Happy New Year? The early morning Bloomberg Business News had some eye catching stories.
The first story was about how the Mainland Chinese Stock market tripped a market breaker declining -7% and closing for the session. This strong sell off appears to have spread into the European and U.S. equity markets. At this writing, the U.S. Dow Jones Index is down -360 points.
The cold war in the Middle East, between Iran and Saudi Arabia, heated up several degrees as Saudi Arabia executed a Shite cleric and Iran attacked their embassy. Saudi Arabia retaliated by kicking out the Iranian ambassador. There are two active proxy wars in the Middle East besides the war with IS and the world.
Iran indicated that they will expand their oil exports but do not think it will depress crude oil prices. Russia continues pumping record amounts of oil. At least U.S. consumers are getting a break at the gas pumps.
The Red Meat markets have had disrupted product flows for the two weeks during the holidays. It will likely take a week or two to return to more normal product flows.
The USDA’s weekly F.I. Slaughter and Pork Production will not be available until late Monday, therefore, we dropped this section of the report until next week.
The June Lean Hog futures peaked Monday this holiday week. Trading volume was as usual very modest. Given the low corn and Soybean prices should reduce feedstuff prices for hog producers in 2016. This could start to accelerate hog hedging in deferred months particularly is we start to see a more normal weather pattern develop going forward.
Mid-week, Wholesale Pork Markets values stabilized with sizable tonnages continuing to go into freezer inventory:
Mid-week the AMS/USDA Wholesale Composite Pork Carcass prices were reported at $67.78 per cwt. compared with the previous week at $67.89 vs. a year ago at $87.39. Product disappearance over the holiday could be the major influence on how we trade at the start of the new year. Futures markets are under pressure but is that because of the world stock markets in meltdown and a general commodity weakness or is an early reflection on product movement.
By: John Ginzel