north central Ohio | Chief Illiniwek - 6/1/2020 18:25
That I have no idea what it means when china cancels a purchase. I just saw that they cancelled a lot of their pork purchases. What is the mechanism in which those purchases were made? Who is left holding the bag when they are cancelled? Because here's how I see it: if those purchases are made through a board of trade contract, how are they cancelled? Or is it just a "handshake" agreement with some kind of exporter who is now left holding the bag? And at this point, if you're an exporter, wouldn't you demand cash at time of purchase? I mean if I sell seed to a guy and he only takes it half the time and the other half the time he sticks me with it, I'm not going to do business with him anymore until I have cash in hand?
Or are these "purchases" just China saying they plan to make purchases and then deciding not to? In which case why would they do that? They'd just always pay more then if they'd just kept their mouth shut and bought on the board when they were ready?
This is a good question that got side track to grain cancellations. Pork is not stored like grain. There is only so much cold storage and meat moves rapidly from packer to end user even if China. Makes you wonder what is actually getting canceled. I wouldn’t think sourcing pork from other sources would be nearly as easy as grain which is readily available many places. Good question to ask at a marketing meeting someday. Sorry I have no clue.
Edited by pigfarmer82 6/2/2020 22:32
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Help me out, because I'm ashamed to admit...
