<\/p>\n<\/a>Livestock<\/u> –
\nBy now you\u2019ve likely heard China has lifted its ban on Brazilian meat products.\u00a0 The devil is in the details, however.\u00a0 While the straight ban on Brazilian imports is lifted China is still not allowing meat from 21 plants still under investigation.\u00a0 So yes, while this is certainly a good restart for Brazil there are still some hurdles to clear.\u00a0 Note China (and Hong Kong) are the biggest export market for Brazilian beef.\u00a0 Restrictions have been lifted by Chile and Egypt as well, both with similar restrictions on the specific plants.<\/p>\n
This good news for Brazil probably will have a greater market impact than Friday\u2019s Cattle on Feed report.\u00a0 The headline figures came out pretty much as expected and looking at the numbers again this morning I\u2019m finding it difficult find something of substance to point out.\u00a0 One could make an argument that we\u2019re pulling ahead cattle right now at these current kill rates, but one might also argue packers are going to have a hard time finding a home for all this beef in the near future.\u00a0 Spot boxes have rolled over here and it\u2019ll be interesting to see how far they fall.\u00a0 Packer margins have been pretty stout, supporting the strong kill rates.\u00a0 We\u2019ll see how long this continues.<\/p>\n
Friday\u2019s COT numbers are a bit interesting.\u00a0 The MM position in cattle is not a record large, but it is certainly \u201celevated\u201d and you can see the surge in just the past week.\u00a0 How much of that might be due to the Brazilian storyline?\u00a0 How much is LC-LH spreading?\u00a0 Again, while not a record this is still a massive spec position that we need to watch carefully.<\/p>\n
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