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When queried about rumors that Russia would be curbing wheat exports this year due to the short-fall in production, the official word from ag ministry is Nyet. That said, it is interesting that they met with grain exporters this week to discuss the outlook, and according to these folks, once the 30 MMT level has been reached there will be further discussions. The official estimate by the ministry this year calls for exports of 35 MMT.
On the other side of the demand potential ledger, it was reported that the WH Group, who are the largest hog producers in China have been ordered by the government to close one of their major slaughtering plants for 6-weeks in an attempt stop the spread of African swine fever. This accompanied news from the Ag Ministry that the overall pig herd was down 2% from the same period last year and the sow herd was down 4% from June 2017. When you think about how markets reacts to a 2% change in the U.S. herd which is just above 73 million head, extrapolate that to the size of the Chinese herd, which I believe is around 433 million head. A 2% shift would be comparable to an 11% change in the U.S. This is not the kind of news that a sagging bean market needs right now.
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