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Re: The final Purchase Index for - - -

Hello DH, The following is part of what I received from Dennis just now. Also I will tell you about my day today! Bought 15 hogs and sold 95, all offsets. It was a very good day!!

What to Expect?
The best play in hogs at this moment is adding to the bull call spreads in the May hogs. Our liquidation trigger target of 100.50 remains in place to liquidate June calls. Our long term upside target in summer hogs is 12000. Frankly, the table is set for a much higher target than 12000.

Weekly pork export data was robust with sales pegged at 40,300 MT of which China and Hong Kong took 28,300. Mexico was in for 4,000 which was very positive in that they were noticeably absent last week. This is the 5th largest weekly pork sale to China on record….and futures acted disappointed. Monthly data was released as well showing Feb pork exports down 8%. Folks, the world has completely changed since Feb. Anyone selling futures because of this information (Feb exports), well, I almost feel sorry for them. Pork shipments will become the focus of the trade (already has) with 24,700 MT shipped last week. Of this 4,300 went to China. These numbers need to and should expand dramatically down the road. I’m assuming this will occur when the tariffs on U.S. pork are dropped. Exactly when this happens I can’t say.

The situation in China is long term bullish because ASF continues to spread and because massive numbers of breeding stock have been culled. (see the chart in last night’s wire) The pork trade gap is going to be enormous. Some project a gap of 8.0 to 10.0 million tones. How large is this…what does this mean? For perspective, total U.S. pork exports in 2018 equaled 2.437 million tones. World pork exports last year did not equal 10 million tones. In other words, if Brazil, Canada, the U.S. and EU only shipped pork to China, this year, it would not equal 10 million tones. So what we are grappling with here is a whole new animal, something the world has never tackled before. Exactly how it unfolds we’re not sure. But the longevity of the situation and the size of the protein gap will lift all protein items higher in the months to come. Of course, this is dependent upon the U.S. herd remaining disease free.

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The final Purchase Index for - - -
Re: The final Purchase Index for - - -