The midweek cash cattle trade could start to take on greater definition, both in terms of preliminary packers bids and initial asking prices. Positively, red hot beef cut-out should help support processing margins and spot cash bids. Negatively, large board discounts and basis strength could prompt sellers to entertain lower bids. That said, significant trade volume could be delayed until Thursday or Friday. Live and feeder futures seem set to begin with mixed prices thanks to residual selling interest on one hand and short covering on the other.
Look for hog buyers to resume work this morning with bids steady to $1 higher. Packer spending did improve some on Tuesday. Country movement did increase some, but not enough given slaughter plans and the expected tigtening in ready barrows and gilts over the next several months. Lean futures are expected to open mixed as well with nearbys probably outperforming deferreds.
| BULL SIDE | BEAR SIDE | ||
| 1) | The appreciation of the beef carcass value appears to be accelerating with both choise and select cut-outs surging more than $2 higher on Tuesday. Furthermore, box demand was described as "moderate to good." | 1) | The debut of spot June live futures was less than spectacular. Despite the tall premium of feedlot cash, the new lead month actually settled lower. |
| 2) | First of the month paychecks typically make consumers more aggressive meat buyers. | 2) | Although feedlot managers have demonstrated remarkably strong selling hands so far this spring, will the courage of sellers increasingly fail if nearby board discounts suggest more and more that a dangerous market cliff is close at hand? |
| 3) | The pork carcass value moved moderately higher yesterday, supported by better demand for butts, picnics, and ribs. | 3) | The cost of gasoline has climbed back to its highest point in three years, squeezing consumer budgets especially on the West Coast and in the Northeast. |
| 4) | For the first time in weeks, summer lean hog futures seemed to attract decent buying interest with practical spot June scoring triple-digit progress. Seasonal bulls may be finally waking up. | 4) | While nearby lean hog futures closed higher on Tuesday, the overall trade finished no better than mixed. Real concerns regarding pork demand in the face of large volume of hogs forecast in the coming months are hard to shake. |
CATTLE: (Market Watch) — McDonald's Corp.'s fresh-beef burgers are expected to keep the fast-food giant's griddles busy, company executives said on the Monday earnings call.
McDonald's has "trained hundreds of thousands of restaurant crew on new procedures" tied to the use of fresh-beef burgers, Chief Executive Steve Easterbrook said on the call, according to a FactSet transcript. The ingredient will launch nationwide next week, and it's building on the potential of McDonald's Quarter Pounder, a menu mainstay.
"We've already been serving these sandwiches in select markets throughout the U.S. and the response has been very encouraging," Easterbrook said. "In our pilot markets of Dallas, 90% of customers who have tried the burgers said they'd buy them again."
Executives say the fresh Quarter Pounders are "hotter and juicier" and makes a "noticeable difference."
Mark Kalinowski of Kalinowski Equity Research agrees.
"Our view is that the fresh-beef burgers made with the quarter-pound beef patties taste better than their predecessors," he wrote in a Monday note.
The new initiative comes as McDonald's breakfast daypart has slipped in the face of competition.
"U.S. guest count declined in the first quarter due to the very competitive breakfast daypart and our conscience decision to simplify our value platform, eliminating most local value offers," said Chief Financial Officer Kevin Ozan on the call, according to FactSet.
Executives didn't name any competing chain that's snapping up market share. But one example might be Starbucks Corp. which has seen sales of its breakfast food items grow, according to analysts.
Another initiative that has been gaining steam for McDonald's is delivery in the U.S., which has been rolling out through a partnership with UberEats. McDonald's has made delivery service a key part of its global growth plan.
Neil Saunders, managing director of GlobalData Retail, says data shows that delivery has been successful in a three ways.
"First, around 68% of sales are incremental," the note said. "Second, the core demographic is mostly younger -- around college age -- and is new McDonald's customers. And thirdly, orders tend to come outside of peak store hours. In our view, these dynamics make the service extremely valuable in terms of growth."
McDonald's has been targeting millennials with new menu items and other initiatives after a 2016 memo from a franchisee questioned the relevance of the company's signature Big Mac.
McDonald's reported earnings and sales that beat expectations, and global same-store sales growth of 5.5%. The company attributed a 2.9% rise in U.S. same-store sales to menu price increases.
McDonald's shares closed Monday up nearly 6%, but are down 2.7% for the year so far. The Dow Jones Industrial Average is down 2.3% for 2018 to date.
HOGS: (National Pork Board)-- Meat, such as pork, can be an important source of much-needed protein in an infant's diet during the transition to solid foods, according to new research from the University of Colorado published in the American Journal of Clinical Nutrition.[i] The first six to 12 months of life is a period of rapid growth when nutrition plays a pivotal role and, for many moms, meat may not be the first choice for an infant's complementary feeding. Yet this new research suggests meat-fed infants (complementary to formula or breastfeeding) could have an advantage when it comes to early length growth.
"Meat, such as pork, provides important micronutrients, is an excellent source of protein and can be an important complementary food for infants who are ready for solid foods," said lead study author Minghua Tang, Assistant Professor of Pediatrics at the University of Colorado. "Our research suggests introducing higher amounts of protein and introducing meat, such as pork, into the diet at five months could be potentially beneficial for linear growth (length gain)."
In the study, 64 healthy, formula-fed infants ate meat-based complementary foods, such as pureed ham and beef, or dairy-based complementary foods from ages five to 12 months old, increasing their protein intake from two grams of protein per kilogram each day before the study up to three grams per kilogram each day during the study period. While the protein increased, both calories and fat intakes stayed the same between the meat and dairy groups, regardless of protein source. Researchers found the pureed meats promoted a greater rate of growth -- with length of nearly one inch greater compared to the dairy-fed group at 12 months of age, with no increase in risk of being overweight at the completion of the seven-month study. These findings build upon previous research demonstrating meat-based complementary foods promoted increases in length without excessive weight gain among breastfeed infants, too.[ii]
The American Academy of Pediatrics recommends introducing solid foods at four to six months of age and advises exposing babies to a wide variety of healthy foods, including a variety of different textures. For babies who are mostly breastfeeding, meat may also have the added benefit of more easily absorbed iron and zinc, as breastfed infants are at a higher risk of becoming iron deficient than formula-fed infants. The World Health Organization also recognizes the need for protein early, recommending infants eat meat, poultry, fish or eggs daily, if possible. The U.S. Departments of Agriculture and Health and Human Services are also planning to expand the 2020-2025 Dietary Guidelines to include guidance on infant nutrition -- given the pivotal role nutrition plays during infant growth.
While more research is needed to understand the potential long-term impacts of including meat, such as pork, in infant diets for growth, the benefits of pork in the diet overall are extensive. In addition to providing high-quality protein to promote growth and development, pork also provides iron and zinc -- two key nutrients for which this age group may be deficient during periods of rapid growth.
"This research is particularly exciting because it shows nutrient-rich pork can play an important role in the whole family's diet," said Adria Huseth, registered dietitian and manager of nutrition communications and research at National Pork Board. "It's nutrient-rich, as well as a versatile, affordable and accessible protein."
No comments:
Post a Comment