Grains prices dragged down by crude oil crash

• Corn remained near 10-1/2 year lows hit on Monday as the slump in U.S. crude oil demand reflected in falling crude prices that are expected to reduce demand for corn-based ethanol.

HAMBURG: US corn, wheat and soybean prices fell on Tuesday as the grains sector came under pressure from the crash in crude oil prices to historic lows.

Corn remained near 10-1/2 year lows hit on Monday as the slump in U.S. crude oil demand reflected in falling crude prices that are expected to reduce demand for corn-based ethanol.

The Chicago Board of Trade's most active corn contract was down 1.4% at $3.18 a bushel by 1117 GMT, having hit its lowest since September 2009 at $3.13-1/2 on Monday.

Wheat fell 0.1% to $5.46-3/4 a bushel while soybeans  fell 0.9% to $8.28-3/4.

"The staggering fall of crude oil into negative territory is creating spillover weakness in corn, wheat and soybeans today," said Matt Ammermann, commodity risk manager at INTL FCStone.

"The coronavirus shutdowns mean crude oil demand has collapsed and oil storage is full. Crude oil could be taking a lead in showing the low demand for commodities following the coronavirus disruption to world economies."

U.S. oil futures again traded in negative territory on Tuesday after sinking by nearly $40 on Monday in their first ever dive below zero on growing concern that the sector will run out of storage for a glut caused by coronavirus lockdowns.

Global equities also fell on Tuesday as dismal company earnings reports underlined worries about the economic damage from the pandemic.

"Corn is especially weak, with reduced demand for corn-based ethanol expected," said INTL FCStone's Ammermann.

"At the current low price levels, markets are trying to create demand. The question is whether China will start to make its long-awaited purchases of U.S. grains and soybeans."

Analysts were also concerned about the impact of the coronavirus outbreak on meat producers, with Commonwealth Bank of Australia's Tobin Gorey pointing to shutdowns at processing plants in the United States.

Market attention had moved away from the usually closely watched U.S. Department of Agriculture (USDA) weekly report on crop conditions late on Monday.

The USDA said that U.S. farmers had planted 7% of their intended corn area as of Sunday, in line with analyst expectations in a Reuters poll.

The report also said that 57% of the U.S. winter wheat crop is in good-to-excellent condition, down from 62% last week.