Markets are mostly higher as fears that US processing plants could close due to infections of the COVID-19 virus continues to rise. The infections could prove challenging as workers and truck drivers who potentially have contracted the disease cause a reduction in processing capacity. Most millers/processors have contingency plans they can put into place to keep plants running; however, many questions remain as to just how world supply chains and logistics will handle this situation as the spread of the virus continues to quicken.
Corn continues to struggle as the fall in crude oil prices weighs on ethanol demand. Besides the price war between the Russians and the Saudis, US ethanol will struggle with reduced domestic demand as American shelter in place and curtail their gasoline demand.
Beans are seeing strength after Chinese soy meal futures closed up the limit due to the tight supplies as livestock producers there restock their feed needs. Prices there are getting a boost from the policy that any vessel offloading soybeans must clear a 14-day quarantine in an effort to fight the spread of COVID-19. That’s not to say it all will come from the US as some 11 MMT of beans are in transit from Brazil and will arrive in the weeks ahead. Nevertheless, the restocking of the Chinese pipeline will be an important feature in any recovery in prices heading into planting season here in the US.
Have a Safe Day!