Front soybean futures 889.25 up 1.25.
From Quartz:
African swine fever is an incredibly contagious disease affecting pigs and wild boars. It almost always kills, and quickly: Mortality rates are about 100%, with most pigs dead within 10 days. (It doesn’t affect humans.) Since August, more than 100 outbreaks have been confirmed, in dozens of provinces across China, Mongolia, Vietnam, and Cambodia, ultimately resulting in the culling of a million pigs. For now, the virus shows no sign of stopping.For US farmers, this is extremely bad news. China is the world’s largest soybean importer, and the US its biggest supplier. Much of that crop goes directly to feeding pigs, in the form of pigswill. Fewer pigs eating the swill means less demand for soybeans, depressing prices for US farmers. It will take as much as five years to return pig numbers to their previous point, according to a Bloomberg report, since the number of breeding sows is down about 20% from a year ago, while Chinese pork production is expected to decline by just under a third.American soybean farmers are already under pressure by Trump’s ongoing feud over trade tariffs, which shows no sign of abating any time soon. By the end of last year, thousands of “grain belt” farmers across Kansas, Oklahoma, Texas, Nebraska, and Colorado were forced to apply for a cut of the $12 billion set aside as federal emergency relief (paywall). This allowed for a payment of 82.5 cents a bushel—just under 10% of its market price....MORE
This is the reason we've been posting:
American pigs are looking for places to hide from farmer Brown:
American LNG to China has never been part of the pitch. On the other
hand the softness in soybeans, exacerbated by the culling of the Chinese
swine herd due to the African Swine Fever, could be a problem if it
persists or if Chinese dining habits change and pork becomes less
prominent on the menu.
Looking out a few months to the start of the U.S. planting season the USDA reports there will be some soybean acres switched over to wheat which would pull some potential supply out of the equation.
For now long ain't wrong as they used to say in the pits, with a dynamic tension setting up under seemingly sideways pricing. The last time we saw this pattern, Nov. 30, patient reader was treated to this comment:
Looking out a few months to the start of the U.S. planting season the USDA reports there will be some soybean acres switched over to wheat which would pull some potential supply out of the equation.
For now long ain't wrong as they used to say in the pits, with a dynamic tension setting up under seemingly sideways pricing. The last time we saw this pattern, Nov. 30, patient reader was treated to this comment:
...We have that series of higher lows starting with the September bottom but not (yet) higher highs.Here's a year of beans via FinViz:
If one can ascribe animal spirits to lines-on-chart I'd say soybeans are looking for a reason to trade higher.
Great. I am now anthropomorphizing inanimate objects...
Prices gapped up and here we are. Same sideways action, same uncertainty and same set-up. 915.50 last, down 1.25.
...Pork prices, with the exception of 2014 have been trading between $60
and $100 for a decade.In 2014 you had the American bacon binge (2011 -
2014) combined with porcine epidemic diarrhea virus (PED).
When it was realized PED was not as deadly as rumored/feared (but still quite messy) prices came back down....
When it was realized PED was not as deadly as rumored/feared (but still quite messy) prices came back down....
