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Weekly market review

By Staff | Mar 6, 2020

Coronavirus continues to be a focus of the markets, with the news over the weekend of the virus spreading to new countries. New cases were found in South Korea, Italy, Iran, Austria, Croatia and Switzerland, which amount to over 80,000 confirmed cases so far worldwide. This took the long-term risk to a new level with coronavirus moving rapidly outside of China. The spread of the disease continues to impact travel through many countries as travel bans are being placed, which in turn has effected the transportation of products or services to several areas of the world. The CDC released a statement that the U.S. should prepare for coronavirus and the likelihood the disease will spread throughout more of the country. The markets will continue to watch the how quickly the disease continues to spread and if the end is coming into sight.

Transportation is starting to gain concern in relation to the spread of coronavirus. The largest gateway in the U.S. for seaborne imports from China are projecting container volumes for this month to drop 25% due to the spread of the disease. The Port of Los Angeles Executive Director stated 40 sailings between February 11th and April 1st, mainly vessels from China, have been canceled by container ship operators. This equals close to a quarter of the total container ships or around 176,000 fewer containers that normally came to port during last February. The world’s largest containership operator canceled more than 50 sailings since late January from China to various areas of the world.

Market news has been sparse as we get closer to March and the great acreage debate begins prior to the March 31st planted acreage report. The latest private estimate released has corn acres at 96.6 million acres and 80.6 million acres of soybeans. Effects on balance sheets and ending stocks will be heavily debated for weeks to come as acreage estimates continue.

Export sales for the week were released with corn exports being reported at 34 million bushels which was within market expectations but down from last week. Corn exports have improved recently but still significantly lagging the pace needs to meet yearly USDA projections. Soybean exports were significantly lower than market expectations this week, coming in at 12.47 million bushels. Soybean exports are currently ahead last year’s as well as the USDA’s projections but are slowing as soybean harvest continues in South America.

Soybeans also benefitted from news that Argentina’s President Fernandez is looking to raise their export soybean tax from 30 to 33%. That fact that their export registrations have been suspended confirms that changes are likely going to take place. Analysts believe the government suspended the registry to avoid farmer selling ahead of the tax increase. In late December, Argentine officials increased export taxes for corn, soybeans, and wheat. Sources state that increases in corn and wheat duties are not expected.

For more information, you may contact Adam Suntken at (712)-454-1061, or e-mail at asuntken@maxyieldcooperative.com. The opinions and views expressed in this commentary are solely those of Adam Suntken. Data used in writing this commentary obtained from various sources believed to be accurate. This commentary is intended for informational purposes only and is not intended for developing specific commodity trading strategies. Any and all risk involved with commodity trading should be determined before establishing a futures position. Please visit our Risk Disclosure Page for more information on commodity trading.

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