While we're still waiting for someone to throw out the first ball in the feedlot championship this week, likely that potential will start to get more real Thursday. Look for starter bids around $111 in the South and $174 to $175 in the North. Yet if asking prices hold firm around $115 in the South and $180 in the North, it could mean business will be delayed until Friday. Live and feeder futures should open moderately higher, supported by residual buying and feedlot bullishness.
Lean hog futures are set to open significantly stronger based on Wednesday's surging board. Packer margins remain quite attractive, explaining why Saturday kill plans could amount to close to 192,000 head. Lean futures should open moderately higher, boosted by follow-through buying interest and decent process margins.
| BULL SIDE | BEAR SIDE | ||
| 1) |
Last week's slow movement in Kansas and Texas, and limited traffic so far this week in the southern tier of feedlot country, should mean that some area packers are moving into the tail end of the week extremely short bought.
| 1) |
The structure of live cattle futures clearly does not encourage current marketing. The premium on December has widened to more than $7, compared to the five-year average of a premium near one dollar. The weak basis and strong premiums in the late fall and winter contracts will encourage producers to resist lower bids from the packers.
|
| 2) |
Beef cutouts continue to have a firm undertone as the week proceeds, encouraging well-margined processors to be supportive of recent cash gains.
| 2) |
Noncommercials had a minor decline in their net-long position in live cattle futures, while total open interest declined by more than 10,000 contracts from the recent highs of last week.
|
| 3) |
Lean hog futures shot higher Wednesday, with the nearby contracts ending the day limit up while the late spring and summer 2019 contracts posted new life-of-contract highs. African swine fever in China, which may boost U.S. pork exports down the road, were supportive.
| 3) |
For the week ended Oct. 20. Iowa barrows and gilts averaged 282.9 pounds, .1 lb. heavier than the prior week and 1.2 lbs. bigger than the prior year.
|
| 4) |
The seasonal tendency is for December lean hog futures to chop sideways to lower over the next couple of weeks before trending back higher in November.
| 4) |
The discount in December lean hogs compared to the cash market is reflective of trader expectations of a significantly lower cash market late this year.
|
CATTLE:(NCBA) -- This article is sponsored by National Cattlemen's Beef Association, a contractor to the beef checkoff. The U.S. beef industry has made progress improving its sustainability, but there's room to do more. Further improvements are a full supply chain effort. With one of the most complex supply changes in the world, a full supply chain effort means that cow-calf producers, feedlot operators, universities and research institutes, beef packers and processors, retailers, food service companies and even consumers have a role to play in improving the sustainability of beef, as the chart below illustrates.
How about some specifics? Below are contributions from Myriah Johnson at Noble Research Institute in Ardmore, Oklahoma, and Kimberly Stackhouse-Lawson at JBS-USA in Greeley, Colorado, that outline just a taste of their efforts to improve beef's sustainability.
A onprofit research institute focused on healthy soils helps to coordinate a beef sustainability pilot
The Noble Research Institute, with industry partners, is involved in a two-year beef sustainability pilot project testing the U.S. Roundtable for Sustainable Beef metrics and indicators. This pilot aims to improve the sustainability of the entire beef production chain and act as a model for the U.S. beef industry.
This pilot also provides the opportunity to compile valuable information from the ranch all the way through the carcass on a production scale. Typically, a beef producer's information about their animal stops at the ranch gate when the animal is sold. The project will provide the animal's feedyard performance (feed efficiency) and carcass information back to the farmer or rancher and create a unique educational opportunity; not only are producers able to learn how their animals performed, but how they stacked up against other project cattle and other cattle on feed outside of the project during the same period. In their efforts to improve, beef producers can use this information to better understand the impacts of certain practices on sustainability and identify opportunities for improvement.
This pilot project also provides the opportunity to investigate industry issues that hinder sustainability, such as bovine respiratory disease, which will generate knowledge not only for pilot project participants, but for the industry as a whole. Gathering such comprehensive information promotes the feedback loop between producers, researchers and across all other sectors of the supply chain. By working together to understand and address the challenges that we each face, we can achieve our goal of continuous improvement.
HOGS: (CNNN) -- First, Beijing slapped tariffs on American soybeans. Now, it wants to wean its farmers off them altogether.
China has been facing a potential soybean shortage after it put a new 25% tariff on importing them from the United States in July, part of the escalating trade war between the two countries.
China is the world's biggest buyer of soybeans, using them as a protein-rich feed for livestock such as pigs and chickens. More than a third of its supply comes from the United States.
Beijing's solution to get by without US beans? Give the animals less to eat.
One of the country's top industry groups this month proposed cutting the amount of protein used in livestock feeds, saying animals could get by with less than is required at the moment. The government-run China Feed Industry Association said a reliance on imported soybeans is creating a "bottleneck" for the country's farming industry.
But getting millions of Chinese farmers to reduce the amount of foreign soybeans eaten by their pigs is a daunting task that is likely to take a long time to carry out and could cause disruption throughout the country's agricultural industry
The plan would inflict further pain on US farmers already smarting from the tariffs and could eventually mean China no longer needs American soybeans at all.
"It's directly linked to the US-China trade war," said Loren Puette, the director of research firm ChinaAg in Taiwan. "The implication is that China will completely halt all future imports of US soybeans."
China has alternative soybean sources, the biggest is Brazil, but they don't produce enough to replace its imports from the United States.
"Sourcing soybeans from a bunch of trade partners is both expensive and inefficient," said Even Pay, a Beijing-based agriculture analyst at research firm China Policy. "Companies are looking for cheaper, alternative sources of protein."
Some local Chinese governments are encouraging farmers to grow soybeans instead of other crops, but analysts say China is a long way from being able to produce anywhere near enough to meet its own needs.
A long-term shift by China away from importing US soybeans would have serious consequences for American farmers, who sold more than $12 billion worth of soybeans to the country last year, their largest export market.
Five years ago, Beijing temporarily stopped accepting shipments of genetically modified American corn, another important animal feed, prompting Chinese farmers to buy other crops like sorghum and barley. Chinese demand for US corn never fully recovered, according to Pay.
American soybean farmers have spoken out repeatedly about the threat to their livelihood from the trade war.
Paul Burke, senior director of the US Soybean Export Council in Shanghai, said he thinks the Chinese government is trying "to minimize the import of any US soybeans" with its plan. He expects Chinese demand for American soybeans to fall if the proposals are implemented.
In August, there were already signs that China was shunning American soybeans after imposing tariffs on them the month before.
"The US soybeans are not allowed to be imported, you can't get it even if you want to," Xu Limin, a sales manager at Hebei Power Sea Feed Technology, a Chinese company that last year imported thousands of tons of US soybean products, told CNN at the time.
"Imports from the US have been almost nonexistent in recent months," analysts at research firm Fitch Solutions wrote in a note to clients this week. That's largely because soybeans are typically harvested in Brazil in the first half of the year and in the United States in the last quarter, they noted.
The real test will be the next few months when Brazilian supplies dry up.
"China will have to import some soybeans from the US in the coming months," the Fitch analysts said, predicting it will switch back to Brazilian ones as soon as they become available again early next year.
 |
| #ccc |
No comments:
Post a Comment