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One has to really scratch around to find much to discuss in the ag markets this morning, and for the most part, I have come up empty-handed. Grains are mixed with corn fractionally higher and wheat soft, and beans have snapped back higher now after closing lower 9 out of the last 10 sessions.
We will have export sales to mull over tomorrow morning, but outside of that, the most important scheduled news on the docket will be the Quarterly Hogs and Pigs Report, which will be issued after the closes on Friday.
Currently, the trade estimates that I have seen stand at; All hogs and pigs 102.6% of a year ago, breeding herd 100.8%, pig crop at 101.9 and farrowings of 100.8%. I have been hearing reports of an increase in Porcine Epidemic Diarrhea (PED) virus already this year, which for those of you who are close to the industry know can wreak absolute havoc with death losses, so does bear watching.
That said, regardless of what the report states, considering that nothing will be traded until Tuesday morning next week unless the numbers are shocking in comparison to the estimates, the reaction should be muted.
Pork Production a Bright Spot
As long as we are on the topic of hogs, it should be pointed out that this has been one of the brighter ag markets of the year. Yes, we did witness the normal seasonal breakdown into the fall, but prices have recovered nicely and would appear to have a bright outlook leading into 2018.
The reason? Demand.
With not only the U.S. economy on a growth trend but the global economy as well, meat consumption continues to climb. Net exports are up 8% over last year. One point of concern though is that since 2015 our No. 1 export market is Mexico and this year, Mexico pushed above the No. 2 buyer, Japan, by 45%.
Needless to say, all this rattle and blustery talk about canceling NATFA is not good news for the meat industry nor for the majority of U.S. agriculture in general.
Macros are generally supportive this morning as we have energies and metal trading higher with the dollar flat. I am not really sure anyone outside of hedgers really cares much at this point. For now, we can mark down the days until Christmas and realistically the end of the year.