Weekly Chicago crop futures fall amid COVID-19 uncertainty

CHICAGO (Xinhua) – Chicago Board of Trade (CBOT) agricultural futures fell for the trading week ending May 1, as Americans waited for reassurance they were safe from the COVID-19 outbreak as some regions tried to reopen businesses.

Corn ended slightly lower for the week, reflecting weak United States (US) ethanol demand stemming from stay-at-home orders. Through the week ending April 24, ethanol production fell to just 158 million gallons, down 48 per cent from the same period a year ago.

Miles driven will be watched closely as areas of the US try to reopen after six to eight weeks of staying at home. But profitability is needed before shuttered ethanol plants return to operation. AgResource, a Chicago-based agricultural research firm, said a major rebound is unlikely to happen by midsummer. The Agricultural Research Council (ARC) also forecast weakness into summer.

Amid a glut of ethanol supply, about 65 per cent to 70 per cent of the US corn crop is expected to be planted by May 10, according to the ARC.

US wheat futures ended the week mixed, in a trend that should continue into summer owing to a mid-April freeze and pockets of dryness across the western Plains. Wheat faces headwinds in cheap US and South American corn prices as well as import financing difficulties in major importing countries.

Soybeans finished the week moderately higher after China bought seven to 10 cargoes of the crop before beginning the long May Day holiday. The US ship lineup indicated that soybeans inspected for export today will total between 15 million and 19 million bushels.

AgResource looks for 17 per cent to 21 per cent of the US soybean crop to be planted. The immediate concern for the market is contracting feed demand that is expected in coming weeks. The World Agricultural Supply and Demand Estimates report for May is expected to show the tightest soybeans stocks of the 2020/21 season.