Weekly Chicago crop futures fall as COVID-19 batters ethanol output

CHICAGO (XINHUA) – Chicago Board of Trade (CBOT) agricultural futures fell for the trading week ending April 17, with corn tumbling amid a deepening drop in United States (US) ethanol production.

Corn futures fell to new contract lows as ethanol production decreased further during the week ending April 9, down 44 per cent from a year ago. Ethanol, a major user of corn, is seeing a glut of supply amid the global spread of stay-at-home orders that are keeping motorists off the road.

Additional weekly US ethanol declines of 10 million to 15 million gallons are anticipated by the end of April, according to AgResource, a Chicago-based agricultural research firm.

US and world corn stocks for this year are expected to swell further given that drought is unlikely to develop in the first half of the 2020 growing season in the US Midwest. The Agricultural Research Council (ARC) expects December corn futures to fall to USD2.70-2.90 by late summer.

Wheat futures ended the week sharply lower amid improved prospects for rainfall in Europe’s Black Sea region during the second half of April. Wheat’s longer-term price outlook hinges almost solely upon EU and Black Sea rainfall in April, May and early June.

The US Plains and Midwest could see above-trend US winter wheat yields, given favourable soil moisture conditions. Additional precipitation is expected to arrive in Oklahoma and Kansas in the week ahead. That said, a global economic contraction in 2020 will weigh on growth in the global wheat trade, according to market analysts.

Soybean futures were lower each day last week amid a lack of export demand. The Commodity Futures Trading Commission (CFTC) Commitments of Traders (CoT) report showed that funds were net sellers of 4,600 soybeans contracts, cutting their net long position to just 12,500.