The recent USDA report on farmer planting intentions served only to confuse the market with corn acreages exceeding expectations and soya planting far below the projected area. Industry analysts are not convinced and the market has now switched its focus to European crops and the issues around heat and drought.

The impact of the torrential rains on maize plantings and subsequent crop development in the US has served to firm up maize prices. It is no longer the bargain basement for grain buyers as wheat prices have eased back on favourable crop reports throughout the world and expectations of a record harvest.  

From the local perspective feed formulators are happy to see maize and wheat going into rations at the same price and offering more opportunities to achieve the optimum balance of starch sources.

The swine flu epidemic in China and Eastern Asia has led to a major cull of the pig herd and has reduced the demand for feed materials in this region
The swine flu epidemic in China and Eastern Asia has led to a major cull of the pig herd and has reduced the demand for feed materials in this region

Another major element of uncertainty is the African Swine Fever (ASF) epidemic and  the impact this may have on feed demand in China and Eastern Asia. China accounts for half of the worlds pork production and it is the most popular meat in that part of the world.

Reports vary widely as to the numbers lost with some observers suggesting that as many as half of China's breeding pigs have either died from African swine fever or been slaughtered because of the spreading disease, while the officially published figures report a loss of 24% in sow numbers compared with a year ago.

Either way, the plunge in the number of sows is poised to leave a large hole in the supply of the country's favourite meat, pushing up food prices and devastating livelihoods in a rural economy that includes 40 million pig farmers.

Losses are not only from infected pigs dying or being culled, but also farmers sending pigs to market early when the disease is discovered nearby. This has helped keep up the supplies of pigmeat and analysts say it has kept a lid on pork prices in recent months.

However prices have begun to rise substantially and China's agricultural ministry has said they could surge by 70 percent in coming months as supplies run down. This may create opportunities for growth in the regions unaffected by ASF and will strengthen global pigmeat prices as China has to seek out new supply chains. 

The effect on China’s feed requirement will be felt at a global level as the demand for grains falls in line with the shrinking pig herd. Increased pig production in Europe and the USA will compensate to some extent depending on the ability of President Trump to find a solution to the ongoing trade dispute between China and USA. India may also see gains having seen significant increases in pork production in 2018 thanks to the growth of industrialized farming and increased domestic feed milling. Feed production across all species jumped 13% in India in 2018.