US grain futures are weaker in early US pre-market trading Thursday. Corn is around 1 cent lower, soybeans around 3 cents down and wheat is around 5 cents lower.
Trading activity in the grain markets is likely to pick up Thursday, as the annual USDA Ag Outlook conference gets under way, including the latest agency forecasts for US and global supply and demand for grains. And on Friday the weekly USDA export sales report will be released—one day later this week because of the US holiday on Monday. Grain market bulls want to see more Chinese activity in the weekly US export sales data.
The coronavirus outbreak remains on or close to the front burner of the global marketplace, and today the concerns seem a bit greater. That’s a daily negative for the grain markets. China’s central bank cut its one-year loan prime rate to 4.05% from 4.15% and the five-year loan rate to 4.75% from 4.80%. The move was not surprising and is an effort to keep the world’s second-largest economy afloat as the negative impact of the covid-19 outbreak is growing. China’s manufacturers are running out of needed materials and some have shut their doors.
There is now talk that with supply shortages of some commodities in China, those commodity prices could actually rise on the world market due to hoarding and China’s manufacturers scrambling to procure those commodities. Such talk is ironic given the coronavirus has worked to crimp global economic growth, including pushing several raw commodity prices lower, including grains, on expectations for reduced demand for them.
The US Federal Reserve said in its FOMC meeting minutes released Wednesday afternoon that it is closely monitoring the economic impact of the coronavirus outbreak.