China Asking Companies to Produce Hogs Outside Country
China is encouraging companies to build hog farms overseas to help fill a severe domestic shortage after African swine fever (ASF) has slashed the size of its hog herd.
China is urging domestic firms to build hog farms in countries where hogs and pork are eligible to be exported back to China.
China has been taking various measures to boost hog production and increase pork supplies.
Three new cases of ASF were reported in China last week.
FBN’s Take On What It Means: We believe that China’s asking hog producers to build production facilities in other countries specifically to export back to China is a clear indication that ASF remains a concern. At the moment this feels like a positive for the US hog producer but a negative for US soybean exports. If China’s hog herd is not growing because ASF is not in control we think it could be a while before soybean import demand materially accelerates.
NOPA: Record Soybean Crush In February
According to the National Oilseed Processors Association (NOPA), the US soybean crush in February topped analyst forecasts and hit the highest level on record for the month.
NOPA members processed 166.288 million bushels (MBU) of soybeans in February.
The 166.288 MBU is down from the 176.9 MBU crushed in January, an all-time high for any month, and is up from the February 2019 crush of 154.498 million bushels.
NOPA members handle about 95% of all soybeans crushed in the US.
The crush was supported by solid domestic demand for soybean meal and by additional crush capacity that came on line in Michigan.
Soybean oil stocks at the end of February were below all trade estimates at 1.922 billion pounds.
This was the first monthly decline in four months.
FBN’s Take On What It Means: We believe that the NOPA figures are a bright spot for the struggling soybean complex. It is widely known that domestic demand for soybean meal is positive but we also find that Argentina’s raising the export tax on soybean meal exports could also have helped support the US crush pace during the month.
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