First off, weekly pork exports were excellent with sales of 24,400 MT and shipments of 26,400 MT. China did not buy any pork last week but took 12% of the shipments. So they just paid a 50% tariff on 3,400 MT of U.S. pork. We get monthly export data tomorrow. We’ve already heard and reported that Dec pork exports were very solid. I’ve not seen the data yet but it appears that pork exports for 2018, despite tariffs from Mexico and China, were down only a half of a percent compared to 2017. We are expecting exports to soar higher this year. Today we heard that the Chinese government is buying 200,000 MT of Chinese pork and placing into the reserve. There is currently a glut of pork as producers liquidate numbers in panic fashion.

I thought today’s action in the bull spread and the sharp recovery away from the session lows in the summer hogs into the close was rather significant. Hog futures appear to be anticipating something that’s not on the radar just yet. Most likely this is demand or increasing demand. We need to see old fashioned strength in cash hog prices and in pork cutout values before futures are going to rip higher. The monthly cold storage was not bearish. Perhaps demand is better than we realize? After a year of record large production in 2018, end of Jan pork stocks reside 3% lower than one year ago. Ham stocks are down 5%, despite tariffs by Mexico, with loin stocks down 14% and butt stocks down 20%. Belly stocks are up 23% and sparerib stocks are up 11%. The loin and butt figures are by far the most impressive. Low prices cure low prices.

The above was part of what I just received on the evening wire. I feel better about the market now than I did at noon, which means absolutely nothing as I am often wrong!! I believe the biggest concern is ASF hitting North America some place in the near future. If we miss it for 8 or 9 months, I will take a break!!
Dewey