As I write this, we have a positive basis of +$10.00! I do not know if I have ever seen that for this time of year. When I was a hog buyer, I charted that basis, it was a predictable tool to indicate market direction. When actual basis has the cash price higher than the futures, they will come together.
What will give?
In my opinion, information out of China that they have an oversupply of pork and drove their domestic hog price down caused the American futures to fall in sympathy. By the way, China is not being factual in that news release. So, fundamentally what will bring the basis together? Well, we only have the facts:
- PRRS 144 is a real problem. This is not a PRRS variant that the vets are able to…