We could be wrong, but. We assume both buyers and sellers in cattle country will try hard today to wrap up weekly marketing chores, allowing all to break for the long holiday weekend. Look for opening bids around $125 in the South and $196-200 in the North. Feedlot managers will continue to shake them off, at least initially insisting on asking prices of $128-130 in the South and $205-plus in the North. Live and feeder futures are expected to open moderately higher thanks to follow-through buying and ideas of further cash premiums.
Negotiated dressed sales in hog country at midweek was huge with more than 16,000 barrows and gilts reported. The weighted average prices was lower, but not by that much. Are we getting closer to the point where packers will be forced to shop more aggressively to ready numbers? Maybe. But the jury remains out. Cash bids this morning will range from steady to $1 lower. Look for lean futures to open moderately lower, pressured by moderate selling and long liquidation.
| BULL SIDE | BEAR SIDE | ||
| 1) | Live and feeder futures rocketed to new highs on Tuesday, powered by groCattle futures remained hot on Wednesday with early spring bulls once again scoring a large serving of new contract highs. By closing over 124, spot April live is now essentially at par with last week's 5-area seer average. This represents the weakest basis seen in months, a reality that should help support the selling resolve of feedlot managers.wing cash optimism and renewed technical bullishness. | 1) | While a few hopeful signs have surfaced, the reopening of China for U.S. beef exports is far, far from a done deal. Even if the concept continues to run green light, it sounds as if China may still insist on some kind of ID system from American beef production to insure product under 30 months of age. |
| 2) | Advanced boxed beef sales (i.e., with 22-delivery or more) continue to roll and on (i.e., totaling over 1,100 loads last week for the fourth-consecutive week). Such a fat order will necessitate aggressive chain speed over the next 30 days or more. | 2) | For the week ending April 8, U.S. hatcheries set 223 million broiler eggs, up 3 percent from a year ago. At the same time, chicks placed totaled 182 million chicks, up 1 percent from 2016. |
| 3) | If a significant second quarter rally in cattle futures is truly unfolding, lean hog futures should have an easier time in finding a reliable bottom over the next several weeks or so. | 3) | The pork carcass value slipped still lower on Wednesday with all primals quoted lower except the belly. |
| 4) | While there is much disagreement about the strength of pork demand in the quarter ahead, virtually all agree that current summer values will prove to be too low should domestic and export demand remain as strong in the spring as it has so far this year. | 4) | Summer lean hog futures closed sharply lower on Wednesday, perhaps positioning to take out last week's lows before exiting for the long weekend. Unlike recent strength in cattle paper, short-term rallies here look like nothing more than dead cat bounces. |
OTHER MARKET SENSITIVE NEWS
CATTLE: (Feedstuffs) -- The U.S. Meat Export Federation (USMEF) reported that U.S. beef has gained expanded access to Thailand now that bovine spongiform encephalopathy-related import restrictions have been lifted.
Joel Haggard, USMEF senior vice president for the Asia Pacific, said boneless and bone-in beef cuts from cattle of all ages are now eligible for export to Thailand, provided that the cattle are processed on or after April 1. Previously, only boneless cuts derived from cattle under 30 months of age were eligible.
Haggard noted that while Thailand will remain a small destination for U.S. beef — exports to Thailand last year totaled about $3 million — the new import regulations will generate more interest in the market from U.S. exporters.
"Thailand still imposes some of the highest import duties on beef of any import market. Like other Asian markets, we compete in the premium segment with Australian product that enjoys some preferential access there under a free trade deal. So, the market is likely to remain a small one for U.S. exporters," he said.
As a world-class foodie destination, however, Haggard said a number of foodservice and retail operators in Thailand do want to feature American beef. "Importers are already sending pricing inquiries to our exporters for items such as bone-in short ribs and prime ribs," he noted.
USMEF said efforts to gain full access for U.S. beef in Thailand are not yet complete, as beef variety meat and offal items remain ineligible. As such, the organization is seeking clarification on the eligibility of processed beef products.
HOGS: (porknetwork.com) -- U.S. pork producers are in a state of flux, not knowing what the future holds in terms of market access. This unrest couldn't come at a worse time. With a glut of pigs, export markets are critical to producers' bottom lines. Bill Even, CEO of the National Pork Board, says exports need to go even higher in the future to assure pork industry success. He considers trade disruption one of the biggest threats facing the industry.
"We're part of an inter-connected global system," Even says. "That's been coming since after WWII and it's a reality."When there are trade wars or retaliation, agriculture is one of the poker chips that gets played pretty quickly, he says, because ag has a positive balance of trade in the U.S. and U.S. pork has contributed to that positive trade balance.
As expected, the Trans-Pacific Partnership met a quick demise when Donald Trump became president. And the "renegotiation" of the North American Free Trade Agreement (NAFTA) will begin soon.
"U.S. exports of pork and pork products have increased by 1,550% in value and almost 1,300% in volume since 1989, the year the U.S. implemented its first free trade agreement -- with Canada -- and started opening international markets for value-added ag products," the National Pork Producers Council (NPPC) wrote in an issue paper. "Opening and expanding access to markets through free trade agreements is paramount to the continued success of the U.S. pork industry."
Last year, the big driver was Mexico, says Steve Meyer, Vice President at EMI Analytics. It was up 23% last year, compared to 2015. Japan (at 21%), Korea (at 1%) and other markets (at 41%) also contributed to export growth in 2016, he says.
Commerce Secretary Wilbur Ross expects talks on modernizing NAFTA to begin later this year, NPPC says. "The Trump administration's priorities in negotiations with Canada and (mostly) Mexico likely will include addressing the U.S. trade deficit, adding new regulations on services and the digital economy and tightening rules of origin. NPPC has said that any redone NAFTA deal must not disrupt U.S. pork exports to the pork industry's No. 2 (Mexico) and No. 4 (Canada) markets."
Last year, the U.S. pork industry shipped nearly $1.4 billion of pork to Mexico and almost $800 million to Canada. The organization will insist that tariffs on North American pork trade remain at zero.
While the U.S. figures out how NAFTA will look in the future, the EU is aggressively developing its own trade relationships. Last month EU Trade Commissioner Cecilia Malmström and New Zealand Trade Minister Todd McClay met in Brussels, Belgium, to conclude preliminary discussions on a free trade agreement (FTA). Malmström also visited the Philippines to discuss trade relations and to advance plans for a region-to-region FTA between the EU and the 10-nation ASEAN. The EU already has concluded agreements with Vietnam and Singapore.John Harrington can be reached at feelofthemarket@yahoo.com
No comments:
Post a Comment