The global coronavirus pandemic is not only a health issue, but also an economic one and it’s having an impact on the commodity markets, including soybeans. But the soybean market isn’t sure how to react.

“The soybean market is a little bit different dynamic than corn,” said Frayne Olson, grain marketing economist at North Dakota State University. He explained that corn is hurting a bit because low crude oil and gasoline prices are causing some ethanol plants to shut down or “hot idle,” thus reducing the demand for corn.

“Psychologically, there’s still a lot of downward pressure in soybeans. Some of that is a spillover from corn and some of it is the concern about the demand base for soybean meal into the livestock sector, because a corn/soybean meal ration is a really simple, very effective ration for a lot of species, including dairy, beef, hogs and poultry,” he said.

“That’s why the soybean market has got a little bit more of a split personality. It’s really not sure what to do,” he added. “It’s looking at corn and what’s happening in the general economy and it’s saying, ‘Boy, this is not good.’ But yet, we get these little sparks of interest.”

In explaining the situation, Olson said that typically 45 percent of U.S. soybeans are exported and 45-50 percent is crushed domestically and the rest is seed and other products.

“It’s a little simpler because we either crush it into oil or meal or we send it on a vessel someplace and export it,” he said.

Seasonally, Olson said U.S. soybean exports tend to be very slow at this time and they continue to be very slow, but that’s normal for this time of year. One reason for that is South American production and exports. Brazil and Argentina both have very strong yields this year.

“There’s plenty of soybeans around and the Chinese have been buying pretty aggressively from Brazil,” he said.

Olson noted there have been some supply shipping disruptions out of both Argentina and Brazil because of the COVID-19 virus. Dock workers there are concerned about getting sick or have become sick causing a labor shortage.

“In both Brazil and Argentina most of the corn and soybeans that come into their port system are brought in by truck, so there gets to be a lot more person-to-person contact,” he said. “In the U.S. we send most of our corn and soybeans to export either by barge or by rail. That’s a lot easier to keep the social distancing in our system versus what they do in Brazil and Argentina.”

There were also some very heavy rains in Brazil lately, so some vessels got delayed in loading.

“There have been a few shipping disruptions out of South America, but right now they’re not large enough for China and other international buyers to make emergency purchases from the U.S. yet,” Olson said.

“The market is waiting for that Chinese buying to start and that will likely not begin until mid- to late-summer,” he continued. “I think it may be some time in August before they start buying out of the U.S.”

On the crushing side for oil and meal, profit margins for the oil seed crushes have been pretty strong, at least up until recently, according to Olson.

“Meal demand, both domestically and internationally, has been pretty strong. As ethanol plants are shutting down or cutting production, the supply of DDGs (dried distiller’s grains) is also starting to fill up and that tends to be higher protein and higher energy than pure or standard corn,” he said. “As DDG supplies are cut the livestock folks are switching back to a soybean meal ration, which means soybean meal usage is up a little bit just because the feed rations are shifting.”

On the soybean oil side, he explained that about 30 percent of U.S. soybean oil goes into biodiesel. He pointed out that diesel usage has not dropped, and in fact, it has changed very little. But gasoline usage has dropped significantly and so the demand base for biodiesel has really not changed much, which is a positive thing.

“One of the by-products or co-products out of the ethanol business is corn oil because the ethanol plant takes the DDGs and spins out the corn oil and sells that as a vegetable oil, which competes with soybean oil,” he explained. “So as our ethanol production has dropped those corn oil supplies have been cut and soybean oil is an alternative for that.”

On the global stage, Olson also noted there are several large palm oil plantations in Malaysia that have been closed due to the coronavirus, which has affected the workers who are trying to harvest the palm oil. As a result, palm oil production has also been cut.

“Palm oil is usually a cheaper vegetable oil than soybean oil on the world market, but because palm oil supplies have now become tighter the soybean oil market is saying, ‘Well, maybe there is some potential to pick up a few more exports than we’ve seen lately,’ but we haven’t seen a lot of that yet,” he said. “But, again, the market is looking for it and hoping for that to come.”

Olson pointed out the soybean market is being pulled in two different directions.

“One of them is there are some opportunities as some of these shifts adjust and our system tries to compensate for all of the new rules we’re in with restaurants and everything being closed,” he said. “But on the flip side, we have a lot of soybeans from last year and our export pace has not been fantastic. We’re going into this seasonally and when we don’t have a lot of new news. Part of it is we’ve just been beat up psychologically on the soybean side.”

Olson offered the same recommendations to soybean farmers as he did to corn farmers, and that’s to check your bins and make sure that they’re in good condition and that there aren’t any kind of heating problems or any quality problems starting to show up.

“Right now I wouldn’t recommend making any sales. Now, there are some farmers that may have to sell something contractual, but now is just not a good time,” he said.

Looking at local prices, at one local elevator in west central Minnesota regularly followed in this column, as of April 15, the April cash price for soybeans was $7.85 per bushel and basis was -60 cents under. The September futures price was listed at $8.64 and basis was -.01 cents under.