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While the action in the grain and soy markets this morning would not be described as euphoric, it would appear that the trade is ready to depart for Thanksgiving on a cheery note. Grain are rather flat but this after strength yesterday but soybeans have extended to the highest level since the USDA gave us all a jolt on the November production reports. La Nina concerns, ongoing bean demand and pre-holiday, pre-end of year short covering have all conspired to lift prices this week. I do not want to dash the good feelings but do keep in mind though that we have really not gone anywhere and could be in store for overall flat trade for some months ahead.
Looking further down the road, I did read an interesting piece this morning about changes that are occurring or at least proposed in the Chinese hog industry. According to Reuters, there are at least eight companies that intend to build commercial size hogs operations in the Northeastern region of that country that would produce around 17 million market hogs. It is projected that if this comes to fruition, that part of the country will produce around 20% of the Chinese hogs production or around 120 million hogs per year which would be roughly equivalent to all the hogs slaughtered annually in the U.S. While this is one of the coldest winter regions in China, it is also the least populated, allowing for larger operations and also a major grain region, last year producing around 40% of the nation’s corn. Keep in mind that not only could this present a scenario of greater corn/meal demand but would also potentially create a feedstuff strain in the southern part of the country, bringing them back as importers much sooner than many would suspect. Combine all this with the ethanol program that is currently underway, and it would appear that China could become a substantial player in the global corn market again in the not too distant future.
Markets will be open for normal trading hours today, but we will be closing early on Friday. With that, we would like to wish everyone a safe and blessed Thanksgiving.