Corn Tumbles Most in a Year, Pacing Slump in Crop Commodities

Source: By Kim Chipman, Bloomberg • Posted: Thursday, October 29, 2020

Corn futures tumbled the most in a year, pacing a slump in agriculture markets, as escalating coronavirus concerns drove commodities and equities lower.

The S&P 500 Index fell 3.5%, the biggest drop since June, amid a surge in Covid-19 hospitalizations, especially in the Midwest. German Chancellor Angela Merkel reached a deal for a one-month partial lockdown to curb the spread of the virus, and France imposed new nationwide measures.

“Today’s Covid-related sell-off pulled the rug out from beneath all of these markets today, leaving little ability for corn prices to hold,” said Arlan Suderman, chief commodities economist at StoneX. “Momentum-trading algos then amplified the move to the downside.”

Futures drop, open interest climbs to highest since August 2019

On Tuesday, corn reached the highest since August 2018, and hedge funds last week boosted bullish bets to a two-year high. On Wednesday, a Bloomberg gauge of grain and soybeans fell 2.3%, the most in five weeks.

“Everything on the screen is red,” Rich Nelson, chief strategist at Allendale Inc. said in a phone interview.

  • Corn futures for December delivery slumped 3.5% to close at $4.015 a bushel on the Chicago Board of Trade, the biggest drop a most-active contract since Oct. 10, 2019.
  • Soybean futures for January delivery fell 2% to $10.5475 a bushel, the biggest decline since Oct. 12.
  • Wheat futures for December delivery shed 1.1% to $6.0875 a bushel. The grain eased for the third straight day, the longest slump since Sept. 9.
  • On ICE Futures U.S. in New York, cotton for December delivery tumbled 2.6% to 70.17 cents a pound, the biggest decline since Aug. 7. Earlier, the price reached 72.6 cents, the highest since May 2019.