Swine Flu Fears Send Grain Prices Plummeting Amid Global Outbreak

Strategic Insights -

A global swine flu outbreak triggered a sharp decline in grain prices, with cash prices for corn and soybeans falling to 1-3 week lows. Analysts attribute the drop to reduced feed demand from poultry and pork industries, which could have a lasting impact on livestock producers. Domestic basis for both corn and soybeans remained relatively unchanged, despite CBOT futures losses.

Key Takeaways:

  • Cash prices for corn and soybeans fell to 1-3 week lows, with spot soybean futures rising nearly 10 cents.
  • Domestic basis for corn and soybeans averaged almost completely unchanged, despite 1-5% losses in CBOT futures.
  • Spot wheat basis was stronger, with commercial bids increasing on higher protein wheat.
  • Cash-contracts of all US wheat futures closed almost 3-6 cents higher overnight, while corn/oat futures dropped another 3 cents.
  • Average elevator bids for US corn returned to April 21 lows, and farmgate soybean prices stood at the lowest point since April 7.
  • National cash price indices maintained by the Minneapolis Grain Exchange stood at $9.90 1/2 for soybeans, representing an average basis of -44 cents relative to yesterday's settlement of May CBOT futures.
  • Cash prices paid for US soybeans plunged nearly 75 cents since mid-month.
  • Analysts expect an attempt to shake off concerns over grain prices linked to swine flu, with crude and stock index values being closely watched.

Statistics:

  • 1-3 week lows for corn and soybean cash prices.
  • 10 cents rise in spot soybean futures.
  • 1-5% losses in CBOT futures.
  • 3-6 cents higher for cash-contracts of all US wheat futures.
  • 75 cents plunge in cash prices paid for US soybeans since midmonth.
  • $9.90 1/2 national cash price for soybeans (basis May CBOT futures).
  • -44 cents average basis for soybeans relative to yesterday's settlement of May CBOT futures.
  • $3.50 1/4 domestic cash price for corn (-22 cents basis May CBOT corn).
  • $5.13 1/2 hard red winter wheat (-51 cents basis KCBT May wheat).
  • $3.92 3/4 soft red winter wheat (-$1.15 basis CBOT May wheat).
  • $6.59 1/4 hard red spring wheat (+17 3/4 cents basis MGEX July wheat).

Sources:

  • Dow Jones Commodities News via Comtex.
  • Farm Futures analyst Bryce Knorr.
  • Country Hedging's John Helmstetter.
  • Early Market News analyst Duane Lowry.
  • Storm Exchange.
  • StormX.