Preliminary buying interest could start to
surface in part of feedlot country at midweek. Yet significant trade
volume may be delayed until Thursday or Friday. Market watchers will be
focusing on Wednesday's FCE. Our guess is that showlists will be
initially priced around $134 to $135 in the South and $15 plus in the
North. Live and feeder futures should open moderately higher, supported
by residual buying interest and cash premiums.
Hog buyers seem set to resume business at
midweek with steady/firm bids. Lean futures are likely to open higher
thanks to follow-through buying and more bottom-building interest.
| BULL SIDE | BEAR SIDE | ||
| 1) | Live and feeder futures quickly recovered on Tuesday, erasing much of Monday's crash and placing bullish psychology and cash expectations back in the saddle. | 1) | While Tuesday's recovery in cattle futures was encouraging, the deferred live months failed to close the early-week gaps and actively-traded June settled short of Monday's high. |
| 2) |
Beef cutouts closed solidly higher
Tuesday with box movement once again described as "moderate to fairly
good." The spring calendar remains inviting to seasonal strong beef
demand for at least another two to four weeks.
|
2) | Furthermore, deferred live cattle contracts have failed to keep pace with gains in the spot month and skepticism regarding sustained futures strength has escalated amid prospects for renewed cash weakness, looming larger fed cattle supplies and the impending large index roll. |
| 3) | Lean hog contracts rocketed higher Tuesday with summer charts now trying hard to make a seasonal bottom. Despite expectations of large hog supplies in the months ahead, firmer cash hog trade along with renewed prospects of strong exports in the coming months supported the market. | 3) | Tuesday's rally in hog futures was an exciting change of pace, but the move was inconclusive at best. The trend in the market remains negative. The June contract is still trading below the low point of trading over the most recent five-year average and the June/August spread is modestly wider than normal. |
| 4) | The fact that the cash hog market so far this week seems to be slowly firming may suggest packers sense a tightening of numbers in the weeks ahead. | 4) | The pork carcass value retreated further on Tuesday, checked by softer demand for bellies and loins. |
OTHER MARKET SENSITIVE NEWS
CATTLE:(USA WEDNESDAY) -- The expansion of its
all-day breakfast menu and a Big Mac promotional campaign helped lift
McDonald's to better-than-expected revenue and profit in the first
quarter.
The fast-food chain edged expectations as it
faces pressure to bolster its business amid stiff competition from
fast-casual rivals and lower grocery costs.
Aiming for a turnaround, sales at U.S.
restaurants open at least a year rose 1.7% in the first quarter.
Globally, comparable sales rose 4%.
"Our efforts to build a better McDonald's are
yielding meaningful results with continued positive momentum and a
strong start to 2017 that includes positive comparable sales across all
segments, higher global guest counts and enhanced profitability," McD's
CEO Steve Easterbrook said Tuesday in a statement.
"There's a sense of urgency across the business
as we take actions to retain existing customers, regain lapsed customers
and convert casual customers to committed customers."
The company's recent decision to add more
products to its all-day breakfast menu is paying dividends. It also
attributed the quarter's momentum in part to new Big Mac products and
beverage discounts.
McDonald's stock rose 2.4% in pre-market trading Tuesday to $137.48.
The company recorded revenue of $5.68 billion
for the quarter, beating S&P Global Market Intelligence estimates of
$5.53 billion. That was down 3.9% from a year earlier, but McDonald's
said the decline was largely attributable to the company's effort to
turn certain company-owned locations into franchises.
McDonald's posted net income of $1.21 billion, up 8% and beating S&P Global Market Intelligence estimates of $1.11 billion.
HOGS: (hoosieragWednesday.com) -- The key U.S.
Senator blocking a bilateral trade deal with Taiwan for years is
dropping his long-held insistence Taiwan first end its ban on
ractopamine-treated U.S. pork, before talks can begin. For years, Iowa
Senator Chuck Grassley went to bat for the pork industry on the
meat-leanness additive, ractopamine. He urged the Bush and Obama
Administrations not to reward Taiwan with free trade negotiations if it
didn't first end its ban on U.S. pork treated with the additive. But
that was before the Trans-Pacific Partnership Agreement.
"Maybe sometimes if you go back before the TPP,
maybe I said it ought to be a precondition, but then we already have
agreements with some of these countries and I think if you're going to
change those agreements that there can't be preexisting conditions in
order to have good faith negotiations," Grassley said.
There's no doubt Taiwan will still have to end
its pork ban in a U.S. trade deal, but Grassley abandoning his long-held
position may now hasten such a deal and get the U.S. industry the
relief it wants. But National Pork Producers Council Spokesman Dave
Warner says NPPC disagrees with the new-approach.
"And it doesn't make any sense to enter
negotiations when they're not going to science on these issues," Warner
said. "Once they agree to do that then we start the talks."
But Warner says the bottom line is that
non-tariff sanitary trade barriers must end, even if done as part of a
trade deal with other countries.
"We're going to eliminate those non
science-based issues in those other countries. The United States abides
by science, and we want our trading partners to do the same."
And there are lots of such restrictions, from
China's US beef ban, now supposed to be coming off, to Europe's
effective ban on many U.S. GMO crops.
No comments:
Post a Comment