SPRINGFIELD, Ill. — No news isn’t necessarily good news.
Marketing experts at the Illinois Pork Expo in Springfield Jan. 29 said it is good that USDA information has started to flow again, but acknowledged it will be a slow process getting export figures and other data caught up.
At the same time, uncertainty continues for U.S.-China trade talks, with a March deadline looming when tariffs resume.
“Any market doesn’t like uncertainty,” said Chip Nellinger, co-founder of Blue Reef Agri-Marketing based in Morton, Illinois.
As the reports start flowing after the partial U.S. government shutdown, there is a “huge amount to digest,” said the commodity market analyst.
When marketing experts took the stage at the expo the day before the anticipated U.S.-China talks resumed, there was still uncertainty if the talks would affect markets in a positive or negative light — in both the short-term and long run.
There may be a nice rally on the grain market with positive U.S. China trade talks, but it may be “short-lived” Nellinger said.
Brian Basting, commodity research analyst for Advanced Trading in Bloomington, Illinois, said that even if the U.S. and China start to reach agreements, “it is a long process.”
Alan Brugler, president of Brugler Marketing based in Omaha, Nebraska, cautioned not to expect any kind of a deal this week.
“It’s not a given that there will be a trade deal,” he said, because intellectual property and theft issues are not resolved.
A “win” for producers is that they continue to keep talking, Brugler said.
Talks concluded Jan. 31 on that hopeful note, with China, the world’s largest buyer of soybeans, expected to keep purchasing U.S. supplies as trade negotiations between the two countries continue, President Donald Trump said from the Oval Office.
“They started on a smaller scale, and today they’re starting very big, and I very much appreciate that,” Trump said. “It’s a fantastic sign of faith.”
China is expected to purchase 5 million tons of U.S. soybeans, Trump said, according to Bloomberg News. That would be on top of the estimated 5 million bought in the weeks after Trump met with his counterpart Xi Jinping in December in Argentina.
Marketers continue to watch the weather in Brazil, but Nellinger said that with a large carryover of grains, there would need to be a huge change in Brazilian production to really grab attention.
Some producers were hoping for a drought in Brazil and lower production.
“Hope makes a lousy marketing plan,” Brugler said.
Meanwhile in North America, Nellinger said the brutal cold temperatures in the Midwest may raise the floor for cattle prices.
“The cash market my benefit for several weeks,” he said.
There may be some potential to export pork as a result of African swine fever’s spread. It’s been reported that more than 1 million head have died or been liquidated in China, Brugler said. That could be a positive for producers here, but the negative would be if the disease were to come to the U.S. and hurt exports.
For corn, Basting said, “think about risk management on the old corn crop.”
There is a big risk on soybeans with uncertain global demand and a large carryover.
“We’ve just got piles of beans right now,” he said.
Nellinger also advised against setting $10 beans as the goal in a marketing plan.
“I wouldn’t hold out for it,” he said. Instead, be disciplined and look for opportunity.