Headlines:
China Makes Major U.S. Pork Purchase
China made its biggest purchases of U.S. pork in nearly two years last week, U.S. Department of Agriculture data showed on Thursday, as Chinese hog prices surged after an outbreak of a deadly swine disease. Buyers in the world’s biggest hog producer and pork consumer struck deals for the meat despite import tariffs of 62 percent imposed by China on U.S. pork as a consequence of the trade war between the two countries. The duties had slashed China’s imports of U.S. pork from companies such as WH Group Ltd’s Smithfield Foods since last summer. The sale of 23,846 tonnes of U.S pork in the week ended March 7 comes after a months-long outbreak of African swine fever in China that has spread to 111 confirmed cases in 28 provinces and regions across the country since August 2018. There is no cure and no vaccine for the disease, which does not affect humans but is highly contagious and fatal to pigs. About 1 million pigs have been reportedly culled so far in an effort to try to contain the disease. “They are going to need pork and lots of it,” Dennis Smith, a commodity broker for Archer Financial Services in Chicago, said about China. The sales were the biggest to China since April 2017 and the third largest since the USDA began tracking pork export sales in 2013.
Why U.S. Growers are Betting the Farm on Soybeans Amid China Trade War
U.S. farmers are gearing up to plant what could be their third-largest soybean crop ever despite failing to sell a mountain of beans from their last harvest due to a U.S.-China trade war that remains unresolved. Soybeans were the single most valuable U.S. agricultural export crop and until the trade war, China bought $12 billion-worth a year from American farmers. But Chinese tariffs have almost halted the trade, taking the biggest buyer out of the market and leaving farmers with crops they cannot sell. The U.S. government estimates farmers will have 900 million bushels, or approximately $8 billion, of last year’s soybeans in storage silos around the country when they start harvesting the next crop. The U.S. government rolled out a $12 billion farm aid package last year to soften the impact of falling revenue on farmers, an important source of votes for U.S. President Donald Trump. As winter ends and farmers begin planting, they will continue to plant soy despite uncertainty over whether they will be able to sell beans to China later this year. There are simply no better options, farmers say. “It is tough to rotate out of soybeans because what else are you going to plant?” said Darin Anderson, a 41-year-old farmer from Valley City, North Dakota.
Summary:
The corn market was mixed overnight then seemingly found support from wheat. Both of which finished the day in positive territory. Strength sprang up yesterday when it was being rumored that China was buying 3 million metric tons of US corn off the PNW. However, futures pulled back when freight and basis levels did not support the rumor and there has been no confirmation of the sale. Today however some buying did reenter the marketplace. Export sales were reported at 370k mt in 2018-19 vs. expectations of 800-1200k mt. Exports for the 2019-20 crop year came in at 475k mt vs. expectations of 0-300k mt. Soybeans were lower overnight and continued lower today, off from the gains seen yesterday with news lacking. Export sales for soybeans came in at 1.90k mt vs. expectations of 1.20-1.90k mt in 2018-19 and 3k mt for the 2019-20 crop year vs. expectations of 0-150k mt. Wheat continues to respond positively to our cycle time horizon for a reversal upside move. Wheat export sales for 2018-19 were 260k mt vs. expectations of 400-600k mt. 2019-20 exports were 80k mt vs. expectations of 50-150k mt.
