CI April 15, 2017

OPENING SHOT

The March 30 USDA Hogs and Pigs Report did not show any expansion in sow numbers since December, despite speculation that it would in response to pork demand signals domestically and internationally. Total number of slaughter pigs is increasing, but that's more to do with good health and improved sow productivity. We are hearing about increasing challenges with mycoplasma hyosynoviae and hyorhinis in finishing pigs which can lead to a spike in late finishing mortality. But it's too early to know if it will be of significance to total pork supply numbers.

PLANTING PROGRESS

#Plant17 is trending on Twitter and planters are running hard in IL...

Even in North Dakota...

Meanwhile, in TX it's already knee-high...

The April 10 USDA reports indicate we are trailing 2016 and the four year (2012-16) average in spring wheat, and oats. Corn is right at average and sorghum is ahead, due largely to progress in Texas and Louisiana. 

 Source:  USDA

Source:  USDA

NEW DEMAND FOR SOYBEANS

More tuna may be raised on soybeans, thanks to some recent breakthroughs in fish nutrition funded by the Illinois Soybean Assn.  The research by Ichthus Unlimited tested various soy-based diets for use on bluefin tuna, one of the world's most sought-after fish. Bluefin are normally fed wild-caught sardines and average a feed conversion ratio (FCR) of 28:1. The new soybean-based diet decreases the FCR to 4:1 and decreases the amount of fishmeal and fish oil in feed by tenfold. One of the key advantages of soybean feed is that it floats, reducing waste significantly.

COMMODITY INDEXES A BAD PLAY LONG-TERM

Adopting a "buy-and-hold" strategy may work with a stock-based index, but it's definitely not working with commodity-based index funds. Witness the 5-year performance of the Bloomberg (top) and Dow Jones-UBS commodity funds. Likely a lot to do with increased volatility and difficulty in predicting market moves. 

As usual, we welcome feedback: dryder@lumenitix.com or DM on Twitter: @lumenitix