Trump Address to Congress Viewed as Possible Pivot Point for Hog Markets

CANADA - The Director of Risk Management with [email protected] Marketing Services says tomorrow's address by US President Donald Trump to a joint session of Congress is being viewed as a possible pivot point for North American hog markets, writes Bruce Cochrane.
calendar icon 1 March 2017
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The past week has seen considerable volatility in the hog market fuelled by the prospects of larger pork supplies and questions related to demand.

Tyler Fulton, the Director of Risk Management with [email protected] Marketing Services, says the market expects we'll be looking at three to four percent pork over the next six to eight months and, while all indications over the past six weeks or so have been that domestic demand for pork is quite good, the export side of the equation is uncertain.

Tyler [email protected] Marketing Services:

Most of the uncertainty in that comes from the possibility of some new trade and tax policy that could result in a de facto trade war with, for example, Mexico.

If that were to happen it would have very negative implications to the livestock markets, in particular to the lean hog market and I think the market has to factor in the possibility of that happening.

There's a lot of "if thens" to figure out what the scenario would be five or six months down the road but anything that leads to uncertainty in the future export trade does get factored into the market.

I think the possibility of him making an announcement when he addresses the joint session of congress, that's kind of possibly a pivot day that a lot of traders are referencing as the time for a possible announcement on a border tax or his new tax policy.

Fulton says that uncertainty is negatively biased on the demand side and is quite likely to be playing a factor in the weakness that we've been seeing.

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