… Late yesterday China’s agriculture ministry reported a new case of African swine fever in the city of Jiujiang in Jiangxi province of southern China, Allendale said… Lean hog futures rallied late last week after USDA reported China had purchased 3,300 MT of U.S. pork for this year and 9,400 MT for shipment next year, noted Ben DiCostanzo of Walsh Trading late Friday. “This leads me to believe the Chines are extremely worried about the disease’s progression and their inability to control the spread of the disease”… [Fri]: National carcass base went up 50 cents… Iowa-Minnesota carcass base fell 56 cents… USDA reported carcass cutout values this afternoon rose 68 cents… “The big export sales to Mexico and Japan today really gave it a shot in the arm, but the swine fever is trouble for China,” Virginia McGathey, of McGathey Commodities, said. “China coming to the U.S. to buy our pork, regardless of the tariffs and that tells us they really are in trouble…
Farm Commodity Newsletter/Iowa Farmer Today
Mon 12/3/2018 9:03 AM
Lean hogs - Late yesterday China’s agriculture ministry reported a new case of African swine fever in the city of Jiujiang in Jiangxi province of southern China, Allendale said. “China has now reported more than 70 cases of the highly contagious disease since early August.”
“Trading the hog market is tricky proposition – kind of like ‘waiting for the other shoe to drop,’” ahead of anticipated Chinese pork purchases, said William Moore of The Price Futures Group. He said the futures premium to cash and record pork production led to a $4 correction from highs, “but the shorts are reluctant to get over-zealous about the downside.”
China signals positive
Lean hog futures rallied late last week after USDA reported China had purchased 3,300 MT of U.S. pork for this year and 9,400 MT for shipment next year, noted Ben DiCostanzo of Walsh Trading late Friday. “This leads me to believe the Chines are extremely worried about the disease’s progression and their inability to control the spread of the disease.”
In the weekend U.S.-China agreement, “China agreed to boost purchases of agriculture and industrial goods to reduce its trade imbalance with the U.S.,” The Hightower Report said. “The news is bullish for the prospects of better sale of U.S. beef to China.”
Fri 11/30/2018 4:37 PM:
In weighted average negotiated prices for barrows and gilts, USDA reported;
• National carcass base went up 50 cents to $50.03/cwt.
• National live fell 15 cents to $39.50
• Iowa-Minnesota carcass base fell 56 cents to $49.28
USDA reported carcass cutout values this afternoon rose 68 cents at $69.12/cwt.
“The big export sales to Mexico and Japan today really gave it a shot in the arm, but the swine fever is trouble for China,” Virginia McGathey, of McGathey Commodities, said. “China coming to the U.S. to buy our pork, regardless of the tariffs and that tells us they really are in trouble.
The Hightower Report said trade has been anticipating a boost in sales with African Swine Fever hitting China, most notably in the February contract. “The market continued to absob this week’s news of large pork export sales to China,” they said.
Follow through highlights beef
The cattle market “bounced hard,” on Thursday with concerns about poor weight gain in the Plains, combined with a colder than normal outlook. “There was some mild follow through on Friday, and the December futures briefly traded above last week’s highs,” The Hightower Report said.
African Swine Fever was reported in the northeaster portion of China, in Tianjin. “This affected 19 percent of the 361 pigs on the farm, which died from the swine virus,” Michael Headlee of CHS Hedging said.
Mon 12/3/2018 9:03 AM:
U.S.-China trade truce boosts grains
China promised to buy an undisclosed but substantial amount of U.S. ag products, but no details were announced, said Jacob Christy of The Andersons. “The markets can ignore the details in the very short term.”
The U.S.-China meeting Saturday “has been spun as a success from both sides and the market has adjusted for such optimism, but for the market to explode from here we need to see some proof in the very short term things have changed,” said John Payne, broker at Daniels Trading.
The U.S. agreed to not add 15 percent to existing tariffs or to place tariffs on more China goods, and China agreed to buy U.S. ag products, noted Steve Wagner of CHS Hedging. “However, China has not yet stated they will reduce tariffs on U.S. grains. The tension remains very high as each side attempts to interpret the agreement to suit their needs.”
Positive news for the markets also came from U.S., Canada and Mexico leaders signing the U.S.-Mexico-Canada Agreement, Allendale noted.
“The 90-day truce on tariffs gave the market a boost on the Sunday night open, but a lot of those gains have slipped away into the early morning trade,” Blue Line Futures said. Analysts there anticipated a volatile session, particularly on the floor open, and said they’ll “be most interested in money flow this week.”
“The stealthy winner from the G20 fallout is corn, specifically new crop,” said John Payne, broker at Daniels Trading. “If things turn out with the best case scenario in mind regarding China, then the acreage battle is back on.” South American farmers are growing more soybeans and corn acres are low, favoring U.S. corn export demand.
After short-term gains, where the market goes will depend on how much and when China buys ag products, said Jacob Christy of The Andersons. Brazil’s soybeans are maturing, and the crop appears to be record large. If details of U.S.-China trade aren’t available soon, those details “might not matter much.”
“We would suggest farmers increase 2018, 2019 and 2020 soybean cash sales 10 percent,” and add 20 percent to old-crop and 2019 cash corn sales, said Steve Freed, grain research VP at ADM Investor Services. He noted that if the U.S. and China don’t reach a deal within 90 days, the U.S. will increase existing tariffs and add tariffs on remaining imports from China.
Exports: USDA said private exporters reported sales of 147,500 MT to unknown destinations for 2018-19 delivery.
December Chicago futures have been trading even with March, reflecting global market strength, said John Payne, broker at Daniels Trading. Kansas City wheat futures haven’t been boosted by world buyers, but in the next three months “it should improve substantially, especially if the U.S. dollar would weaken.”
“The wheat complex was higher overnight responding to the U.S./China trade truce,” said Steve Wagner, market analyst at CHS Hedging. He anticipated prices 3 to 5 cents higher this morning.