Grain elevator

More than 56% of respondents to a farmdoc daily poll said they expect COVID-19 will have an impact on agriculture markets for up to a year.

The poll took place during a webinar conducted March 20, and farmdoc contributor and University of Illinois professor of agricultural commodity markets Todd Hubbs said he agrees.

“I’d like it to be two months or even shorter if possible,” Hubbs said. “That doesn’t look like it’s in the cards for us this year.”

During the webinar, he stressed the importance of the U.S. keeping its supply chain in place during the pandemic. He said having a stable supply chain compared to some competitor countries, such as Brazil and Argentina, could be a boost as other countries such as China begin to emerge from the effects of COVID-19.

“(China) is well behind what they said they were going to buy in 2020, but I still think they will buy a significant amount of agricultural products as we move through the rest of the year,” he said. “If there are issues in places like South America, that will benefit us if we can keep our supply chains in place.”

Planting has now entered the forefront, with the planting intentions report due to be released March 31. That report often sets the tone for the commodity markets for the growing season.

However, despite the extreme volatility in the markets due to coronavirus, Hubbs said it’s too early to think about shifting any acreage in the hopes of chasing a profit.

He said corn has a few challenges ahead when it comes to demand. Gas consumption is seeing a downturn as more and more states enter shutdowns, hurting ethanol markets and basis prices. Hubbs also said the corn export pace needs to continue expanding.

“If you are marketing old-crop corn, I’m in a wait-and-see mode,” he said. “If we can pull out of this in May and June, we may be able to see prices come back a bit. I’m not expecting a miracle.”

Soybean crush continues to be impressive, and Hubbs said he expects China to make good on much of its commitment for soy purchases moving forward.

“I don’t want to seem too optimistic, but I don’t think it’s all gloom-and-doom,” Hubbs said. “If we can get through this in a timely manner — and maybe hold your marketing for a little bit — you can see how this plays out.”