Aug 9, 2021
Grains, soybeans tumble as spreading virus fuels demand concerns
Corn, wheat and soybeans fell as a resurgent virus fueled demand concerns amid a broader pullback in commodities.
New coronavirus cases in the U.S. surged to the highest weekly level since early February, fueled by the highly transmissible delta variant. Oil futures touched an 11-week low, potentially signaling weaker demand for biofuels derived from corn and soybeans.
Rain forecast throughout the U.S. Farm Belt this week, including in drought-stressed North Dakota, further weighed on crop prices.
Benchmark soft winter wheat led the decline, falling as much as 1.5 per cent to US$7.0825 a bushel, but still above the 50-day moving average. Spring wheat, grown mainly in the U.S. northern Plains, also declined, as did canola.
Also weighing on fuel prices was a report by climate scientists warning that time is running out to prevent catastrophic human-driven global warming, according to Charlie Sernatinger, head of global grain futures at ED&F Man Capital Markets Inc.
“The UN came out with a ‘code red’ for climate change this morning, and it is crashing petroleum prices,” Sernatinger said in a note on Monday.
Grains traders are awaiting a key report later this week from the U.S. Department of Agriculture, which will update estimates for world output and stockpiles. Producers from Canada to Russia to France have suffered from adverse weather recently, but there are also signs that still-elevated crop prices are turning off buyers.
Corn, soybeans and lean hogs all fell as the COVID-19 resurgence in China is hurt fuel demand as well. The outbreak could also cut into restaurant purchases of foods like cooking oils and meat and disrupt logistics in a major consumer of farm goods.