Feedlot country should start out Monday morning with the typical assortment of new showlists. Our guess is that ready numbers will be found to be about steady with last week. Early asking prices are likely to be around $112 to $114 in the South and $175 plus in the North. Live and feeder futures seem likely to open on a mixed basis thanks to follow-though selling and early-week short-covering.
Look for cash hog bids to start out Monday morning on a steady/firm basis. Initial country sales should be well supported by better demand for wholesale pork discovered on Friday. Lean futures are expected to begin on a mixed basis in slow volume.
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October live cattle futures tends to head higher during the trading month of October.
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There were across-the-board losses in the live cattle futures market last week, with spot October losing 147 points and most actively traded December down 197 points. February 2019 had the largest decline of 212 points.
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August beef exports totaled 119,850 metric tons (mt), up 7% from a year ago, valued at $751.7 million -- up 11% year-over-year and easily exceeding the previous record of $722.1 million reached in May 2018. For January through August, beef exports totaled 899,300 mt, up 9% from a year ago, while value climbed 18% to $5.51 billion.
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For the week ending Sept. 29, steer carcass weights increased by four pounds to 900 pounds (heaviest since the beginning of the year) and were six pound heavier than last year. Heifer weights came in at 830 pounds, up five pounds, week to week, and 11 pounds over last year.
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For the week ending May 9, noncommercial traders increased their long position in lean hog futures by 500 contracts, resulting in a net-long of 2,300.
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August pork export volume was down 1% from last year at 182,372 mt, while export values fell 3% to $494.1 million. Pork variety meat exports declined sharply in August in both volume (33,636 mt, down 20%) and value ($79.4 million, down 15%).
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The pork carcass value closed solidly higher on Friday, supported by all primals except the butt. Belly strength proved to be especially strong.
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The seasonal index is now entering a bearish period in late-year lean hog futures, so it is possible that December futures will exhibit price weakness.
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CATTLE:(Oklahoma Farm Report)-- The US beef cattle industry welcomed the recent news of an accord between President Donald Trump and Japan's Prime Minister Shinzo Abe to begin negotiations on a bilateral trade agreement. National Cattlemen's Beef Association Director of International Trade and Market Access Kent Bacus says with Japan as the No. 1 export market for the US beef industry, the success of getting this trade deal done and getting it done quickly, is very important to the health of the beef industry and producers' bottom lines.
"We face a 38.5 percent tariff in the Japanese market. Just like the Korean market, that's one of our biggest hinderances. Once we can get that out of the way - we've already focused on developing the Japanese consumer over the last several years. That's become a very important market to us; our biggest export market by far."
According to Bacus, the Japanese market accounts for approximately 25 percent of our beef export sales, close to $2 billion in a market. Bare in mind, Bacus says, that is with a 38.5 percent tariff which means opportunity abounds in that market to develop the supply chain there and its consumer base even more. Whether the terms of beef trade will come up at the front end, the back end or somewhere in the middle of the negotiation process remains unknown at this time, but Bacus insists it is a matter that NCBA will strongly push for the US negotiators to address.
"I think the thing to keep in mind is that a lot of other people see Japan as a very important market. There's already a lot of competition there that could affect our long-term success in that market," he said. "That's why we need to move quickly to establish a free trade agreement with the Japanese. The timing on this is going to be very important so that's why this Japan trade agreement is one of the top priorities for us at NCBA."
HOGS: (National Pork Board)-- A recent trade mission to Asia by the National Pork Board International Marketing Committee built lasting relationships with international customers and elevated U.S. pork as the global protein of choice. The Pork Checkoff team toured Singapore, Vietnam, Hong Kong and Macau, meeting with pork processors, distributors and retailers, importers and traders, as well as in-country staff responsible for promoting U.S. pork in the region. "Pork is the No. 1 most-consumed protein in the world, and that was obvious on this mission," said Bill Luckey, a pork producer from Columbus, Nebraska, and chair of the Pork Checkoff's International Marketing Committee. "As the committee allocates Pork Checkoff dollars to international marketing, it is important to see how these dollars are working today and how we might better target producer resources in emerging markets in the future." With U.S. pork production again breaking records in 2018, the Pork Checkoff is committed to growing pork demand both domestically and in international markets. Singapore and Vietnam are developing markets for U.S. pork and present huge opportunities for U.S. pork export growth in the coming years. In 2017, U.S. pork exports to Singapore increased almost 20 percent from 2016, reaching $17 million. Last year, the United States also exported over $11 million of fresh/chilled/frozen bone-in hams and shoulders to Vietnam. "Consumers in Vietnam and Singapore are rapidly increasing pork in their diets, with pork consumption on trend to overtake seafood consumption in both markets as the No. 1 protein," said Craig Morris, the Pork Checkoff's vice president of international marketing. "This provides a great opportunity to capture a rapidly increasing market share, but we must first understand the changing consumer and retail landscapes in these countries to meet consumer needs and expectations."
While in Singapore, the committee learned that U.S. pork often is positioned as a premium product, with high-end U.S. pork selling for three to five times more than the price of competitors' products. Also, pre-prepared and processed foods are becoming popular as consumers seek convenience to meet their increasingly busy, urban lifestyles.
"U.S. pork can succeed in Singapore by delivering a high-quality product packaged in small portions and in convenient, ready-to-cook formats," Morris said.
In Vietnam, committee members learned that popular wet markets, where fresh pork is sold on the streets, are declining as consumers seek the modern conveniences of full-service grocery stores. U.S. pork is viewed as a superior product in terms of taste and quality, and it is being marketed as such by U.S. import partners and buyers, Morris noted. U.S. pork is heavily featured in restaurants throughout Vietnam, especially by those with newer, more modern menu offerings.
"It's surprising, but Vietnam is a booming market for American barbecue," Luckey said. "Many restaurants feature U.S. pork's reputation for superior quality, which they promote on menus to grow their business."
"In this challenging trade environment, it is critical that we meet with our colleagues in Hong Kong and express gratitude for their continued partnership. Building face-to-face relationships is especially important in this region," Morris said. "We met with 40 of the largest importers who play a key role In deciding what will be sold in retail stores, featured on restaurant menus and traded with other countries in Southeast Asia."
The last stop on the international mission was Macau, which is home to some of the world's largest casinos. As a large tourist destination, the country offers many opportunities for U.S. pork to be showcased to consumers from all around the world.
Luckey called the Asian trade mission a great success.
"Not only were we able to see the many different ways that pork is being promoted in these countries, but we came back with insights into how to grow our market share," Luckey said. "The committee members are excited to share these ideas with our partners here in the U.S. and to follow up
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