Corn bean with transport

It’s difficult to talk about the markets — or just about anything else — without discussing the influence of the novel coronavirus. For the moment, it is the one thing that overshadows all else.

Karl Setzer, a grain analyst with AgriVisor, says COVID-19 and the cancellations and uncertainty that surround it have led to a market that is stuck in time. For the moment the economy is down and there are few sales opportunities. But it will pass, and it when it does farmers need to be ready.

“I can’t say the bleeding is over,” Setzer says.

But he adds that the market is already low, and it takes a tremendous amount of pressure to push a low market lower. With all that in mind, he says, the best move for many farmers would be to look at some acceptable price levels and lock in future sales if the market hits them when the panic over coronavirus passes.

And get ready for some gyrations in the market, he says.

“I think it’s going to be a pretty violent recovery when we do come back,” he says.

For the moment, the news includes the fact that many businesses, schools and public places are closing down, in many cases for weeks or even months. The Federal Reserve announced over the weekend that it would be cutting the U.S. interest rate to zero. That sparked a wave of panic selling in the equity markets and weighs on the commodity markets as well, Setzer says.

At the end of the month, the USDA will release its first prospective plantings report, as well as quarterly stocks data. The acreage numbers the USDA has mentioned so far this year are very high.

There is also still a question about how the virus and the economic reactions to it will impact trade over the coming months, Setzer says, and traders will be watching to see what economic help the government offers. So far the proposals put forward have not boosted markets or kept them from falling.

With all that in mind, Setzer is advising farmers to stay patient and be prepared for when the market does eventually rebound.

Gene Lucht is public affairs editor for Iowa Farmer Today, Missouri Farmer Today and Illinois Farmer Today.