07 April 2013 (14:54 UTC-07 Tango)/26 Jumada l-Ula 1434/18 Farvardin 1391/27 Yi-Mao (2nd month) 4711

“This is a liquidating market until we run into a crop problem.”-Rich Feltes, R.J. O’Brien & Associates

Already tens of thousands of poultry have been killed off in China, to prevent the spread of the new deadly virus. Poultry markets are being shut down.  Not only does this directly affect the economy of China, it’s affecting farmers in the United States.

Commodity prices, mainly for U.S. soybeans, are dropping, because China is a major market for those U.S. crops.  The reasoning goes that if there’s no chickens to cook, then people won’t need the soybean oil to cook them in.

Up ’till now most cooking oil prices have been going up because of increased demand, and in some areas reduced supply.  China is the number one importer of soybeans, making up about 60% of the world market, so imagine what happens to soybean prices if they greatly reduce their purchases! (good for retail consumers, bad for farmers)