Here now with Arlan Sudirman of INTLFC Stone. Arlan, let's talk about China. We're hearing that possibly we may see the administration sign a deal, the phase one of the deal, in November. Okay, so let's start off with the bad news. What if we don't see that deal sign?
"Well, I think we'll see the market skepticism really come back hot and heavy right now they're a little bit nervous about building shorts just in case it does come through, but they'd be willing to double down on their short positions if it doesn't."
Okay, so let's say we do see this deal sign that the pen is in paper, the ink is there. What do you think this sets the stage for?
"Well, the market still wants the shipments sales. Yes, but shipments that's what it really wants to see. 40 to 50 billion is probably President Trump sales personality, doing his sales job. It's going to be hard to hit that without higher prices. But low and behold, if we do get the demand prices would be expected to go up. The biggest we've seen before is north of 29 billion. It is possible with all Pork, potentially beef and poultry we sell to hit that, but probably not that high. It's still positive still good."
But we're still seeing China book sales from Brazil too. So it's not like it's just us right now. They're still playing in that Brazil sandbox heavily.
"Well, the private buyers, they still have to pay the tariffs. So they're going to Brazil, the state buyers are the ones going to have to buy from us until the tariffs are removed. That's what's been doing most of the buying today."
But real quick with the trade negotiations. Do you feel like the tone changed in the last round?
"Absolutely. I see a difference inside of China indicating with African swine favor creating a meat crisis. And with the pro democracy demonstrations in Hong Kong, and the slowing economy they want to deal."