Cattle buyers and sellers should make more of an effort today to mark territory with definite bids and asking prices. We anticipated initials bids around $115 in the South and $185-186 in the North. Furthermore, we assume that asking prices will start out near $120 in the South and $190 plus in the North. FCE auction results will be available later this morning, and it's possible that the internet trip could spark country biz in one way or the other. Yet FCE volume is typically light, so price action may be generally ignore, especially if futures or cut-outs look more significant. Live and feeder futures should open at least moderately higher with the help of follow-through buying and cash premiums.
The cash hog trade seems staged to open with bids steady to $1 lower. Pork processing margins remain quite profitable, encouraging packers to crank chain speed if they can find numbers without spending significantly more money. At this time, Saturday kill plans should total close to 74,000 head. Lean futures should open lower, pressure by follow-through selling and nervous supply expectations.
| BULL SIDE | BEAR SIDE | ||
| 1) | The discounted cattle board finally attracted significant buying interest on Tuesday. Most feeder contracts managed to settle back above 40-day moving averages. | 1) | Though it might have served as a temporary tonic for cattle market morale, yesterday's rally in cattle futures seemed to lack a great deal of significant and may have been little more than a dead cat bounce. |
| 2) | Moderating summer temps should help feedlot leverage. The same will be true is live futures rally further and work to check the extraordinarily strong basis. | 2) | Cattle slaughter is slowly but surely cranking up. This week's slaughter is projected to total close to 633,000 head, about 1 percent higher than last week and nearly 9 percent greater than 2016. |
| 3) | Lean hog futures appear to be oversold with RSI oscillators trending well under 30 basis most contracts. At the very least, the board could be ripe for some kind of correction. | 3) | The pork cut-out closed solidly lower on Tuesday thanks to softening demand for hams, bellies, and loins. |
| 4) | After moving minimal numbers on Monday with sharply lower bids, hog buyers spend a bit more on Tuesday and managed to generate decent trade volume. Perhaps spot numbers are not set to accelerate as quickly as many bears fear. | 4) | Pork production is expected to continue increasing. This week's slaughter could be as large as 2,255,000 head, 2.5 percent greater than 2016. |
CATTLE: (SBS News) -- Australian authorities have vowed to "move heaven and earth" to avoid a temporary ban on some beef exports to China lasting several months.
Government officials concede there's a risk a ban on some Australian beef exports to China could last several months.
China's quarantine agency raised concerns last week over labels on some boxes of exported beef that don't match packet labels inside.
While they agreed to accept meat sent from Australia before July 24, the suspension has affected six processors.
An audit of those processing companies is now complete and a report will be given to Chinese authorities within the next week.
It will detail Australia's account of what happened and a program to remedy the issue, Department of Agriculture secretary Daryl Quinlivan told a parliamentary committee in Canberra on Tuesday.
Mr Quinlivan said the matter was being taken seriously and the firms involved accept there is a genuine problem that needs fixing.
"It's not a trivial matter," he said.
"We'll just have to and see how the Chinese authorities react to that."
Mr Quinlivan said a number of exporting countries - including Canada and Germany - have had their trade suspended for similar breaches over the past year.
In one of those cases, the ban lasted several months.
"We'll be moving heaven and earth to avoid that kind of an outcome, but it's clearly a risk," he said. HOGS: (foodmarket.com) -- Preliminary reports indicate West Coast union longshore workers will extend their collective bargaining agreement to 2022, the early vote welcomed by stakeholders given the contentious negotiations of 2014, which jammed up port operations numerous times during that year's negotiations.
The International Longshore and Warehouse Union said 67 percent of rank-and-file members voted July 28 in favor of extending contract with the Pacific Maritime Association. The union will announce the official vote tally from 129 Pacific ports Aug. 4.
The extension would raise wages, maintain health benefits, increase pensions and extend the agreement three years beyond the current expiration date of July 1, 2019.
Jonathan Gold of the National Retail Federation and other stakeholders applauded the early vote.
"Nobody wants to see a repeat of the problems that were experienced in 2014-2015, and this remarkable sign of good faith on the part of both labor and management ensures that such a situation will be avoided," Gold said.
The proposal resulted from year-long negotiations and affects dockworkers in ports from San Diego to Bellingham, Washington.
The previous contract expired in July 2014 after less than two months of negotiations. The union continued working without a contract, but ports were mired in slowdowns and cargo backups. Congressional representatives and others pleaded for a resolution until Labor Secretary Tom Perez brokered an agreement the following February.
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