China Continues to Book Large Pork Tonnage

by Archer Financial Services | Jun 06, 2019

by Dennis Smith
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LEAN HOGS

Cash was higher yesterday and not lower as the packer desired. I’m already hearing that cash will NOT be lower today, but fully steady to higher. So the talk that cash will be lower for next week may not prove to be accurate. June futures will shed some light on this subject fairly quickly today. On the move higher yesterday volume was 66,300 with open interest up 3,400. Weekly pork export sales were impressive, again. Sales were 33,800 MT up 1% from the 4-week average with China by far the largest buyer, taking 17,400 MT. Mexico was also a big buyer with 6,200, S. Korea at 3,400 and Japan taking 2,200. Shipments were respectable at 22,200 MT with Mexico the largest offtake of 6,500 MT followed by China taking 3,300, S. Korea 3,100 and Japan 2,800. These are solid numbers all around. China has now booked 251,000 MT and shipped 80,000 leaving 171,000 unshipped sales. Impressive numbers are only going to rise. I’m bullish.

LIVE CATTLE

Cash cattle continued to trade yesterday in trickle fashion with prices between 113-115 for most animals. The discounted board is “feeling too much of a discount” and this has finally resulted in a move away from the lows. Watch and wait for a test of resistance. Weekly beef exports were average, nothing to get excited about. Total sales were 16,700 MT or down 23% from the 4-week average. Shipments were 17,900 down 3%. S. Korea was our biggest players both in purchases and in shipments. Resistance levels have been identified in the evening wire. Prepare to add to hedges.

  
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The risk of loss in trading futures and options on futures can be substantial. The author does not guarantee the accuracy of the above information, although it is believed that the sources are reliable and the information accurate. The author assumes no liability or responsibility for direct or indirect, special, consequential or incidental damages or for any other damages relating or arising out of any action taken as a result of any information or advice contained in this commentary. The author disclaims any express or implied liability or responsibility for any action taken, which is solely at the liability and responsibility of the user. In addition, the author of this piece currently trades for his own account and may have financial interest in the following derivative products: (corn, soybeans, soybean meal, soybean oil, lean hogs, live cattle, feeder cattle).

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