The USDA updated monthly pork export numbers in early August.
Those June totals were similar to May since they showed the traditional ‘big four’ U.S. customers continued buying aggressively, whereas Chinese buying kept dipping from their late-winter peak. Japan, Mexico, Canada and South Korea bought a total of 292.6 million pounds of U.S. pork during June. That marked an 8.5% annual rise.
As mentioned previously, all four of the big U.S. pork customers are also suffering PEDV outbreaks, which helps explain their aggressive buying. However, prices have fallen drastically since peaking in mid-July.
Resurgent supplies are depressing prices, but we still think users bought too actively in early summer, thereby undercutting August pork demand. Renewed buying could power a late-summer hog/pork rally.
We would view such a move as an opportunity to build short hedges.
Editor’s Note: Dan Vaught is a livestock economist for Doane Advisory Services, St. Louis, Mo. Doane distributes a number of timely, relevant newsletters to farmers that contain expert commentaries and market advice. For more information, call 314.569.2700 or go to: www.Doane.com.