Corn: 2-4 lower
Beans: 6-7 lower
This morning the corn market is trading lower as the fear of the impact of the coronavirus continues to grow and with the Argentine harvest pace picking up and the resulting drop in export demand, it is hard to see how rallies in corn can amount to more than a few cents. Seasonally, corn tends to work higher into the spring, but the global impact on demand of the coronavirus may disrupt those seasonal trends - at least until the markets are assured that the disease has been controlled. The USDA is assuming some big increases in corn export demand for the upcoming marketing year, but we can’t help but wonder if the spread of the coronavirus will give the Chinese the excuse to hold off buying U.S. corn and allow them to wait and see if prices sink into the summer.
The soybean market rallied a bit yesterday on the news that Argentina would raise its soybean export taxes. The rally was limited by the expectations for the release of the EIA’s February Biodiesel Production report on Friday which is expected to show extremely low production rates due to poor margins, although margins have improved lately as soybean oil prices have broken down. This morning the soybean market is trading lower with markets overall seeing selling as the spread of the coronavirus begins to lower the trade’s expectation for the global demand for commodities around the world. Soybean traders along with traders in most other markets are trying to factor in the effect of the global spread of the coronavirus. There are other factors such as the rapid harvest of what looks like a record Brazilian soybean crop and few weather problems in Argentina.
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