As with most regions, Washington is in the throes of Coronavirus reaction. Both House and Senate are scheduled to be in recess next week which will allow time to further assess the situation. Congressional offices are independently implementing their responses (based on advice from appropriate health officials) ranging from office telework, canceling face-to-face meetings and arranging telephone meetings, to “business-somewhat-as-usual” with heightened hygiene practices.  Today March 12, effective at 5 p.m., the House and Senate Sergeant at Arms have ordered limited access to the Capitol Complex. The limited access is anticipated to remain in effect until 8:00 a.m. April 1, 2020.

Last week the President signed the coronavirus funding bill providing $8.3 billion toward treating and preventing the spread of COVID-19. In comparison, Congress put $5.4 billion toward the Ebola response in 2014 and nearly $7 billion for H1N1 in 2009. Of course, each epidemic is unique and requires a tailored response. Today March 12, the House is expected to consider another multi-billion dollar supplemental bill HR 6201, Families First Coronavirus Response Act. The bill provides funding for various assistance programs to support the federal response to the coronavirus pandemic and assist workers facing economic hardship as a result of the virus. The Senate and White House have not yet announced their position on the proposal.

How has this affected Agriculture? In many ways, including agencies and groups changing meeting plans due to the outbreak. For instance, the Commodity Futures Trading Commission postponed their ag commodity futures conference, which was planned for April 1-2 in Overland Park, Kansas and is relocating back to D.C. their open meeting planned for Kansas City on March 31. Commodity groups, such as the American Soybean Association is canceling next week’s in-person board meetings and Hill visits in D.C. and the National Corn Growers Association is holding a scheduled board meeting next week via video conference. Commodity markets across the globe are also impacted by the spread of coronavirus and the ramifications it may have on the world economy. Reports indicate that volatility in outside markets is spilling over into commodities pushing ag markets lower. Meanwhile in the US, the CME Group announced it will close the Chicago trading floor after trade tomorrow to reduce the risk of the spread of the coronavirus. Thankfully in most markets, electronic trade already dominates, so this will have little impact on commodities trading. As another indication of the widespread effects of this virus, ocean freight charges have increased as much as $3000 per container to some markets, including Asian destinations. Exporters expect disruptions to last for a while.

The main uncertainty in the coronavirus outbreak in the United States now is how big it will get, and how fast. The Centers for Disease Control and Prevention’s Nancy Messonnier  told  reporters on March 9, “many people in the US will at some point, either this year or next, get exposed to this virus.”

Another week has passed in the rice market and while the news cycle is dominated by the coronavirus, rice has seen subtle movements in both new and old crop markets. Export sales for the week were up modestly over the previous report. Recall that this number is lagged by a week and any trade impacts following the presidential announcement this week will not be reflected until the next report. It is probable with all of the news, that exports will be impacted and as such it is worth paying extra attention to in the coming weeks. Exchange rates are also being significantly impacted which limits the buying power of overseas purchasers. These currency disparities will also play havoc in the export market in the months and weeks to come. 

Vessel loadings were up as compared to last week’s report as well. For similar reasons as sales, this number should be muted over the next report or few and is also worth watching to keep the pulse of the international trade. 

Benchmark Asian pricing has continued to appreciate on fundamental factors. The Thai drought has made its market and will remain an influence in prices of the near future. The other origins are buoyed both by the weather patterns as well as the reaction to the viral pandemic and appear to remain firmly bullish at this time. 

Domestically, very little has changed for old crop as there is virtually nothing left to trade. New crop continues to be planted across the South and growers remain very anxious as to what the new crop pricing holds in store. It is widely expected that there will be a large amount of acres planted in 2020 and with the uncertainty in the international marketplace, it is difficult for producers to make long term financial decisions in periods of such uncertainty. 

The futures market has and will continue to ride the financial roller coaster. At least the rice futures contracts are tentatively holding on to the underlying fundamentals at this time. Old crop contracts posted all of the gains for the week while new crop contracts noted the losses. Overall, the gains/losses for the week ranged from -0.8% to 0.91% across the open contracts on the board. This trading occurred on significantly higher average daily volume but lower open interest at Thursday’s close. 

The monthly WASDE was released by USDA this week. It noted no changes to the rice balance sheet from the February installment. The April report should be able to incorporate the March 31 planting intentions which will give the industry the first “official” peek into the 2020 projections. There should be notable adjustments at that time.