Corn was sharply lower today with CZ posting its biggest single day loss of 2020. CZ fell 14 ½ cents; CH dropped 12 ¼ cents as a “risk-off” trade was apparent in grain and soybean markets today along with equity and energy markets. Commodity funds were sellers of an estimated 8100 corn contracts as of midday. An increase in Covid-19 outbreaks in the U.S. and around the world and profit taking in front of next week’s elections ignited overnight selling which accelerated as the day wore on. Improving weather in South America is allowing both Brazilian and Argentine producers the opportunity to make rapid corn planting progress. Germany today shut down several portions of its economy including non-essential travel as it struggles with increasing numbers of Covid cases. The rise in cases in the U.S. has analysts questioning ethanol demand in the coming months. The weekly EIA production report did show an increase in ethanol production last week of 3.1%. It also reported that ethanol inventories declined last week to their lowest level of 2020. Traders will be watching upcoming reports for signs of slowing fuel demand. Tomorrow’s export sales report is expected to include corn sales near 45 million bu.
A “risk off” mentality prevailed in the soybean market today, pushing bean contracts to sharp losses, with front months losing to deferred contracts. SX settled 25 cents in the red and SH was 21 ¾ cents lower. Commodity fund selling helped to push the market sharply lower as funds sold an estimated 20,000 soybean contracts today. Like corn, soybeans were a victim of profit taking in front of next week’s elections. Concern about rising cases of Covid-19 around the world also lent a chilling effect to today’s market. NASS this morning did announce the sale of 120,000 MTs of soybeans to unknown destinations along with a 110,000 MT sale to Egypt, but it appears that China has largely completed its purchase of U.S. soybeans and is now booking Brazilian soybeans for May and June shipment. A damp week across a large part of the Midwest is slowing the completion of the soybean harvest, but it appears that favorable harvest weather will return by the weekend and next week, allowing the harvest to be nearly finished. Brazilian farmers are said to be rapidly seeding soybeans as recent rains have improved soil moisture levels. Tomorrow’s weekly export sales report is expected to show soybean sales near 55 million bu.
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