higher, based on supply constraints in countries like Russia. "Traders remain nervous over availability of some wheat exported as Russia has plans for grain export quotas for the rest of the season," said RJO Futures.

INSIGHT

Nail Biting Time: Grains traders tentatively await Tuesday's reports from the USDA - with both grains stocks and planting intentions reports scheduled to be released at noon tomorrow. "The general attitude is that the planting numbers will not come in far from the Outlook Forum numbers, " says Charlie Sernatinger of ED&F Man Capital. "The stocks in all positions is only important for corn, and we haven't had a bullish stocks number since Sonny Perdue has taken over as Ag Secretary." In general, corn production is expected to be higher this year - with acreage projected around 94 million acres in 2020 by the USDA.

Brazil Beans Almost Harvested: Brazilian farmers had finished harvesting work on 76% of the area planted with the soybean crop as of March 26, according to agricultural consultant AgRural. That's ahead of the five-year average for the date, the group said. Dry weather in the southern state of Rio Grande do Sul has allowed harvesting there to advance, but has also hit output, and the state's farmers aren't expecting productivity to recover this season, AgRural said. With soybean harvesting completed in many areas, farmers have already started planting their winter crop of corn, and dry weather in the states of Mato Grosso do Sul, Parana and Sao Paulo is a concern, the consultancy said.

Kazakhstan Quota: Kazakhstan has lifted its export ban on wheat flour, instead opting to institute quotas on wheat and wheat-product exports, according to reports. The country's agricultural ministry has yet to provide any details on what the quota would entail. However, this indicates to grains traders that the global supply picture may not be as dire as previously expected in the wake of the coronavirus crisis. "Millers there insist wheat stocks are more than adequate," said AgResource. Kazakhstan is projected to produce 11.5 million metric tons of wheat this year.

AHEAD:

--Conagra Brands Inc. reports third-quarter earnings before the market opens Tuesday.

--The USDA releases its quarterly grains stocks report at noon ET Tuesday.

--The USDA releases its prospective plantings report at noon ET Tuesday.

--The EIA releases its weekly update on ethanol production and inventories at 10:30 a.m. ET Wednesday.

Jeffrey Lewis contributed to this article.

Write to Kirk Maltais at kirk.maltais@wsj.com

(END) Dow Jones Newswires

March 30, 2020 16:02 ET (20:02 GMT)