Chicago Mercantile Exchange (CME) Reports Mixed Results For U.S. Livestock Futures
There was a mixed day of trading on the CME on Thursday, as a shortage of cash trading was evident. The absence of cash trading prompted the selling off of cattle contracts. Traders were visibly nervous throughout the day, as the hog industry continued to bounce around. The Department of Agriculture (USDA) reported earlier this month that there would be more agriculture exports for US Farmers. However their projections have not yet materialized and it’s having an effect on the market.
During June and earlier in July the hog futures have seen huge advances. Mainly due to the African Swine flu in China, and the need to replace the destroyed pigs. However the demand for hogs from China has softened in the last few days.
Livestock Futures- The USDA Reported 9000 Metric Tons Of Exports Would Be Needed
The recent report by the USDA called for 9000 of metric tons of exports from the U.S. According to livestock trader Dan Norcini, the numbers the USDA reported have not materialized. He said, “people are becoming very skeptical of when China is actually going to start buying imported pork.’ Norcini voiced some other concerns with hog futures. He said if ‘China doesn’t step up to the plate and start buying, the hog stocks will fall even more.’
On Thursday afternoon Bloomberg reported an anonymous source, stating, ‘China would be buying US cotton and corn soon. Traders are very leery of banking on that news, they claim it’s not dependable enough. Norcini said traders and others want to see results not promises. He said, “this market is counting on China to come in, and buy a lot of pork.’ Despite the promises from the USDA and the African Swine flu count, the sales are not there.’ Traders are saying there will be an excess of available US pork by the end of 2019. If China doesn’t come in and buy it, there is going to be a huge problem for US pig farmers.
The USDA Released A New Export Report On Thursday That Was Disappointing
Trading on the Chicago Board of Trade (CBT) reported soybean and corn future losses on Thursday also. Financial analysis were very disappointed on Thursday with the release of the USDA report. There was a deadening lack of buying from meat packers on Thursday, which caused livestock futures to slump. The (CME) August cattle live futures closed down on Thursday at 0.250 cents per pound.
USDA announced more details on Thursday about support to the US farmers effected by the trade wars. The total package will be 16 billion dollars of aid to US farmers. The aid will be disbursed to farmers until an adequate and equitable deal with China can be worked out. Although the actions of the White House started the trade wars, President Trump has been working since May to rectify it. Trump recently said, ‘China hasn’t been playing by the rules for a long time, they had to be stopped.’