CHICAGO- US soybean futures sank to their lowest level in more than six-weeks as fears over the coronavirus spreading from China triggered broad-based selling.
Corn and wheat futures also weakened as the US Centers for Disease Control and Prevention confirmed a second US case of the new virus in Chicago. The discovery further spooked traders after the outbreak in China killed 26 people and infected more than 800.
The virus is expected to dent growth in China, the world’s top importer of soybeans, after months of economic worries over trade tensions with the United States. Equities and other commodities including oil and copper fell as investors moved into safe-haven assets.
“It’s risk-off everywhere,” said Ted Seifried, chief ag market strategist for Zaner Group in Chicago.
The most actively traded Chicago Board of Trade soybean contract dropped 0.8 percent to $9.02 a bushel and reached its lowest price since Dec. 12. CBOT wheat shed 1.5 percent to close at $5.73-1/2 a bushel, while corn slid 1.8 percent to $3.87-1/4.
Traders and farmers continued to wait for signs of increased Chinese buying of US farm goods after Beijing pledged to significantly increase imports in an initial trade deal the countries signed last week. The agreement is meant to reduce tensions after nearly two years of a tit-for-tat tariff war.
“The stigma on soybeans of China not buying is a problem,” Seifried said.
Soybeans are the biggest US crop export to China and the oilseed market has been particularly sensitive to developments in the trade dispute.
Brazil, a rival soybean supplier, is expected to harvest a massive crop, providing stiff competition for sales to China.
“There has been bearish supply news out of South America via a monster Brazilian crop, but I think the majority of the selling of late is coming from this coronavirus story,” said John Payne, senior futures and options broker for Daniels Trading in Chicago. — Reuters
