Needless to say, the big question among cattle traders in the last week of March is whether board discounts can start to stabilize and stop pulling spot feedlot cash sales. Yet we may have to wait until Wednesday or later to get an answer. Activity Monday will be limited to the distribution of new showlists. We expect the new offering to be steady to somewhat smaller than the previous week. Live and feeder futures are likely to open at least moderately lower, pressured by follow-through selling, technically bearish concerns and uncertain cash prospects.
The cash hog market is expected to restart Monday with bids steady to $1 lower. The board seemed to slump into free fall on Friday with nearby issues falling to new contract lows. While most market watchers readily admit that the beginning of the large spring/summer rally is in the offing, few at this time seem willing to predict a starting date. Remember, USDA is set to release the quarterly Hogs and Pigs report on Thursday, at 2 p.m. CDT. Lean futures seem set to open lower, restricted by bearish momentum and defensive late-month fundamentals.
| BULL SIDE | | BEAR SIDE |
| 1) | Given oversold charts and historical deep board discounts, cattle traders could easily ignore any bearish implications of the Cattle on Feed report, perhaps focusing more on the better risk/reward bet of bottom-picking. | 1) |
The March 1 Cattle on Feed report turned out to be somewhat bearish, which confirms larger-than-expected February placement activity (i.e., up 7% versus the average pre-report guess of up 4.5%).
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For the week ending March 15, actual beef exports totaled 16,700 metric tons (MT), up 10% from the previous week and 7% from the prior four-week average.
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Net beef export sales for the week ending March 15 totaled no more than 6,000 MT (a marketing-year low), down 70% from the previous week and 66% from the prior four-week average.
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The seasonal index for April lean hog futures tends to be mostly stable for the very near term, but then increases as the contract moves towards expiration the middle of the month.
| 3) | During the week ending March 20, noncommercial traders were net sellers of lean hog futures, decreasing their net-long position by 1,000 contracts to the 8,400 contract level. |
| 4) | The short-term lean futures market trend is strongly negative as the cash market, but/the long-term futures market trend is still positive. | 4) | The hog market is not sure how to weigh the potential impact of China reducing its U.S. pork consumption. The April lean contract closed on Friday at $58.43, down 290 points on the day and 700 points lower on the week. |
CATTLE: (Fox News) -- Nothing gets fast food lovers salivating like a new menu item -- especially when it comes to burgers.
So when McDonald's Australia announced they were dropping a "world-first limited edition burger," social media went flippin' mad.
At about 10.30 a.m. on Wednesday (local time), restaurants across the country launched the new burger which has a recommended retail price of $10.75 AUS, or about $8.29 U.S.
The new menu item includes a 100-percent Australian-bred Wagyu beef patty in between a gourmet bun (made to a new recipe), with a specially created sauce, crispy bacon strips, caramelized onion, tomato, lettuce and a slice of cheese.
The burgers, which will only be available for a limited time and while stocks last, is the first time the fast food chain has offered Wagyu beef as part of their menu.
While the burger has its fans, some take issue with its taste and its suggested price of $10.75 AUS, or about $8.29 U.S. But critics haven't been kind to the new edition, with some claiming the "wagyu is dry", tastes like "cardboard," and that charging over $10 "is taking the p-ss."
Posting to a Facebook group called Fatties Burger Appreciation Society, which has around 10,000 followers, the new burger has left enthusiasts less than impressed.
"Patty cooked to death sometime last week and presented with unmelted cheese, tomato, bacon, a crap-ton of wilted lettuce and a smear of nondescript sauce on a dry oversized bun," one poster, David Winch, wrote on the page. "Inferior in every way to even a McFeast ... and [charging] over a tenner is taking the p-ss."
His post, which gave the burger a rating of just one out of five, was met with comments questioning the price, and how the patty had been cooked.
"For a company knowing they need to up their game in the burger market (especially in Australia), Maccas look like they f---ed up with this one," one person posted.
"Had one earlier on the back of all the hype. Haven't had Maccas cardboard burgers for a while but thought I'd give this a shot even though I knew it was gonna be cardboard V2. It's rubbish."
"I'm having this really strange feeling of disappointment," another added.
On the McDonald's Australia's Facebook page, social media users were quick to call out the price tag of the new burger.
"Went to get one but not paying that much for it!" one person wrote.
"Go to a proper burger place or cafe in [Melbourne] and pay $15 with chips and salad."
But others were in favor of the new addition to the menu, saying the wagyu patty was perhaps the best they'd tried from the fast food chain.
"The meat is divine," one person said.
"Just had one for lunch … not bad at all," another added.
HOGS: (Bloomberg) -- China struck back at U.S. import tariffs with its own set of reciprocal ones targeting, among other products, pork.
The world's biggest pork producer, consumer and importer is planning a 25 percent tax on U.S. pork imports, the Ministry of Commerce said in a statement on Friday. The tariffs would be in addition to current duties.
China's plans for reciprocal tariffs on $3 billion on products from pork to wine come in response to steel and aluminum duties ordered by U.S. President Donald Trump earlier this month. Agricultural commodities could be a feature of any ongoing tit-for-tat trade war. China is already investigating sorghum imports from the U.S. and people familiar with the matter said last month that the country was studying the impact of restrictions on U.S. soybeans, used to feed the Asian country's pigs.
"China is showing its capacity to fight back," said Monica Tu, an analyst at Shanghai JC Intelligence Co. The measures aren't expected to "impact fundamentals a lot," she said, as imports from the U.S. only account for about 14 percent of China's purchases.
Still, China and Hong Kong combined is the second-biggest market for U.S. pork, according to the U.S. Meat Export Federation. Analysts at Vertical Group said this week that U.S. pork was an "easy target" for China, citing a decline in its domestic pork and hog prices.
The National Pork Producers Council warned that possible Chinese tariffs on U.S. pork could have a significant negative impact on rural America. "No one wins in these tit-for-tat trade disputes, least of all the farmers and the consumers," it said in a statement.
WH Group Ltd., the world's largest pork company, dropped 4.7 percent. The company acquired U.S. pork and hog producer Smithfield Foods Inc. in 2013. Shares of Muyuan Foodstuff Co., the country's third-biggest pig breeder, rose 0.6 percent. Guangdong Wens Foodstuffs Group Co., the largest pig breeder, advanced 3.7 percent. New Hope Liuhe Co., China's top animal-feed producer, added 0.1 percent. Jiangxi Zhengbang Technology Co., a feed producer, increased 2 percent.
Soybean meal on Dalian Commodity Exchange climbed as much as 4.3 percent to 3,128 yuan ($494) a metric ton before closing 1.5 percent higher at 3,046 yuan. The surge reflects concerns that an expansion in tariffs could impact the supply of U.S. soybeans to China, according to Tu.
A consolidation of China's pig industry has seen small farms shut due to environmental concerns, while large-scale operations are expanding. The country's pork imports are forecast to decline in 2018 as an increase in domestic production reduces the need to buy meat from overseas, according to the U.S. Department of Agriculture.
