Nixse
0

Coronavirus pandemic hits commodity prices

The coronavirus pandemic has plummeted commodity prices. Analysts don’t expect the price surge until the epidemic ends. Arlan Suderman, a chief commodities economist at INTL FCStone, said that when the coronavirus fear hit, speculators cashed all the commodities that were at risk. It was initially just a breakdown of the entire market. Even though everybody hasn’t felt the impact of coronavirus equally, it was still felt everywhere. 

Private agricultural industries started to consider how they could manage their products, during the massive, worldwide quarantines.  

Corn – commodity futures dropped

Corn has been hit particularly hard. Since people are traveling less these days, it has reduced the demand for ethanol, which is made from corn.

Suderman stated that ethanol plants are suspending activity. 

Grant Kimberley, manager of market development for the Iowa Soybean Association, said there’s a rumor that one-third of the ethanol industry would go offline. 

According to the Chicago Mercantile Exchange, corn futures fell at $3.33 per bushel from a high of $3.85 in March.

Iowa corn growers declare that their local plant for corn is an ethanol plant. Since there’s no purchase in the commodity, if they wanted to sell grain, they couldn’t go to their local plant. If the market remains like this, corn growers won’t be able to sell all their corn this fall. It generates a big problem because they don’t have sufficient containers to store all the grains.

Companies that produce bins for grains have haltered production as well. It puts the corn growers in desperate condition.

 

Wheat is seeing gains

Wheat is performing a little better than other commodities. Additionally, wheat futures climbed to $5.80 on March 25 from the low of $5 per bushel on March 17.

The news that some countries were stockpiling wheat caused the rise of wheat prices. The commodity sales are growing since people tend to eat more vegetables and grains at home, Suderman said. As people avoid restaurants, they put a higher demand for wheat and rice. It also signifies less demand for meat. Consequently, the meat industry is also sinking.

 

Meat prices declined

At the beginning of the coronavirus pandemic, meat prices soared. Russ Whitman, Urner Barry’s senior vice president, said that consumers flooded grocery stores to stock up on essential items such as toilet paper, chicken, and potatoes. Everybody ran to retail and filled up their freezers. People aren’t going out. Restaurants are closed. Hence, commodity prices are falling fast. Until Americans return to restaurants, all meat prices are likely to stay low, Whitman said. 

  • Support
  • Platform
  • Spread
  • Trading Instrument
Comments Rating 0 (0 reviews)


You might also like

Leave a Reply

User Review
  • Support
    Sending
  • Platform
    Sending
  • Spread
    Sending
  • Trading Instrument
    Sending