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Blog by Keith Good, University of Illinois

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Bloomberg writers Andy Hoffman and Vanessa Dezem reported this week that, "Two of the world's top agricultural traders said crop markets are in a 'mini-supercycle' that could last half a decade, driven by increased demand for biofuels and continued grains buying from China.

"The high prices could last for two to four years, said Sanfeliu. Rising demand for biofuels will drive a massive jump in vegetable oil and waste feed stock demand of 15 million to 16 million tons over the next five years."

The Bloomberg article noted that, "After spiking in 2020 and 2021, growth in China's corn demand will likely slow to 1% to 2% a year, the Cargill executive said.

"David Mattiske, chief executive officer of Viterra, Glencore Plc's food-trading arm, agreed agricultural markets are in a mini-supercycle, with strong demand for plant-based fuels and grains lasting four to five years."

Meanwhile, after recent news articles pointed to lower hog prices in China, Reuters writer Dominique Patton reported this week that, "China's pig herd rose 23.5% in May from a year earlier, state media said on Wednesday citing the Ministry of Agriculture and Rural Affairs.

"The sow herd increased 19.3% during the same period, according to the CCTV report, reaching 98.4% of the stocks at the end of 2017."

The Reuters article added that, "'We can now say with complete confidence that the original three-year mission for the restoration of pig production has been completed ahead of schedule,' Xin Guochang, an official with the agricultural ministry's Animal Husbandry and Veterinary Bureau told CCTV."

And Reuters writer Julie Ingwersen reported this week that, "Chicago Mercantile Exchange (CME) lean hog futures fell their daily 3-cent limit on Wednesday, pressured by falling U.S. wholesale prices for pork products and news of increasing hog numbers in China, traders said.

"China's pig herd rose 23.5% in May from a year earlier, state media said on Wednesday, citing the Ministry of Agriculture and Rural Affairs."

In a closer look at U.S. feed grain export variables, the USDA's Foreign Agricultural Service (FAS) released a report on Wednesday stating that, "Sharply lower second-crop corn supplies in Brazil and continued strong foreign demand have brightened U.S. [corn] export prospects for 2020/21 (Oct-Sep). Exports are currently forecast at 73.0 million tons (estimated value of $17.9 billion), which if realized, would be the largest in history."

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