Grain traders are spooked to start the trading week, as over the weekend the coronavirus illness that apparently originated in China has rapidly spread, killing at least 80 of its citizens, with nearly 8,500 cases now reported in China. Several Chinese cities are under quarantine. Several cases are now reported in the US as doctors are now saying the illness is more easily contractable. There are increasing worries the outbreak could hurt world global demand for grains, including possibly impacting the recently signed partial trade agreement between the US and China that included China buying much more U`S agricultural products. Look for buying interest in the grain futures markets to continue to be squelched until this situation stabilizes, which could be a while.

However, veteran traders know that “market shocks” such as this tend to see futures prices over-react and then recover at some point—providing value-buying opportunities at lower price levels. The key is timing when the markets bottom out, which is a very difficult endeavour.

Traders will closely examine Monday’s weekly USDA export inspections report. The latest CFTC commitments of traders report out Friday afternoon shows the big speculative “funds” net position short 67,804 corn futures contracts, short 13,735 soybean futures contracts, and long 41,671 wheat futures contracts.