Commodities Selloff Stops

The ongoing Wuhan coronavirus outbreak has been wreaking havoc on commodities markets, as the epidemic has created trade disruptions and massive uncertainty.

Raw materials that are heavily dependent on Chinese demand, like copper, hogs, and soybeans, had been in a freefall since the beginning of the year but stabilized this week. Meanwhile, U.S. stock index futures, which have gyrated wildly throughout this saga, reached all-time highs on Thursday.

News has been somewhat more supportive, especially as the disease is spreading more slowly than originally feared, though still quite dangerous. There are also new reports of antiviral drugs being used successfully against the virus, which could help reduce mortality.

For market bulls, better news on the Wuhan coronavirus outbreak, coupled with cheap prices is inspiring bargain-hunting buying.

On the other hand, this bounce in prices has been limited so far, causing some to fear that this is nothing more than a “dead cat bounce,” a brief price rally before another crash begins.

As of midday Friday, March copper traded for $2.56 per pound, up 4 cents this week, while April lean hogs fetched 66.5 cents per pound, up 5 cents on the week, and March soybeans stood at $8.80 per bushel, up mildly.