For the first time, our new administration will be testing the waters on many issues with the world’s biggest nation and fastest-growing economy. President Biden’s challenges will be to encourage trade and economic cooperation while remaining vigilant regarding any military or financial threats. Commodity trade negotiations with China could be easily tangled with colossal concerns about their escapades in the South China Sea, Taiwan independence, human rights or intellectual property theft. Before talking with China, President Biden will join the “Quad,” an alliance with Australia, India and Japan. The goal of that meeting may include dealing with China’s military rise.
Pigs Fly on Swine Fever
An outbreak of African swine fever (ASF) in China sent hog prices skyrocketing midweek, even flirting with the permissible limit up on Thursday. The disease has a high mortality rate among hogs but is not contagious to humans. In 2018 ASF wiped out a considerable portion of China’s hogs and led to even more being culled to control the outbreak. Since pork is China’s primary protein source, world meat supplies and prices could see a massive impact if the disease is not contained quickly. There is no known cure for the disease, and social distancing and mask-wearing have, thus far, proved unpopular among sows and boars.
U.S. prices benefited from strong export demand for our hogs which are ASF-free. Our USDA, health departments and producers have been cautious to prevent any transmission here, as a single case could bring our exports to a screeching halt. As of noon Friday, lean hogs for delivery in April were trading at 91 cents per pound, up four cents on the week.
Wheat Pummeled as Rain Makes Grain
Winter wheat prices fell sharply midweek as drought relief arrived in our southern plains. A wide swath of exceptional drought overlapping wheat-growing regions received some rain and forecasts for rain and heavy snow on the way. May wheat traded at $6.40 per bushel near closing time, down 13 cents compared to last Friday.
Gasoline Supplies Shrink
Data released by the Department of Energy on Wednesday showed gasoline inventories decreased by a whopping 11.9 million barrels. The stall in Texas’ production continues to be felt, just as demand increases from drivers willing to take a chance on traveling now that vaccinations are proceeding in earnest. Gasoline for April delivery traded at $2.15 per gallon Friday, up 12 cents.