Coronavirus causing grain and oilseed market jitters

31-Jan-2020 - Last updated on 31-Jan-2020 at 16:55 GMT

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In a grains and oilseeds markets update today, the AHDB in the UK reported that Chinese imports of US soybeans surged, throughout December, when compared to levels in the comparative period a year ago.

The imports are on the back of the easing trade war, it commented.

“We could see this continue, following the agreement of a phase-1 trade deal between the US and China in January. However, continued demand from China is under question as the outbreak of coronavirus continues. Furthermore, despite the recent rise in China’s pig inventories, the herd is still significantly reduced, capping demand,” said the analysts.

French grain and oilseeds market analysts, Agritel, noted, though, that Chicago prices had dipped amid fears of the spread of the coronavirus and also amid fears that China will not honor its promises under the deal signed with the US.

Russia, Ukraine markets

Looking elsewhere, the AHDB noted, citing Russia's Institute for Agricultural Market Studies, (IKAR), that Russian wheat production for 2020/21 could reach 79.5Mt after a record winter wheat planted area.

“However, weather will be a key watch point in determining yields.”

Agritel, looking at developments in Ukraine, reported that, during the month of January, that country was able to load at a rapid pace, reaching a cumulative total of 16 Mt of wheat exported since the beginning of the season, 3.85 Mt of barley and more than 13.6 Mt of corn. Compared to last season, Ukraine is 4.2 Mt ahead in wheat, +0.5 Mt in barley and +3.6 Mt in corn, it confirmed.

“Even if it has slightly decreased, the rate of corn loading remains high with more than one Panamax [ship] leaving the country every two days. The good weather conditions have facilitated the logistical operations.”

Impact of French strikes

Meanwhile, European wheat prices dipped on Wednesday as traders assessed the impact of the China coronavirus outbreak on the global economy and continued pressure from a French port strike that has slowed exports, according to a Reuters report.

France’s CGT union had called on dockers to strike for 24 hours on Wednesday. The strike was not extended, said sources at the main grain export hubs of Rouen and La Pallice, said Reuters.