Agri Commodity Markets Monthly January 2020: Deal Signed but Virus Brings Panic
Emerging in the heady wake of the trade deal phase 1 signing, the Coronavirus currently spreading through China (and abroad) during peak consumption period has firmly acquired the market narrative. The consequent drop in crude oil – Brent went from USD 69/bbl in early January to USD 59/bbl currently – triggered an even more impressive sell-off in vegetable oils and halted the enthusiam in the ethanol complex, affecting sugar prices too. The downward pressure seems exaggerated for others, like coffee (which lost 21% so far in 2020), as China is not a large market. The focus of the market will eventually move toward Chinese procurement of US agricultural goods within the phase 1 deal.