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COVID-19 Monitoring Kit

The coronavirus outbreak has disrupted global shipping and consumer demand at a time when the agricultural economy is already facing a series of major supply shocks. These events together have the potential to generate ripple effects through the broader macroeconomy for some time to come.

In response, Gro has assembled a COVID-19 Monitoring Kit that provides near real-time insight into this dynamic situation.

The tool-kit includes a collection of displays, most updated daily, in Gro, and insights from our analyst team, which are free to all users. It also includes predictive models and data series only accessible through the Gro API (please contact us to request API access).

Links to all displays and insights can be found in this article, and displays can be found by searching in Gro. Simply log in, visit Gro Curated Displays (in the left navigation bar) and search for "Coronavirus" or "COVID".

Gro’s COVID-19 Monitoring Kit contains four main sets of tools - for supply forecasting, monitoring trade and inventory, tracking prices, and understanding the situation in China. Together, these four perspectives provide a forward-looking picture of the situation. 

 

Supply Forecasting

With early indicators pointing to a rocky 2020 growing season for the Northern Hemisphere, supply forecasting is even more important than usual. Floods prevented some areas in the US from planting for a second year in a row; East Africa and parts of South Asia are being ravaged by locusts; and fall armyworms are spreading in China again, threatening corn, rice, wheat, and sugarcane production.

 

Monitoring Trade and Inventory 

While trade is a good proxy for demand under normal market conditions, the current situation also requires careful monitoring of inventories. Many countries, including China, were initially unable to import enough to satisfy their needs because of shipping disruptions, and have compensated by importing much larger quantities in recent weeks. 

  • Track trade balances in near real-time, including Brazilian soybean exports, to understand impact South America is having on US export demand.
  • Keep an eye on weekly bilateral trade flow data between the US, Japan, and South Korea to see if demand is being depressed by coronavirus worries.
  • Monitor export prices from major origins to predict shifts in the global trade balance.

 

Tracking Prices

Prices are leading indicators of shifts in market perception of supply and demand fundamentals. Price movements not only provide information about what is happening on the ground, but are essential for forecasting future decisions by farmers, importers, and processors.  Keeping close track of price data worldwide is doubly important in the challenging and dynamic environment created by COVID-19. 

  • Track free-on-board prices of commodities from major exporters to forecast exports and trade flows.
  • Compare daily updates from Gro’s wheat yield model against futures and export prices.  Crop yield is the most significant price driver during the growing season. 
  • Analyze price histories to predict shifts in market share and monitor the impact of logistical disruptions caused by COVID-19. South America harvested a record soybean crop and South American export prices are likely to remain below US export prices for some time
  • Use the Gro API for daily cash prices that are essential to follow China’s progress rebuilding its devastated hog industry.  African swine fever has caused unprecedented price moves in the Chinese hog market.

 

Understanding the Effects of COVID-19 on Chinese Agriculture

China, the world’s largest agricultural player, has been hit particularly hard by the combination of African swine fever and the COVID-19 outbreak. Agricultural activity has been substantially disrupted, and being able to predict the start and trajectory of any recovery will be key. The Gro API provides access to a wealth of data, including:

  • Ground-level insights into China’s soybean industry for a full picture of industry activity and a leading signal of the strength of China’s animal protein industry.
  • Granular price data for livestock that clarify the interaction of ASF and the coronavirus in the market.
  • Data about China’s vegetable oils industry for another perspective on China’s import demand.
  • Gro's China Agriculture Price Index, which allows monitoring in near real-time of inflation and demand across China, and will signal any forthcoming rebound in Chinese demand.
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