The cash trade in cattle country should typically start out in low gear. Of course, that means activity will be limited to the distribution of new showlists. We expect ready numbers should be generally larger than last week. While feedlot managers are likely to keep their powder dry for several days, initial asking prices will probably be around $138 to $140 in the South and $220 to $222 plus in the North. Monday is first notice for spot June live cattle. Needless to say, the tall premium status of the feedlot traded essentially precludes any delivery interest. Live and feeder futures should open on a mixed basis with nearby live issues best supported by recent country business.
Look for the cash hog market to open with bids ranging from steady to $1 higher. While slaughter levels do typically tighten this time of year, hog kills are still well above year-ago levels. With eight more trading days left on the June contract, it easily would be possible to close that $5 gap between the cash index and the board, many still wonder if packers will have to push the price that high to get needed hogs. Lean futures should open with uneven price action with summer contracts gaining on their deferred counterparts.
| BULL SIDE | BEAR SIDE | ||
| 1) | The surprising size of last week's surge in the cash cattle market seems to suggest that it represents more than a one-trick pony. In spending so much, packers must sense fairly friendly early-summer fundamentals. | 1) | The still stronger-than-normal basis, extraordinary feeding margins, and ideas of building beef supplies over the next 30 to 60 days should keep feedlot managers a bit trigger happy in terms of selling showlists, especially if market psychology starts to sour. |
| 2) | Live cattle open interest mounted throughout last week, with total commitment increasing by 4,300 contracts Thursday to a little over 430,500 contracts. The combination of this reality and sharply higher prices is typically a strong sign of commodity health. | 2) | Barring a big surprise, ready cattle numbers will steadily increase over the next several months and more and more fed calves willreach market weight. |
| 3) | For the week ending May 25, pork exports jumped to 24,300 metric tons, up 11% from the previous week and 6% from the prior four-week average. | 3) | For the week ending May 25, net pork export sales slumped to 13,800 MT, down 22% from the previous week and 15% from the prior four-week average. |
| 4) |
During the week ending May 30, noncommercial traders were net buyers of 6,100 lean hog contracts, increasing their net long to 50,600.
| 4) | While market hog weights should be trending lower this summer, scale tickets over the last several weeks have been pretty flat. Is it possible that the persistence of cheap corn will keep weights relatively heavy? |
CATTLE: (foodmarket.com) -- BPI $1.9B defamation lawsuit against ABC, originally filed in September 2012, set to begin Monday, June 5.
With jury selection expected to be completed by Friday, June 2, Beef Products Inc.'s (BPI) $1.9 billion defamation lawsuit against ABC and correspondent Jim Avila, originally filed in September 2012, is finally set to begin Monday, June 5. As reported by the Sioux City Journal in Union County, S.D., it is expected to be "a case the scope of which has never been seen in the county, perhaps even the state."
The lawsuit is over a series of stories ABC in which BPI's Lean Finely Textured Beef, was referred to as "pink slime." Dakota Dunes, S.D.-based BPI has claimed that those reports caused "hundreds of millions of dollars in lost revenue and led to a drop in demand for the product, the shuttering of three production plants and layoffs of 700 workers," the Journal article states. BPI is seeking a jury award of $1.9 billion, the amount it estimates the reports did $1.9 billion in actual damages to its company. Additionally, the article states, if BPI wins, its claim could be tripled to $5.7 billion under provisions of South Dakota's Agricultural Food Product Disparagement Act.
The Journal reports that ABC has stood behind Avila's reporting, saying that his reports were well-researched and provided valuable information to consumers. Additionally, it states that ABC said in a written statement: "We look forward to defending vigorously both the integrity of our reporting and the principle that people deserve to know what's in the food they eat."
With a total population of approximately 15,000, Union County, S.D., in which the trial being held, is facing a number of challenges due to the size and national attention of the trial. Because it is expected to last two months, a pool of 400 jurors was called from which 12 jurors and 5 alternates are to be selected. Additionally, with its main courtroom too small to accommodate the trial, the county spent $45,000 updating a community room into a courtroom -- adding a judge's bench and witness, court clerk and reporter stands; upgrading lighting, electrical wiring and the sound system; and bringing in more than 100 chairs for the gallery and jurors. Additionally, the article states, five part-time bailiffs were hired for the trial to enable clerk of court staff members to remain in their regular jobs, and a retired judge will cover Circuit Judge Cheryle Gering's caseload while he presides over the trial
HOGS:(NPPC) -- For anyone involved in pork production, World Pork Expo is the place to be June 7-9, at the Iowa State Fairgrounds in Des Moines. Presented by the National Pork Producers Council (NPPC), Expo features the world's largest pork-specific trade show, along with educational seminars, youth and open swine shows, market outlook sessions, music, an abundance of grilled pork and more.
"Expo is truly an international show, with visitors and exhibitors from throughout the world," says Ken Maschhoff, NPPC president and Illinois pork producer. "It presents an excellent opportunity to expand your global reach and build an understanding of why pork is the No. 1 consumed protein worldwide. It's sure to provide a new perspective on what you do back home."
Organizers are expecting approximately 20,000 producers and pork professionals, including more than 1,000 international guests, to visit this year's Expo. The first stop for many is the trade show. Nearly 450 companies from North America, Asia and Europe will display the latest products, services and technologies for pork businesses. This year's expanded trade show will span more than 320,000 square feet of indoor and outdoor exhibit space. Trade show hours will run from 8 a.m. to 5 p.m. on both Wednesday, June 7 and Thursday, June 8, and from 8 a.m. to 1 p.m. on Friday, June 9. Because of construction, Gate 15 will be closed, and attendees will be re-directed to Gate 16 on the north side of the fairgrounds.
"As they walk through the trade show, producers will find the newest products, services and technology offerings in one location, and that's a huge benefit," says Doug Fricke, director of trade show marketing for NPPC. "Be sure to plan extra time this year as exhibits will be on display in the Ag Building, inside and along the north, east and south perimeters of the Varied Industries Building, as well as in the expanded outdoor space."
The number of hospitality tents also has grown, with 53 tents lining Grand Avenue and spilling over to the Ruan Plaza. "The hospitality tents have become a place for companies and producers to enhance their networking opportunities," Fricke says. "You'll find a range of activities, including meal functions, meetings, new product announcements and socializing."
Recognized as among the nation's premier youth swine shows, the World Pork Expo Junior National kicks off on Monday, June 5, with educational events, certification programs, judging contests and live-hog shows running throughout the week. Hosted by the National Junior Swine Association and Team Purebred, all activities will take place in the Swine Barn.
This year's junior show has again set a record for the number of registrants, with 1,350 youth from 32 states entered to participate. Organizers report that approximately 150 are first-time participants in the Expo Junior National.
The open show, presented by the National Swine Registry, will take place on Friday, June 9, with 1,186 hogs entered by more than 600 exhibitors. A breeding stock sale will begin at 9 a.m. on Saturday, June 10, and run through approximately noon.
Educational and business seminars will fill the agenda on Wednesday, June 7, and Thursday, June 8. More than 15 free seminars are included in the entrance fee to Expo. This year's business seminars will cover topics ranging from piglet care to nutrition management and from better understanding consumers to mastering data collection and more.
PORK Academy, presented by the Pork Checkoff, will outline the most up-to-date production information and ideas. Topics will include pork quality research, sow housing tools, third-party audits, business continuity and the Secure Pork Supply Plan, among others. At each of the seminars, attendees will be able to interact with world-class pork experts.
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