Tuesdays are usually quiet affairs in the cash cattle market, and Tuesday should be no exception. At this point, we assume feedlots will price ready cattle around $120 for live and $190 dressed. That said, specific market definition will probably be delayed until at least Wednesday or Thursday. Look for live and feeder issues to open moderately lower, stalled by follow-through selling and technical concerns.
Hog buyers should resume work Tuesday with bids a dollar or more lower. Carcass weights trended lower last week and likely have two or three more weeks of losses ahead. Lean futures seem geared to trade lower in the opening rounds thanks to residual selling interest and vulnerable fundamentals.
| BULL SIDE | BEAR SIDE | ||
| 1) | Though showlists numbers vary across the cattle feeding area (e.g., Colorado more, Kansas and Nebraska fewer), the overall fed offering looks smaller than last week. | 1) |
Cattle futures seem to be falling out of the early summer price range with spot August live slumping Monday to its poorest close since April 24.
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| 2) | Once the wholesale beef market turns in August, the worst of dog-day demand is typically behind us with better product demand only weeks away. | 2) | As temperatures moderate, cattle carcass weights could quickly slip back into the seasonal groove and jump significantly higher. |
| 3) | The pork carcass value rebounded on Monday, recovering nearly a buck thanks to better demand for all primals except the picnic. | 3) | Lead month August lean hog futures settled Monday's trading session 110 points lower at $80.30, a 780-point discount to last Friday's two-day CME settlement index value. Even though the clock is starting to run on August expiration, the spot month still seems to have no reservations in leading cash lower. |
| 4) | While cash hog prices were sharply lower Monday, country receipts were very light. If movement continues to slow like they have, buyers may be forced to raise bids in order to sustain profitable chain speed. | 4) | With fresh cuts (i.e., loins and butts) expected to be pressured further over the next several weeks and the counter bullishness of bellies starting to fade, this week's cutout is forecast lower, $2 to $3, Indeed, such bleeding could persist through much of August. |
CATTLE: (Electronic News Publishing) -- The CEOs of the National Cattlemen's Beef Association, the North American Meat Institute, and the U.S. Meat Export Federation sent a letter to USDA Secretary Sonny Perdue and Ambassador Robert Lighthizer of USTR to highlight the success the U.S. beef industry has experienced with its exports to South Korea since the entry into force of the Korea-U.S. Free Trade Agreement (KORUS).
The industry letter was prompted by the recent announcement from the Trump Administration that there will be a special session with South Korea to discuss potential changes to the KORUS. The meeting will be held in Washington, D.C., in August.
'Simply put, KORUS created the ideal environment for the U.S. beef industry to thrive in South Korea,' the letter said. 'We would not support any changes in the terms of the KORUS that would jeopardize either our market share or the significant investment that has been made in rebuilding Korean consumer confidence in the safety, quality, and consistency of U.S. beef.'
Together, the three U.S. beef industry associations represent the entire beef value chain, from ranchers to feedlot operators to meat packers and export trading companies, and they are united in the position that continued access to the South Korean market on the terms that were negotiated in the KORUS is essential to the future health of the U.S. beef industry.
The letter states that 'Under KORUS, the U.S. beef industry has seen an 82 percent increase in annual sales to South Korea, from $582 million in 2012 to $1.06 billion in 2016, making South Korea the second largest export market for U.S. beef. Many cuts like short ribs and chuck rolls receive a significant premium in South Korea over prices in the U.S. market. KORUS established strong science-based trade measures and a schedule for the elimination of South Korea's 40 percent tariff on U.S. beef-terms that have allowed the U.S. beef industry to be very competitive in South Korea.'
The letter further states that 'implementing KORUS before the Australians implemented their free trade agreement with South Korea has given U.S. beef a significant tariff rate advantage in South Korea, and the United States is now the leading source of beef imports in South Korea.'
HOGS:(Northern Michigan News) -- A massive pork processing facility is set to open in Branch County, Michigan.
It's been in the works for four years now.
Clemens Food Group cut the ribbon on the 650,000 square foot facility in Coldwater on Saturday.
The plant will bring around 800 full-time jobs to the area and process 11,000 hogs per shift.
It was built in Coldwater because it's near the freeways leading to Detroit and Chicago.
Governor Snyder says thanks to state incentives, they're able to bring new jobs like these back to Michigan.
The plant is slated to open in September.
They are still hiring and more than 500 full-time jobs are still available.
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