SOY/GRAINS: Soybeans Head for Biggest Monthly Slump Since 2018

(Bloomberg) --

Soybean futures headed for their biggest monthly drop since mid-2018 as the spreading coronavirus upends supply chains in top consumer China and crop outlooks improve in Brazil and Argentina.

Prices are down about 8% this month amid a broader commodity selloff in the wake of the virus outbreak. The spread of cases will keep many Chinese regions on extended holidays, potentially disrupting supply chains and logistics. That’s compounding disappointment over the country’s lack of buying of U.S beans since it signed a trade deal earlier this month.

In Brazil, expectations for a record harvest may expand further, according to consultant MD Commodities. Argentina may also collect a bigger-than-expected crop after beneficial rains, the Buenos Aires Grain Exchange said on Thursday.

SOY/GRAINS: Soybeans Head for Biggest Monthly Slump Since 2018
Drivers
  • At Least Two-Thirds of China Economy to Stay Shut Next Week
    • More than a dozen Chinese provinces announced an extension of the current Lunar New Year holiday by more than a week
    • The U.K. confirmed its first two cases, while the U.S. and Japan advised citizens to avoid traveling to China
  • Wilmar Says Hubei Unlikely to Run Out of Animal Feed
    • Potential shortage was caused by uncertainty over whether transportation of feed supplies and raw materials will be interrupted
  • AGS SURVEY: Traders Turn Neutral on Soy on Coronavirus Jitters
  • Brazil Soybean Output May Reach Record 128m Tons
    • The 2019-20 harvest, estimated at 126m tons, has the potential to reach 127m to 128m tons: MD Commodities
  • Argentina’s Soybean Production Prospects Bolstered by Rain
Futures
  • Chicago soybeans for March were little changed at $8.77 a bushel
    • Most-active futures are near the lowest since early December
  • Chicago wheat for March was steady at at $5.59 3/4 a bushel
  • In Paris, March wheat declined 0.4% to EU191.50/ton
    • Futures fell even as Egypt bought French wheat in a tender on Thursday
    • The Russian export estimate has been cut by almost 1m tons by SovEcon
  • Chicago corn for March added 0.3% to $3.80 3/4 a bushel

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