Friday and the markets look like they could be headed lower to finish the week.
China reported an outbreak of African swine fever in the southern province of Guangdong – the country’s first reported cases of the deadly disease in almost three months. African swine fever ravaged the pig herd in China, the world’s top pork consumer, after the first outbreak in mid-2018, killing millions of hogs. The industry has recovered, however, with the herd growing by 31% year-on-year to 406.5 million heads by the end of 2020. The Guangdong outbreak occurred on a farm in a county with 1,015 pigs, killing 214 of them, the Ministry of Agriculture and Rural Affairs said in a statement, adding that illegal transportation was the suspected cause.
Fear of covid and a change in relations with China has set the market on its heels. New entrants into the long side of the market are in for a tough day, as the market is going to make them pay to play. For whatever reason the corn market has not broken very much compared to beans and the funds have not sold a lot of corn position recently, but it may be time.
Producers should not panic but the bullish mentality in the market is most likely not going to remain. There are too many things at play for the markets to continue to move higher.
With the funds extremely long, Covid concern around the world, African Swine flu and better South American weather I could see the markets close considerably lower.
Have a Great Weekend!