PALM SPRINGS, Calif. (DTN) -- Commodity experts at the International Sweetener Colloquium here on Tuesday signaled that the announcements of the spread of the coronavirus and the fall of the stock market are making them uncertain about the future.

Following the stock decline and concerns about the coronavirus -- COVID-19 -- from the Centers for Disease Control, President Donald Trump on Wednesday announced a 5 p.m. Central news conference seeking to diffuse fears about the virus. Trump took to Twitter early Wednesday to criticize the media and Democrats in Congress for "doing everything possible to make the (coronavirus) look as bad as possible, including panicking markets, if possible." Trump added, "USA in great shape!"

After two days of declines -- including the steepest two-day drop in the Dow Jones Industrial Average in four years -- U.S. stock indexes such as the DJIA, the S&P 500 and Nasdaq were each ticking upward in early trading Wednesday, as were commodity prices for corn, soybeans and cattle.

Still, analysts speaking at the International Sweetener Colloquium raised concerns about the economic problems created by the global spread of the virus. In China, for instance, instead of going to restaurants, people are buying vegetables in food stores and taking them home to cook, which will really affect the restaurant business, said Stephen Nicholson, a senior analyst for Rabo AgriFinance. Tourism also is coming to a halt.

"We have to be ready for more volatility as we see trade disrupted," Nicholson said. "We are going to see economic activity contract. There's probably a little more downside than we had thought."

Nicholson also said that he is not in the camp of people who are sure that the Chinese will fulfill their promises to buy $40 billion to $50 billion in agricultural products.

Commodity prices are low, he noted, which means that the Chinese would have to buy a lot of products to spend that much money. If the Chinese don't live up to their purchase promises, in the fall, the Trump administration "will have to make a tough decision on whether to punish them," he said.

Just Tuesday, USDA and the U.S. Trade Representative's office sought to tamp down concerns that China will not uphold its agreements with a news release detailing some of the changes China has made to open markets to U.S. agricultural goods over the past month. Yet AgriCensus, a London reporting agency, pointed out that almost all the soybeans Chinese buyers have booked recently have been from Argentina and Brazil.

Other countries that also rely on agricultural exports also are not seeing higher market prices at the moment. For instance, New Zealand has experienced a drought, which would normally cause dairy prices in other countries to be bullish. But that hasn't happened, Lucas Fuess, director of dairy market intelligence for HighGround Dairy, said during a discussion of the outlook for ingredients prices.

"Fear is gripping ... the entire supply chain," Fuess said. "It is a really tough position, an unprecedented situation."

Dairy prices have risen compared to recent bad years, but the coronavirus could pull dairy prices down, Fuess said. "It is a time that makes price forecasting extremely difficult. From a trade and risk perspective, it is a really tough ballgame," he added.

The sugar buyers attending the conference are trying to make decisions in light of higher sugar prices and a possible U.S. shortage due to the weather problems in the Midwest, Louisiana and Mexico. But Nicholson noted that, for many other commodities, prices are low and there are buying opportunities.

DTN Ag Policy Editor Chris Clayton contributed to this report.

Jerry Hagstrom can be reached at jhagstrom@nationaljournal.com

Follow him on Twitter @hagstromreport

(BE/CZ )

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