Friday Morning Livestock Market Summary

GENERAL COMMENTS:

The cash cattle trade appears to be essentially done for the week. It's certainly possible that we could see isolated clean-up here and there. But even such scattered action would probably require feedlot managers accept lower bids than those seen on Wednesday. Unsold steers and heifers are probably priced around $115 to $116 in the South and $185 plus in the North. Live and feeder futures should open with unseen prices thanks to residual selling and late-week short-covering.

Hog buyers are expected to wrap-up the week's procurement Friday with bids steady to $1 lower. Assuming a Saturday's kill of close to 130,000 head, the total week's slaughter should total close to 2.4 million. Lean futures seem set to open mixed with nearby firming on deferreds.

	BULL SIDE		BEAR SIDE
1)	Net beef export sales last week totaled 16,400 metric tons, up 44% from the previous week and 31% from the prior four-week average. At the same time, actual exports totaled 14,700 MT, down 3% from the previous week but up 3% from the prior four-week average.	1)	Live cattle futures continue to implode on Wednesday with prices setting new four-month lows. The reassertion of an extraordinary strong basis threatened to significantly cripple feedlot leverage.
2)	The International Longshore and Warehouse Union has announced that its members have approved a three-year labor contract extension covering longshoremen at 29 U.S. West Coast ports. When contract negotiations stalled in late 2014 and early 2015, U.S. red meat exporters faced severe delays moving product through West Coast port.	2)	For the week ending July 29, cattle carcass weights generally increased: all cattle averaged 814 pounds, 4 lbs more than the prior week and 11 lbs less than 2016; steers averaged 875 lbs, 7 lbs more than the week before and 8 lbs less than last year; heifers averaged 794 lbs, 2 lbs lighter than the previous week and 9 lbs below 2016.
3)	Net pork sales last week jumped to 18,900 MT, up 7% from the previous week and 30% from the prior four-week average.	3)	Thursday's bearish estimate of the growing corn crop set the stage for cheaper livestock feed going forward, thereby encouraging both herd expansion and heavier carcass weights.
4)	As open interest in live cattle futures is liquidating, total commitment in lean hog contracts is climbing. If this realignment by specs continuing, the discounts of lean futures should keep lessening.	4)	The World Board's forecast for total meat production in 2017 has been raised from last month as increases in commercial beef and broiler production more than offset declines in pork and turkey production.

OTHER MARKET SENSITIVE NEWS

CATTLE: (San Antonio Express-News) -- The Trump administration's last-minute withdrawal from the Trans-Pacific Partnership trade agreement with Asia undercut U.S. beef exporters, but Texas cattle ranchers still have reason to be bullish about what agricultural economist Derrell Peel called "the law of Chinese markets."

"Any number times 1.4 billion is a big number," Peel told the more than 2,000 cattle raisers filling a cavernous auditorium at Texas A&M University on Monday for an update on export markets. The Beef Cattle Short Course, billed as the world's largest event of its kind, continues through Wednesday.

China, the most populous nation in the world, accepted its first shipments of U.S. meat in June from a packing house in Nebraska. For U.S. cattle producers, the dignitary-studded June 30 event in Beijing welcoming U.S. beef was momentous.

"We're just fortunate to really have our foot in the door once again," said Kelley Sullivan, co-owner of the Santa Rosa Ranch, which specializes in raising Brangus and UltraBlack and its the largest cattle producer in Texas. "You can talk to anybody within the Texas Beef Council and they are receiving multiple calls a day from Chinese purveyors looking for eligible cattle."

While grass-fed cuts from Australia still dominate mainland Chinese shelves, U.S. industry leaders hope it's only a matter of time before Chinese consumers take to U.S. grain fed beef. For now, inventories are limited and the product is likely causing sticker shock among average Chinese buyers. Still, it's hard for Texas producers not to be bullish about the math.

China was the largest buyer of U.S. beef — snapping up some 70 percent of the U.S. beef export market — up until 2003 when a mad cow disease scare prompted Chinese leaders to close the nation's borders to the product. With the country's growing prosperity, China's beef imports, in the meantime, have continued to rise to $2.5 billion in 2016. That's a 21.5 percent increase since 2011.

Texas, which is the nation's largest producer of beef and counts cattle as its largest agricultural commodity, accounts for a sixth of all U.S. beef exports. Should the U.S. regain that 70 percent market share, the China market alone would be worth $291 million annually to Texas producers.

"We finally had the breakthrough, and it's tremendous. I would say it's better than I honestly expected," said Erin Borror of the U.S. Meat Export Federation...

HOGS: (Sioux City Journal) -- Less than a month before production is set to begin at Seaboard Triumph Foods, company officials continue filling a healthy portion of the Sioux City pork plant's labor force.

As of Tuesday, "a couple hundred" of the hourly production workers for the $301 million plant had been hired, STF human resources director Bridey Hayes said. Company officials have long maintained that they did not expect to have all 900 production jobs filled by the opening of the plant, projected for early September.

"Things are going well. We still have a number of positions to fill and we are continuing along that process," Hayes said. "We've been working very hard on staffing and we've been contacting folks who have applied and scheduling interviews."

A majority of the 200 salaried positions have been hired, and the office staff are in the midst of moving into the new complex in the Bridgeport West Business Park. The 925,000-square-foot plant is nearing completion after nearly two years of construction. Prior to the move, which began over the weekend, Seaboard Triumph staff were based in temporary offices in a nearby Braunger Foods facility.

Hayes said newly-hired production workers are either undergoing orientation in Sioux City or are training off-site at one of STF's parent companies' facilities. The mega pork plant is a joint venture between Guymon, Oklahoma-based Seaboard Foods and St. Joseph, Missouri-based Triumph Foods.

Seaboard Triumph officials have spoke openly of wanting to increase the region's population base, which they view as something that doesn't just benefit them but all of the region's major employers.

As part of its marketing campaign, STF has advertised production jobs in communities in California, Missouri; Alabama, Arkansas with large food processing plants and experienced workers, asking potential applicants to relocate to Siouxand.

Hayes said STF is willing to help new hires relocate; however, that determination is made on a situation-by-situation basis.

"We've got a lot of positions to fill and we are exploring every avenue and possibility to fill those positions," she said. "We're looking at folks locally but also looking outside of the immediate area."

The Sioux City metro has hit several historic unemployment metrics this year including the region's unemployment rate falling below 3 percent for consecutive months in April and May. The latest figure pegs the metro's unemployment rate at 3.3 percent.

In June, STF Chief Operating Officer Mark Porter noted the company had reached out to a state agency to see about making Sioux City a primary refugee resettlement community, a process that could take years to come to fruition.

Additionally, STF has been in contact with a local staffing agency, which Porter said was working on creating an EB3 Visa program to bring Vietnamese immigrants to the area.

In May 2018, the company plans to start a second shift, which will increase its total workforce to 2,000.