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No doubt, February 2020 will go down as a month to remember for just about every market sector. Or maybe one that many would rather forget.  It began under a cloud of uncertainty pertaining to the outbreak of the coronavirus in China and is now about to end after suffering through a panic type, “get me out at any price” washout into the end.  In the middle, we also experienced the disappointment of a new U.S./Chinese trade deal taking effect, but little to no new business to show for it.  All that said, you might be surprised to see just how severe the monthly losses were.  If we were to wrap it up this morning, for the month spot corn would be 18-cents lower, wheat down 28-cents and spot beans, believe it or not, are up a 5-cents for the month.  I suspect that many of you would have suspected something far worse.  If you were thinking about the equity markets, well, that is a different story.  As it stands this morning, the S&P 500 is down 290 points, the Dow Industrials 2,750 points, and both poised to record the lowest close since May of last year.  While I have no insight as to if the spread of Covid-19 has peaked or not, although there have been encouraging numbers posted as of late, but I for one believe that as we transition now into the month of March, we shall also see markets, particularly grain and soy markets stabilize and should even begin to see some growing risk premium built back into the price level.  We have all heard the folklore that says March comes in like a lion and goes out like a lamb.  Possibly this year, we will be able to look back and say it came in like a bear and went out like a bull.

It would not appear that we are going to receive any price positive assistance from the International Grains Council, as in their monthly update, they bumped 2020/21 world acreage numbers higher.  They are projecting a record 769 MMT of wheat product this coming year, via a 2% increase in global acreage, they expect corn acreage to increase 1%, primarily from the United States and total bean acres to grown 4%.  As we learned a year ago, of course, all of this assumes we have a “normal” season.

The news is not all bad, though.  While still unconfirmed, yesterday Bloomberg News reported that the Trump administration had decided to cut back on the number of exemptions that would be granted to small refiners this coming year and the semi-official word from the EPA is that they are unsure of how they intend to respond to the ruling by the court of appeals that has already told them they needed to reconsider the exemptions already given.  While this seems to smell like election-year posturing, the biofuel industry will happily take it.

There was a bit of news from China that is worth noting.  Reports from the top container ports say that the backlog of cargo waiting to move is loosening.  This would seem to suggest not only that they have moved beyond peak virus issues but should indicate that demand could soon pick up as well.