In this file:
· Futures File: Corn market pops
· Brazil's JBS imports Argentine corn, eyes U.S. supply
· China says U.S. soybeans 'prime target' over tariffs: trade group
· Pig trough: China hog prices plunge after farm building boom
Futures File: Corn market pops
Walt and Alex Breitinger, Futures File
via Globe Gazette (IA) - Mar 9, 2018
Corn prices burst higher this week, reaching levels not seen since last summer. Prices have been climbing consistently for almost two months as concerns mount about weather problems in South America affecting the upcoming corn harvest in Brazil and Argentina.
On Thursday, the U.S. Department of Agriculture updated its estimates, cutting the crop size again from both countries. Brazil and Argentina are two of the world’s largest grain growers and major competitors for U.S. exports. The drop in their crop sizes inspired corn buyers, and led that market to its biggest one-day gain in over six months, climbing over six cents per bushel on Thursday.
Agricultural markets were also relieved by a softening of President Trump’s proposed tariffs against imported steel and aluminum, noting that he would not apply the tariffs against Mexico or Canada, two of the United States’ largest trading partners. Many in the agricultural industry worried that the tariffs would spark retaliation by trade partners, who might impose their own tariffs against U.S. exports like corn, soybeans, beef, and pork.
U.S. farmers may still face threats from tariff retaliation, falling demand, or another year of huge U.S. grain harvests. Fear of losing the current profitable prices is prompting many to sell stored grain or use markets to lock in current levels for this fall’s crop via the December corn futures contract, which traded Friday for $4.08 per bushel.
Record highs for futures ...
Brazil's JBS imports Argentine corn, eyes U.S. supply
By Ana Mano, Reuters
via Nasdaq - March 09, 2018
SAO PAULO, March 9 (Reuters) - Brazilian meat processors are resorting to importing corn as local farmers hoard grains, creating parity between domestic and international prices, three industry sources told Reuters on Friday.
JBS SA, Brazil's second-largest chicken processor, has bought 30,000 tonnes of corn from Argentina to use for feed, with delivery set for April at a port in the state of Santa Catarina, said one of the sources.
The company, which had last imported corn in March 2017, is in talks for additional corn imports from Argentina and the United States for delivery starting in May, the first source said.
Brazil uses 5 million tonnes of corn monthly, 30 percent of which is consumed by JBS, listed rival BRF SA and privately owned Aurora Alimentos, that person said, adding all major processors are looking to import corn.
The two other sources said the demand for foreign corn is driven by farmers hoarding the grain and logistical obstacles between midwest growing regions and feedlots in Santa Catarina.
Santa Catarina's proximity to Paraguay and Argentina gives local food companies an incentive to source corn from those countries instead of buying from far-off Mato Grosso, said one of those sources.
Aside from JBS, the same person said another company with large operations in Santa Catarina has been importing corn from Paraguay. The movement is likely to intensify in April as improvements are made in a logistical corridor linking Paraguayan farms to southern Brazil, that source said.
"Producers in Santa Catarina pay for more than 100,000 truck rides per year to buy corn from the farmers in the center-west region. It's simply not economical," said that second source.
JBS, BRF and Aurora have the capacity to slaughter about 13.5 million birds and 76,000 hogs per day...
China says U.S. soybeans 'prime target' over tariffs: trade group
P.J. Huffstutter, Reuters
March 9, 2018
CHICAGO (Reuters) - Chinese officials have said U.S. soybeans are a prime target for retaliation against tariffs imposed by the Trump administration on steel and aluminum imports, according to the American Soybean Association.
Farm groups have long feared that China, which imports more than third of all U.S. soybeans, could slow their purchases of agricultural products, heaping more pain on the struggling U.S. farm sector.
Warnings to the soybean growers group about their product being used as a target in trade disputes were made last year, group officials told Reuters on Friday.
They came up in talks between the American Soybean Association’s leaders and officials at the Chinese embassy in Washington and in conversations between Chinese officials and U.S. soybean farmers, when the farmers were on a trip to China last fall, according to the group.
“We have heard directly from the Chinese that U.S. soybeans are prime targets for retaliation,” the trade group said in a statement. “The idea that we’re the only game in town, and these partners have no choice but to purchase from the U.S. is flatly wrong.”
Officials declined to elaborate further. The Chinese embassy in Washington did not respond to a request for comment on Friday...
Pig trough: China hog prices plunge after farm building boom
Dominique Patton, Reuters
March 9, 2018
BEIJING (Reuters) - Chinese pig prices hit their lowest in nearly four years this week, plunging farmers in the world’s top pork market into the red and underscoring concerns that a rapid expansion of large pig farms in China has outpaced slowing demand growth.
The sudden downturn - one of the steepest declines over such a short period ever - will mark the first serious test for many companies that have rushed into pig farming in the last two years.
It will also slow imports of pork by the world’s top buyer, traders and analysts say. The price is set to recover when demand picks up later in the year but will come under renewed pressure in 2019 as more new farms start production, analysts say.
Live pig prices are now hovering just above 11 yuan ($1.74) per kilogram in major producing areas such as Henan. That’s below average production costs, after plunging more than 20 percent from early January when they were close to 16 yuan per kg.
“The reason is very clear. There are a lot of pigs on the market,” said Feng Yonghui, chief researcher at trade website Soozhu.com.
The sudden plunge in prices is the result of conflicting trends in the industry over the last year. On the one hand, big producers have expanded rapidly to grow market share, but on the other, a government crackdown on pollution that intensified in 2017 shut many small farms, making it difficult to get an accurate picture of supply.
Monthly government data continues to show a drop in the number of breeding pigs, suggesting supply has not yet caught up with demand.
That kept market prices high throughout the winter and led Beijing to release some pork from its reserves. Though volumes released were small, it was another signal of insufficient supply that “misled” the market, said Pan Chenjun, senior analyst at Rabobank.
NEW YEAR’S ABUNDANCE …
BETTING ON REBOUND
Plentiful supplies will curb appetite for overseas pork, extending last year’s slowdown in purchases. China imported 1.2 million tonnes of pork last year, down 25 percent on the prior year.
“With the large drop in domestic pig prices, the space for imported pork is less and less,” said Feng.
For now, most farmers are preparing to ride out the downturn, betting on a rebound in a few months time…