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Reuters Reports Huge Chinese Pork Imports Again in December

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By Dennis Smith

Follow me on Twitter @denniscattle

Tuesday January 14, 2020


Cash is called steady but I suspect it will be higher. Cash came in higher yesterday after being called flat to lower. The sharp downward kill revisions from last Friday/Saturday are now being chocked up to mechanical issues. Whatever. This weeks kill is projected to drop about 3% from last week. Numbers appear to have finally peaked. Packers are feeding hogs to heavier weights which is the same strategy utilized in the PED year. Consider the following bullets.

  • Chinese cash hog prices are up 2.28% so far this week from last week. They reside at $3.37 a pound compared to about 40 cents a pound in the U.S. What a joke.
  • Reuters is reporting that Chinese pork imports in Dec were huge at 375,000 MT compared to 229,707 in Nov and 95,384 in Dec of 2018.
  • Phase one deal will be signed on Wed.
  • Sources suggest production in China will drop off hard after the holiday.
  • Tyson stock soared into a new 52-week high on Monday.
  • Bellies are cheap and starting to bottom.

Lean hog futures have a lot of work to do in repairing the bearish chart pattern. Need to see a close in Feb over $71.00. Fundamentally, need to see a close in the hog carcass above $83.00. Today is the last day of the Goldman Roll.


Open interest continues to pour into the live cattle futures market, Total OI was up 2,120, reaching a new recent high at 392,848. Packers will need to move a bit more quickly and most likely be more aggressive in securing animals this week. They bought most animals late Friday at steady to slightly higher money but the negotiated volume was light at only 73,000. The show list is larger this week but only slightly larger. The beef is expected to attract new demand given the sharp discount. Futures are poised to test and likely penetrate major resistance at 13000. Were bullish and holding the Feb/Jun bull spreads and weve been accumulating large numbers of the April LC 140 calls.

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About the author

Dennis Smith has been a full service commodity broker specializing in grain and livestock trading for over 25 years. Dennis has a wide range of customers, many of whom are grain and livestock producers. Dennis develops and helps execute hedging and speculative strategies in his Daily Livestock Wire which is prepared each afternoon exclusively for his customers.

Dennis grew up in Central Illinois before launching his brokerage career.

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