Ag Analysis Report 9/15/20 - African Swine Fever Still Keeping
18 months ago, U.S. federal agents seized 1 million pounds (454 metric tons) of pork smuggled from China to a port in New Jersey amid fears the meat could contain traces of the African swine fever virus that has ravaged the Asian country’s hog herd.
Humans couldn't be infected, but pig populations were wiped out by African swine fever. China’s hog herd, the biggest in the world, plummeted as farmers cull inflicted animals.
The U.S. never had African swine fever and officials kept stepping up their efforts to keep the disease out. These efforts were crucial because any sign of illness stateside meant pork buyers would ban American exports at a time when producers were already suffering from Chinese tariffs.
A year later, China made its biggest purchase of the pork from the U.S. as African swine fever reduces hog herds and drives up prices. It got so bad that in Nanning, the capital of the Guangxi province, one farm owner was breeding pigs that weighed over 1,100 pounds selling them for more than 10,000 yuan, or $1,400, which was more than three times as high as the monthly average disposable income in the province.
It's been quite sometime since I heard any reports about the African swine flu...that was until today.
An outbreak of African Swine Fever threatens to keep German pork locked in the European Union with China, South Korea and Japan all banning shipments, a major setback in an already challenging year for meat producers following COVID-19 outbreaks at plants.
German pork exports to China are worth around 1 billion euros ($1.2 billion) annually, and volumes had doubled in the first four months of this year on soaring demand after Chinese output shrank around 20%.
Germany has sought a limited, regional ban on exports as the outbreak near the Polish border is hundreds of kilometres from the major producing region in north-west Germany. Whereas the concept of a regional ban exists in intra-EU trade, China has so far stuck to a national ban.
If the ban is extended, this might push up pork prices in the US as China will look to the farmers in the US to make up the difference. So how might this affect lean hog prices, lets go to the charts.
Monthly Chart (Curve Timeframe) - the monthly demand is at $35 and monthly supply is at $90.
Weekly Chart (Trend Timeframe) – the trend is sideways.
Daily Chart (Entry Timeframe) – the chart suggests if price pulls back to the daily demand at $60, to go long using a confirmation entry.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
Posted Using LeoFinance