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Food demand sends crop prices up

Food demand sends crop prices up

Corn, soybeans and wheat prices showed gains Friday morning

By Diego Flammini
Staff Writer
Farms.com

Cash crop prices increased Friday morning as consumers purchase more food for self-isolation during the COVID-19 pandemic.

May futures for corn, soybeans and wheat were all up by 10, eight and 11 cents per bushel, respectively, as of 10:30 a.m. ET Friday. Cattle futures were also close to being limit up.

Macro markets like the Dow Jones are showing some signs of stable activity, which is affecting the ag commodity markets, said Abhinesh Gopal, a commodity analyst with Farms.com Risk Management.

“There seem to be a few positive influences,” he said. “Much of the world is staying at home, leading to more immediate demand for food. Wheat gets a direct boost due to strong demand for pasta and baked goods.”

Another factor contributing to the Friday rally is a boost in export interest for U.S. grains.

Previous drops in crop prices paired with purchases from China are supporting the markets, Gopal said.

“The USDA reported 340,000 metric tons (MT) of hard red winter wheat sold to China this morning,” he said. “Exports are boosting corn as well, as the USDA confirmed the Chinese bought 756,000 MT of U.S. old-crop corn.”

The U.S. dollar is performing well. But that could have an adverse effect on exports because they become more expensive.

Gopal warned, however, that the prices could drop again if the coronavirus continues to spread.

“It’s entirely possible and true for all markets,” he said. “The markets will be run by fear and uncertainty, especially when fear affects macro markets and they sell off. We are still a ways away from being out of the woods yet.”

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