The day is off to a very rough start after President Trump spoke in a prime-time address from the Oval Office, announcing sweeping new restrictions on travel from Europe and scattered executive actions to help workers and businesses rocked by what he labeled a “foreign virus.” The situation is evolving so quickly that even he misspoke when he was “suspending all travel” from Europe and suggested they would also apply to trade. The President later tweeted that trade wouldn’t be affected and the Department of Homeland Security clarified that the restriction applies generally to foreigners who’ve been in Europe within 14 days.
Unfortunately, grain and soy markets are following equity markets lower over worries that all of this turmoil surrounding this virus will slow the world Ag trade. South America continues to be an aggressive seller with Argentine corn offered about $0.18 under the US for April, but $0.41 under for July. Soymeal out of Brazil is being offered $25 less than shipments originating out of the Gulf. Adding further pressure are Russian wheat values that have fallen to new seasonal lows.
There is no way of knowing where or when this will end. Risk appetite has disappeared, dramatic (panic) action is being taken against Covid-19 creating panic and the impact on jobs and the world economy cannot be estimated – but it won’t be favorable. The virus will get worse before getting better. It will end sooner than later. People will eat. Grains will be sold. Grain will be moved. Crops will get planted. Animals will be fed. Foods will be made and consumers will continue to buy.
Producers that need cash flow in the next couple weeks should pull the trigger now and make the sales as there doesn’t appear to be an upside on the horizon. Producers that have grain in storage and are financially stable should still be moving grain to maintain quality in bins. Give us a call to find out what options we have for cash and deferred pricing of corn.
Have a Safe Day!