While the ongoing coronavirus pandemic continues to wreak havoc on the various commodity markets, planting progress for 2020 soybeans in the region is moving along smoothly so far, giving producers hope for a good crop this year.

“Soybeans are down. Let’s not kid ourselves, it’s not a pretty site,” said Ed Usset, professor emeritus and grain marketing economist with the University of Minnesota, adding that November new crop beans had been up to $9.80 at the start of the year, and as of April 27, were at $8.40.

“Good grief! That’s a big move down, but it’s not as bad as corn, not as bad as hogs, not as bad as milk,” he said. “It’s certainly not a record low, given where we’ve been over the last couple of years with the trade war. But it’s a tough go.”

At one local elevator in west central Minnesota regularly followed in this column, as of April 27, the May cash price for soybeans was $7.68 and basis was -60 cents under. September 2020 futures price was listed at $8.41 and basis was 0.

“These are the worst prices we’ve seen in a while, but we have seen worse. That’s thin praise, but we have seen worse,” he added.

Usset pointed out that there’s a real problem on the demand side, especially in regards to the trade deal signed with China earlier this year. With the signing of the agreement, producers expected it would bring some relief in the form of increased trade with the Chinese after losing market share over the past two years. However, with the onset of the coronavirus and how it has impacted everyday life decisions, those purchases are not taking place at the pace expected when the deal was signed.

“If you look at the trade scenario ... I can’t even talk about it,” Usset said. “The kind of trade we’ve talked about with China, it’s not going to happen. The numbers that were put on paper are not going to happen this year. I just don’t see how it can.

“We’re not seeing the numbers. We’re already a third of the way through 2020 and we’re not on pace to do anything like that,” he added. “Coronavirus, it’s a handy excuse there, and it’s real.”

Adding to the trade issue is the fact that South American currencies are “in the tank” relative to the U.S. dollar. In fact, Brazilian currencies closed the previous week (ending April 24) at an all-time low versus the U.S. dollar, according to Usset.

“That’s good for Brazil exports, and not good for U.S. exports,” he said. “That same issue is going on with Argentina, so the export side of things has a lot of stiff winds against it.”

On the domestic side, soybean crush has been good and has been a good story for a long time, according to Usset.

That said, crush demand is much about selling soybean meal to the livestock industry, which is dealing with its own issues regarding the coronavirus. In the past couple weeks, there has been news of meat processing plants having to close temporarily due to an influx of COVID-19 cases among workers at the plants. With the hog market interrupted due to the plant closures, and with public demand lessened because of restaurant and school closures among other factors, some hog farms have had to prematurely kill off some of their hogs.

“This is something else in the world of hogs,” Usset said. “We were upset when we saw milk being poured out on the ground. Hell, that’s nothing compared to killing hogs because you don’t have a market for them and to the extent that that happens doesn’t speak well.

“The meal demand (is down), and with restaurants closing and remaining closed, that doesn’t speak well for oil demand. We’ve got to keep an eye on the crush side of things, which so far has held up,” he added.

The one good or positive thing for soybean producers is that planting season is getting underway in a seamless, smooth manner. To the extent that planting season is a time of renewal and represents a fresh start, Usset said that’s a good thing for producers.

Amid all this news Usset tried to find at least a sliver of a silver lining.

“I guess we can thank God that we’re not hitting these low prices and harvest is two weeks away,” he said. “The demand side is not going to make anything happen, or at least not for a bit, but who knows on the supply side. Thankfully we’ve got a little time.”

On the marketing side of things, Usset said he was not recommending producers make any aggressive sales at this time with prices so depressed.

“I’m not sure what is going to make things turn around, but this thing is collapsing pretty badly,” he said. “Hopefully, people had last year’s crop, for the most part, taken care of and they’re not sitting with too much in the bins. The numbers indicate otherwise, but I like to think a lot of people got something moved.

“On the new crop front, it’s a tough one. I’m suggesting we have to wait to make new crop pricing decisions. But what I’m waiting for, I’m not sure,” he concluded.