Genesus Global Market Report: USA - August 2019

Volatility in the markets….that is the understatement of the year.
calendar icon 1 September 2019
clock icon 3 minute read
pork market prices August 28, 2019

As someone told me on Monday, “Traders are watching the Trump twitter feed up on their phone in one hand and the index finger on their other hand is on the key board getting ready to push buy or sell!"

I believe that China has no choice but to come to an agreement with President Trump, the big question is when. Like it or not, politics play a big part in the timing of these agreements. If Trump comes to an agreement to soon before the 2020 election no one will remember it. Both sides want the biggest bang for their buck at the polling places and agriculture is stuck in the middle.

The old story about making sausage and making political deals needs to remain behind closed doors, comes to mind. I do know this, cold storage is full and the domestic market cannot handle all this extra pork we are producing.

I am hearing some issues there are problems getting enough workers at some processing plants. This may be causing them to sell entire carcasses instead of primal cuts, which makes sense. Labor in China is plentiful so let them cut it up. Problem solved!

President Trump and Japan have reached a deal and that should also get more pork exported from the country. Unfortunately, I believe volatility will continue in all these agriculture markets.

The price of corn has dropped so now we have a great opportunity to get some feed costs locked in. The corn price will also be limited to the upside though. World demand is falling and after the fires in Brazil burn most of the forests, they will have millions more acres to plant.

What I would watch for is areas of the Midwest with high basis where crops are good and areas of a positive basis due to prevent planting in that area.

Allan Bentley

Sales, Genesus Genetics
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