China has ramped up inspections of pork shipped from the United States, importers and industry sources said, the latest American product to be hit by a potentially costly slowdown at Chinese ports in the past couple of weeks.

Some trade experts said they believe Beijing is sending a defiant warning to Washington in response to sweeping U.S. trade demands made on China last week.

The stepped-up checks have even hit China’s WH Group Ltd. (0288.HK), the world’s largest pork company and owner of Smithfield Foods in the United States, and come amid increasing scrutiny of other U.S. farm goods, including fruit and logs.

Ports are opening and inspecting every cargo that arrives, said Luis Chein, a director at WH Group, China’s top importer of U.S. pork.

Corn analysis

Corn closed the week $.09 1/4 lower. Last week, private exporters did not announce any private sales. Weekly export sales of corn showed a total of 30.9 mb (785,600 mt) with 27.4 mb (695,600 mt) for the 2017-2018 marketing year. This put total marketing year sales at 2.033 bb, 1 percent less than the previous marketing year. In the weekly crop progress report, U.S. corn planting reached 39 percent complete versus 37 percent expected, up from 17 percent last week and slightly behind 45 percent last year and 44 percent average.

The central corn belt made huge progress, but the north remains very slow due to wet conditions. In the weekly EIA report, weekly ethanol production rose 8,000bpd to 1.040 million bpd, for a second consecutive increase. Ethanol stocks saw a drawdown and stand at 22 million barrels. The monthly WASDE report was friendly for corn as the USDA left the 2017/18 balance sheet unchanged and forecast a projected carryout for 2018/19 of 1.682 bb.

This figure was slightly above estimates, however if realized, this would be the largest year on year reduction since 2009/10. The most friendly corn stat may have been the 2018/19 world carryout estimate of 159.15 mmt, down 35.7 mmt from a year ago.

USDA estimated Brazil production at 87mmt in 2017/18 and 97 mmt in 2018/19. China’s 2018/19 carryout is now estimated at 60.5 mmt, down from 100.71 mmt in 2016/17.

Strategy and outlook

As producers get planters out of their sheds and begin seeding the 2018 crop, look to either make sales and reown with call options or buy puts to establish a price floor.

Soybeans analysis

Soybeans closed the week $.34 1/2 lower. Last week, private exporters did not announce any private sales.

Weekly export sales of soybeans showed a total of 23.2 mb (632,600 mt) with 13.0 mb (354,300 mt) for the 2017-2018 marketing year. This put total marketing year sales at 2.026 bb, 3 percent less than the previous marketing year. U.S. soybean planting is 15 percent complete versus 14 percent expected, up from 5 percent last week, actually ahead of 13 percent last year and 13 percent average.

In the monthly WASDE report, the USDA surprised soybean traders by estimating 2018/19 carryout at 415 mb, compared to pre report estimates 529 mb. Lower carryin figures combined with 215 mb larger exports compared to 2017/18, provided for the lower carryover stocks estimate.

On the global balance sheet, the 2018/19 world carryout of 86.70 mmt compares to the 2017/18 of 92.16 mmt.

Strategy and outlook

As producers get planters out of their sheds and begin seeding the 2018 crop, look to either make sales and reown with call options or buy puts to establish a price floor.

This material has been prepared by a sales or trading employee or agent of Midwest Market Solutions and is, or is in the nature of, a solicitation. This material is not a research report prepared by Midwest Market Solution’s Research Department. The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that Midwest Market Solutions believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such.

Brian Hoops can be reached at (605) 660-1155.