Crop prices down on Monday

Crop prices down on Monday
Apr 27, 2020

The second half of the year should be better than the first half, a commodity analyst said

By Diego Flammini
Staff Writer

Crop prices got off to a slow start as corn, soybeans and wheat were all down Monday morning.

The Chicago Board of Trade had wheat at US$5.32 per bushel, corn at US$3.22 per bushel and soybeans at US$8.38 per bushel.

As of 12:30 p.m. ET Monday afternoon, corn and wheat prices dropped further to US$5.25 and US$3.14 per bushel respectively. Soybean prices inched higher to US$8.40 per bushel.

Some economies around the world are starting to reopen or unveil plans to reopen. But it may take a discovery from the medical community to start a price rally, said Abhinesh Gopal, head of commodity research with Risk Management.

“The lack of a medical breakthrough and the fear of a long-drawn tussle with the virus continues to weigh on markets,” he said. “That would bring confidence back to the marketplace as a whole for grains.”

Crop prices could increase once large economies reopen for business.

China has been buying U.S. grains, and that trend will need to continue, Gopal said.

“Exports and demand will need to pick up,” he said. “Recent Chinese buying is a silver lining, but we will need to see much more of that. Crop prices could also find support when economies open as we should gradually be going back to trading crop fundamentals.”

Weather could also play a part in any potential price rally.

“Normally we get a seasonal high during early summer on account of cropping weather uncertainties,” Gopal said. “Dry cropping conditions will give grain prices a pop.”

Cash croppers may be rewarded for patience this year.

Prices may not reach the levels of the past few years, but the latter half of 2020 should bring good opportunities, Gopal said.

“As we work towards a ‘new normal,’ we should see improved crop prices versus what we saw during the early part of the year,” he said. “We are not in a position to expect the highs of the last few years, but the second half of 2020 should be better than the first half.”

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