How Chinese Buying Is Causing a Boom in Agricultural Commodities
Odd Lots
Bloomberg
4.5 • 2K Ratings
🗓️ 25 February 2021
⏱️ 40 minutes
🧾️ Download transcript
Summary
There are lots of hot areas in the market, which everybody knows. Stocks are obviously hot, as are industrial commodities like copper. Agricultural commodities are surging as well. If you look at a chart of corn or soy or even oats, they've been on a tear. One big factor: Chinese demand, in part driven by a desire to stock up on supplies. Meanwhile, China is launching agricultural futures of its own, including a new contract on hogs. On this episode, we speak about what's going on right now in agricultural commodities with Scott Irwin, an economist at the University of Illinois, who helps us break it all down.
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| 0:30.0 | Hello and welcome to another episode of the Adlots podcast. I'm Tracy Alloway. |
| 1:00.0 | And I'm Joe Weisenthal. So Joe, I know there's been a lot going on this year. |
| 1:05.6 | You know, we obviously have a new US president. We had the game stop saga in markets, |
| 1:11.6 | but I think we can all agree that the big news of 2021 has been that China's new |
| 1:18.8 | live hog futures started trading. Yeah, I mean, that's obviously what I was going to say as well. |
| 1:24.3 | I mean, that's, you know, that's sort of the big thing that everyone is talking about so far this |
| 1:29.8 | Yeah. Okay. So clearly we are joking, but I will say these new futures contracts were |
| 1:35.5 | something like 20 years in the making. So they took a really long time to get here. |
| 1:42.0 | One of the reasons that China is so interested in starting futures contracts for |
| 1:47.3 | pork is because they've basically had their pigs supply absolutely decimated in recent |
| 1:52.4 | years by African swine fever. So the whole idea is that the futures contract will come in. |
| 1:57.9 | It'll allow some standardization of pigs, and it will allow farmers to hedge and things like |
| 2:03.0 | that, and they'll be able to rebuild their pork supply. |
| 2:08.8 | Standardization of pigs. I'm very intrigued by this. |
| 2:15.4 | Yes. Okay. Welcome to agricultural outlets. So we're going to be talking about the |
| 2:20.0 | pig futures contract, but we're going to be talking about food price inflation more generally, |
| 2:24.8 | because of course we've seen pork prices in China absolutely surge recently. |
| 2:30.5 | It's starting to come down now, but globally as you know, Joe, there's been a massive rise in food |
| 2:36.6 | prices. Yeah. And I would say if I were to actually from an ecosystem point, if I were to say what |
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