The coronavirus epidemic in China has adversely affected soybean prices. International Soybean price and demand drop on weak China imports.
Drop in Soybean Demand and Prices
Major cities of China are under a lock for over 20 days. This has declined the demand for various products, resulting in an international price decrease. Chicago Soybean saw a decrease in price in three out of four sessions due to declining demand from China. Also, Soybean contracts saw declining trend as one on the contracts on Chicago board of trade decreased by 0.1%.
However, wheat prices saw a little change and closed at USD 5.62-1/2 a bushel, highest since January 29. This was due to decreased global supply after drought contributed to lower wheat production in Australia. The prices of corn rose by 0.2% and stood at t USD 3.78-1/2 a bushel. Also, the US dollar climbing to a three-year high against other currencies added to the increased prices and a decrease in exports.
With 2663 people dead and, 77,658 people infected, China is struggling to revive from the effects of coronavirus. The projections of China scaling up agricultural produce imports from United States are clouded by the virus spread. However, analysts predict that United States Department of Agriculture would peg 2020 corn plantings at 93.6 million acres. This is 4.9 million acres more than the previous year forecast.
Further, there are expectations for Soybean plantations going up from 76.1 million to 84.6 million acres in 2020. Besides, farm weather experts have revealed their concern over soybean production. They stated that despite rainfall in Argentine soy growing areas, crop losses will have a limited impact on national production.
Wheat prices in Paris-based Euronext rose 0.1% to 193.50 Euros a tonne. The price decline is due to a potential decrease in production this year. Grain trade lobby Coceral projects soft wheat production in the EU to fall to 137.9 million tonnes in 2020 from 145.7 million tonnes of last year.
In conclusion, the coronavirus spread has negatively affected global trade including soybean.