Demand and price for grains slide globally as coronavirus affects the industry. With 87,585 infections and 2989 deaths, fears of coronavirus adversely affect the grain markets.
Coronavirus Effect on Grains
US wheat futures saw the biggest monthly drop since July 2019. This is the biggest slide as the most active wheat contract on the Chicago Board of Trade dropped 5.1% for this month. As a result, Wheat came down by 0.3% at USD 5.26 a bushel. While most active soybean futures rose 2.5%, this month, after falling 9% in January, most active corn futures fell 3.5%. May milling wheat on Euronext in Europe stood at 88.50 Euros (USD 204.86) a tonne.
Further, the data by the U.S. Department of Agriculture confirmed that the exports for all three commodities were less than the lowest trade estimates. Grain exports globally down due to coronavirus.
Coronavirus Economic Effects
The falling Russian rouble has become a depressing factor for wheat as it is one of the top wheat suppliers. Jim Gerlach, president of A/C Trading stated that commodities are grabbed in the fear-based markets. Despite signing the Phase one trade agreement with the US, China is absent in any trade activity due to the pandemic. Phin Ziebell, an agribusiness economist at National Australia Bank stated that there is a lot of uncertainty in the grain market hence, it is difficult to make predictions.
Global Fears of Coronavirus
While Supply side of grains remain unaffected, the demand side, from the fear of the virus, is likely to be greatly affected. Paris-based consultancy Agritel stated that the fright will affect global growth adversely. Further, it stated that the most affected commodity will be wheat as funds are in a long net position on this commodity.
After sharp rise in infection globally including South Korea, Italy and Iran, agricultural markets are under pressure. Besides, several cases found in other Middle East nations have mounted the fear among people. Further, the US Centre for Disease Control and Prevention has alerted Americans to take precautionary measures. However, there are predictions for a good harvest in Ukraine due to sound weather conditions and thus keeping the prices in check.
In all, the epidemic has affected economic growth globally and specially on the global grain market.