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The combination of Brazilian weather concerns and talk of additional Chinese bean purchasing helped to lift the bean market to the highest levels since the 20thof December yesterday and so far this morning, we are at least sustaining that gain. The weather conditions in Brazil are the easier factor to monitor right now as with the partial federal government shutdown, no export sales updates are forthcoming. It will be interesting to see what that have to say once the USDA is fully staffed again. Corn and wheat have maintained a positive bias as well for this early year trade but have really not made any headway to speak of. While we could find additional stimulus from either of the two factors mentioned above, the final crop production and supply/demand reports are still just a bit over a week away and it would not be shocking to see prices chop sideways between now and then.
Whatever China has been doing to stop the spread of the African Swine Fever in that nation, evidently is NOT working. It was reported overnight that the disease has affected/infected a large commercial hog operation in Suihua City. By large I mean a farm that feeds 73,000 hogs. This particular operation is a joint venture with a Dutch investment fund and is now the largest impacted to date. The report states that 4,686 pigs on the farm have been detected with the disease of which 3,766 have died. It is difficult to imagine that it was contained to that few head. According to the “official” data, nationwide more than 200,000 hogs have been infected with the disease to date, which again, one has to imagine is a conservative estimate. As we have noted previously, this should open the potential for additional U.S. pork exports to China this year but is not a positive for bean exports.
The numbers are in and it would appear that it was a record-breaking year for soybean exports; in Brazil. According to figures released by the government yesterday, total grain/oilseed exports reached 83.8 MMT, which is an increase of 23.1% over 2017. Interestingly enough, for the year, corn exports were down 18.3%. I wonder what made up the difference? It was also reported yesterday that the newly sworn-in President, Jair Bolsonaro, intends to forge ahead with plans to expand agricultural production onto to indigenous territories. I suspect in other words that means pushing further into the Amazon rain forests.
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