Miller Magazine Issue: 122 February 2020

88 MARKET ANALYSIS MILLER / FEBRUARY 2020 and 16.2% average. The most advanced harvest is in Mato Grosso where 44.5% of the soybeans have been harvested. The weather in Brazil continues to be generally favorab- le for the soybean crop with the one exception of far sout- hern Brazil where dry weather continues to be a concern especially in Rio Grande do Sul, but localized rains in the state over the past month have helped the soybean deve- lopment according to Emater, which is the state's extensi- on service. There have been some concerns that the wet weather in central Brazil might start to jeopardize soybean yields and quality, but I don't see that as a major issue at present. In fact, the soybean harvest in Mato Grosso inc- reased 17.8% last week to 44.5% compared to the ave- rage of 31.7%. The U.S. trade delegation has conceded that the Chi- nese purchase agreement has a qualifier that it buys U.S. products only if market conditions are compatible. So, if Brazilian soybeans are significantly cheaper than U.S. soy- beans, we can’t compel the Chinese to make those purc- hases. It’s worth noting that it takes 30 days for a vessel of U.S. soybeans to reach Asia. The good news is that the coronavirus issue could be under control before a load of U.S. soybeans, purchased this week, even reaches a Chi- nese port. Still, it’s at the Chinese ports where the ship- ping issues get complicated. So, if we try to summarize, we will see that main two is- sues that really affected markets about coronavirus wave: 1) less oil consumption (some sources said 25% less) whi- ch decrease prices and take effect on vegoils market; and 2) shares fallings due to production restrictions. Moreover, even some Russian analysts trying to explain slow Russian wheat exports using virus affect. But maybe the virus has a bigger effect in our minds than in trade? More panic we have, more time China gets to take a breath.