US corn futures dropped to their lowest level in about 3-1/2 years on Wednesday as weekly ethanol output set a record low, reflecting weak demand for the crop.
Soybean and wheat futures also eased at the Chicago Board of Trade.
Demand for corn-based ethanol has suffered as US stay-at-home orders to prevent the spread of the new coronavirus have kept cars off the roads. Weekly ethanol output fell 102,000 barrels per day to 570,000 barrels.
The decline hits as the US Department of Agriculture is projecting that farmers will plant a massive crop this spring, which could lead to burdensome supplies, according to analysts. More than a third of the US corn crop is used to make ethanol biofuel.
"With poor prospects for the demand for corn to produce ethanol and the grim global economic situation, it pretty much leaves supply disruptions to give corn much hope for a rally," said Tomm Pfitzenmaier, analyst for Summit Commodity Brokerage.
Chicago Board of Trade May corn was down 1.4% at $3.21-1/2 a bushel and set a contract low. It reached the lowest price for a front-month contract since Sept. 2016. July corn was down 1.1% at $3.28-3/4 a bushel and set a contract low.
The nearby wheat contract on the CBOT was down 1.8% at $5.38-3/4 a bushel, falling for a third straight session on strong global crop prospects and technical selling. The contract extended losses after breaking below key technical points at $5.45-3/4 and $5.40. The next support was estimated at $5.34-1/4.
CBOT soyabeans were flat, after dropping to their lowest since March 19 at $8.38-3/4 earlier in the day.
The risk of disruption to meat production in the United States from the spread of the coronavirus continued to hang over the market. Several US meat processing plants implemented temporary closures last week after workers contracted the virus, prompting fears of a knock-on effect on demand for soyameal widely used in feeding livestock.
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