Futures prices for U.S. soybean, corn and wheat futures fell to multi-month lows on Tuesday, as recession fears seen across commodity markets also weighed heavily on grains.
Chicago soybeans (S_1:COM) for November delivery settled -5.7% to $13.16/bu, hitting their lowest level since December 2021, while December corn (C_1:COM) closed -4.8% to $5.78 1/2 after dipping to its lowest since February, and September wheat (W_1:COM) ended -4.6% to $8.07/bu.
ETFs: (NYSEARCA:SOYB), (NYSEARCA:CORN), (NYSEARCA:WEAT)
“The worry about a landscape of rising interest rates and a slowing U.S. economy has sent grain markets into a tailspin amid reduced liquidity,” AgResources said, according to Dow Jones.
“The market is trading an assumption of deteriorating demand,” Arlan Suderman, chief commodities economist for StoneX, told Reuters.
Rains in parts of the U.S. Midwest over the July 4 weekend added to bearish sentiment in grains, although dry conditions remained a concern in some areas.
Fund traders have been exiting positions in CBOT grains, according to Friday’s data from the CFTC, which said managed money funds were sellers of more than 38K contracts of corn for the week ended June 28, more than 26K contracts of soybeans, according to Doug Bergman of RCM Alternatives.
Wet weather in Canada may be good news for wheat supplies, potentially offsetting part of the shortfall caused by Russi’a invasion of Ukraine as Canadian wheat acres are projected to rise 8.7% to 25.4M acres, the highest level in a decade, Statistics Canada said in a report.
Major farm-related stocks including ADM, Bunge and Deere fell sharply on Tuesday.