Traders looking at a side of pork
The World Trade Organization again sided with Canada and Mexico in their complaint against our Country of Origin Labeling law.
Their producers argued that the law serves as a barrier to their live animal exports to the United States more than any consumer awareness issue. The United States has to choose to either remove the law or keep it on the books and accept trade sanctions from these two countries.
This is a problem for pork as we rely more heavily on exports than we do in beef. In addition, these two countries took 42% of our exports in March. Out of our 440 million in exports in March, Mexico accepted 135 million while Canada took 51.
While this WTO news could be bearish by itself, it also comes at a normally bearish time of year anyway. Packers are bidding for a holiday reduced kill next week. The trade remains concerned that pork will play only a side role in next weekend’s meat purchases.
We are neutral to futures now that our $84 objective has been reached. It is likely we may see a correction down to the $80 level before posting a rebound into the June expiration.