Good Morning,
Markets are sharply lower this morning as they deal with spillover selling from crude oil that is off 10% and stock markets around the world that are under serious pressure.
The situation we are witnessing today seems to have no equal in oil market history. Crude oil crashed more than 30% after the breakup of the OPEC+ alliance triggered a dangerous all out price war as both Russia and Saudi Arabia vowed to flood the market with cheap oil. Crude futures are having to deal with their second largest decline on record in the opening seconds of trading in Asia, behind only the plunge during the Gulf War in 1991. The Saudi price cuts pressured prices to levels we haven’t seen since 2016.
The losses are not contained to Wall Street as markets from Europe to Asia posted losses of between 3 to over 6.5% as fund managers run for the exits as 16M people in northern Italy were put on mandatory quarantine in an effort to slow the spread of the COVID-19 virus across the region. The confirmed infections around the Globe virus has now topped 111,000 with deaths now approaching 3,900 worldwide. Cases in the US are pegged at 566 with 17 deaths attributed to the disease.
There are rumors that China did secure US Hard Red Spring wheat, DDGs and some sorghum, but the quantities are unknown. While a positive sign the purchases are not enough to alter the negative landscape across the markets caused by the COVID-19 outbreak. Worries are growing that we will see US Government intervention in effort to avoid clusters similar to what we are seeing in Italy where a third of the population is under quarantine as they try to slow the spread of the disease. Over 40 states have now confirmed cases of the COVID-19 virus and fears that the containment policies are beginning to fail.
Have a Safe Day!
Garry Gard
920-348-6844
ggard@didionmilling.com
