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Coronavirus Impacting Chinese Poultry, Eggs Stocks

Restrictions on moving livestock have paralyzed country’s supply chain

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NOPA January Crush Hits Another Record High

On Tuesday, Feb. 18th, the National Oilseed Processors Association (NOPA) released their soybean processing and soybean oil stocks levels for January.

NOPA members process 95% of the soybeans in the US.

NOPA members crushed 176.940 million bushels (MBU) of soybeans last month, up from the 174.812 MBU crushed in December and above the 171.630 MBU processed in December.

The crush rate was above the Reuters average estimate of 173.748 MBU.

Soybean oil stocks at the end of January were 2.013 billion pounds and the largest since April 2018.

The average Reuters estimate for January soybean oil stocks was 1.782 billion pounds.

January soymeal exports rose to a 15-month high of 931,061 tons, up from 902,534 tons in December and 905,923 tons in January 2019.

FBN’s Take On What It Means For The Farmer: Another month and another record crush. Fueled by an aggressive expansion of the nation’s broiler flock and hog herd we believe that end user demand for soybean meal and oil can help support local soybean basis which can be a positive for the US farmer.

Coronavirus Impacting Chinese Poultry and Eggs Stocks

China's supply of poultry and egg products has been hit as the coronavirus outbreak is severely impacting the industry.

Chinese poultry prices have fallen this year as restrictions on moving livestock have paralyzed the country’s supply chain.

The Chinese central government is prioritizing broiler and layer feeding and has released 1.32 million metric tons of corn from the strategic reserves to help stabilize supplies.

China is the world's second largest poultry producer.

China has been increasing poultry output to fill a domestic protein shortage after the African swine fever has decimated the country’s hog herd.

In December of 2019, the US started exporting poultry to China for the first time since 2015.

FBN’s Take On What It Means: It is well known that China is struggling to combat food price inflation and is trying to stabilize the domestic supplies of pork and poultry. We believe that as China attempts to stabilize their domestic protein supply chain, this can create an opportunity for enhanced US exports which can be a positive for the US farmer.

The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)

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