Commentary
December NOPA soybean crush came in at 195.3 million bushels yesterday, above the average 193.1 million bushels (mbu) estimate and up from 189.0 mbu in November and 177.5 mbu in Dec 2022, as well as the largest single month on record (ahead of 189.8 mbu in Oct 2023). If only the bean market had an increase of demand along with these impressive usage numbers. Rains in Brazil along with possibly weak Chinese demand are making more noise in the market as managed funds have flipped from long to short. China’s largest hog production firms indicate they are on track to cut herd size in the following months. While China produced a record amount of pork in 2023, farmers ramped up slaughter during the last quarter due to ASF outbreaks in my view. Now China’s largest hog production firms indicate they are on track to cut herd size in the following months. Some of that liquidation has already happened as pork production outperformed a year ago. Pushing the liquidation is the accumulated unprofitability in 3 of the last 4 quarters of at least $20 per head. China’s hog herd accounts for 1/3 of the feed consumption domestically. Less hogs due to disease could mean less demand for beans. Don’t be surprised to see China or “Unknown Destinations” cancel previous sales for future shipments of beans in my opinion.
Trade Ideas
Futures-N/A
Options-N/A
Risk/Reward
Futures-N/A
Options-N/A
Please join me for a free grain and livestock webinar every Thursday at 3pm Central. We discuss supply, demand, weather, and the charts. Sign Up Now
Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member.
Futures and options trading involves substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. The information contained on this site is the opinion of the writer or was obtained from sources cited within the commentary. The impact on market prices due to seasonal or market cycles and current news events may already be reflected in market prices.PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. All information, communications, publications, and reports, including this specific material, used and distributed by Walsh Trading, Inc. (“WTI”) shall be construed as a solicitation for entering into a derivatives transaction. WTI does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71.
Sean Lusk
Vice President Commercial Hedging Division
Walsh Trading
312 957 8103
888 391 7894 toll free
312 256 0109 fax