Corn Sinks as Oil Tumbles Again
30 March 2020 - 9:17PM
Dow Jones News
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)
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