Grain markets are poised to start Wednesday’s session mixed in subdued trade following recent volatility. Soybeans were slightly higher, up a penny, while corn was mostly flat and wheat mixed, with spring wheat firmer and winter wheat a touch softer.

Equity markets got slammed both Monday and Tuesday as concerns over the COVID-19 (coronavirus) rattled investor confidence. Even as the outbreak appears to be subsiding in China, new outbreaks have popped up in various other countries, triggering fears of a chain reaction of economic slowdown.

What does all of this have to do with grain markets? For one, the entire commodity space as an asset class has been under pressure in USD-denominated terms as the value of the greenback has increased relative to other global currencies, including major competitor currencies in global grain trade. The USD continues to be a safe haven for global investors in times of uncertainty. Cash is king… Historic strength in the USD continues to be a major long term structural headwind pressuring US grain export demand. Secondly, the COVID-19 outbreak has dampened market confidence in China’s ability to implement timely purchases of US agricultural goods as promised in the Phase 1 agreement signed in January. The administration remains publicly optimistic, however. US Trade Representative Robert Lighthizer was in the news yesterday saying the agreement will be “strictly enforced for the benefit of our workers, farmers, ranchers and businesses.” Price action since the January 15th Phase 1 signing is clear evidence of market pessimism on China’s promises: corn is off 17 cents, beans down nearly 50 cents, while wheat has lost 35 cents in Chicago, 30 cents in KC, and almost 40 cents in Minneapolis.

First notice day for March grain futures is Friday, Feb 28th. Long positions need to be closed out by Thursday, Feb 27 to avoid the risk of taking delivery. Last trading day for March contracts is March 13th.

In other news, the Arctic “doomsday” seed vault in Svalbard, Norway, welcomed its one millionth seed variety this week. The Svalbard Global Seed Vault is located halfway between Norway and the North Pole and preserves the genetic legacy of human agriculture in the event of a cataclysm.