Dennis Smith from Archer Financial Services, April 20th 2017
China Buys a Large Amount of U.S. Pork Last Week
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Thursday April 20, 2017
The big news this morning in the hogs is the weekly export sales data. For last week as reported this morning, weekly pork exports sales were huge at 36,200 MT, up 49% from the 4-week average. China was in for 23,900 MT, or 66% of the business. This represents the largest weekly pork purchase by China in a very long time. I don’t have the weekly data on file but eventually I’ll get the information. This might be strong enough news to turn the hog market…to force a bottom. Open interest continues to decline as funds continue to sell, liquidating their length. If this news does not shore up the selling I’d be very surprised.
Cash steer prices surged upward again yesterday. Many are calling futures higher off the news which I don’t really understand because the market was fully aware of the cash developments before the closing bell. Cash tops in the south were reported at $1.32, new highs for the year with tops in NE at $1.33 and IA reported trade in the hot beef at $210. Choice beef cutout was down .82 at $215.17 so packer margins eroded rather substantially yesterday. Open interest in LC declined for the first time in ages. No doubt this was due to hedge lifting with the cash trade occurring during market hours. LC futures have closed higher for ten consecutive sessions. Does the string of consecutive higher closes continue? Weekly beef export sales were 19,700, up 30% from the 4-week average.
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