Wheat slumps nearly 2pc as China virus fears grow; soybeans, corn fall

• Soybeans dropped about half a percent to their lowest in more than six weeks.
• Corn gave up 1pc to $3.83-1/2 a bushel and soybeans fell 0.6pc to 8.96-1/4 a bushel.
• Weekly US wheat sales were 741,900 tonnes, near the high end of estimates for 300,000 to 800,000 tonnes.

SINGAPORE: Chicago wheat slid nearly 2pc on Monday to its weakest in more than a week while corn fell 1pc as rising concerns over the spread of a virus outbreak in China and its potential economic fallout triggered broad-based selling.

Soybeans dropped about half a percent to their lowest in more than six weeks.

Stocks tumbled as investors grew increasingly anxious about the economic impact of the new coronavirus outbreak, with demand spiking for safe-haven assets such as the Japanese yen and Treasury notes.

"The outbreak is pretty serious, it is dragging down stock and commodity markets, including agriculture products," said Ole Houe, director of advisory services at brokerage IKON Commodities in Sydney.

"The virus may spread a lot faster than anyone thinks as it is Chinese New Year period, a lot of people are travelling."

The most-active Chicago Board of Trade wheat contract lost 1.8pc to $5.63-1/4 a bushel by 0326 GMT after falling earlier in the session to $5.61 a bushel, the lowest since Jan. 16.

Corn gave up 1pc to $3.83-1/2 a bushel and soybeans fell 0.6pc to 8.96-1/4 a bushel, having dropped to its lowest since Dec. 12 at $8.95 a bushel earlier in the day.

The death toll from the new coronavirus in China grew to 80 on Monday as residents of Hubei province, where the disease originated, were banned from entering Hong Kong amid global efforts to halt the rapid spread of the outbreak.

The number of deaths from the flu-like virus in Hubei province climbed from 56 to 76 overnight, health commission officials said, with four deaths elsewhere. The total number of confirmed cases in China had risen about 30pc to 2,744.

The virus is expected to dent growth in China, the world's top importer of soybeans and other agricultural products, after months of economic worries over trade tensions with the United States.

Traders and farmers continued to wait for signs of increased Chinese buying of US farm goods after Beijing pledged to significantly increase imports in an initial trade deal the countries signed earlier this month. The agreement is meant to reduce tensions after nearly two years of a tit-for-tat tariff war.

Brazil, a rival soybean supplier, is expected to harvest a massive crop, providing stiff competition for sales to China.

The US Department of Agriculture (USDA) reported total export sales of US soybeans in the week ended Jan. 16 were 910,700 tonnes, in line with trade expectations for 700,000 to 1.3 million tonnes.

Weekly US wheat sales were 741,900 tonnes, near the high end of estimates for 300,000 to 800,000 tonnes, while corn sales reached 1 million tonnes, within expectations of 700,000 to 1.2 million tonnes.

The USDA separately said private exporters sold 142,428 tonnes of US corn to unknown destinations, the second announcement in as many days.