The fed cattle trade should take on better definition Thursday. Expect bids to start out around $183 dressed in parts of Nebraska and Iowa, roughly $4 plus below area asking prices. On the other hand, live bids in the South (i.e., $116 to $117) may look promising yet remain well below asking prices of $120 or better. Live and feeder futures should open mixed as traders jockey around the possibilities of late-week cash.
Hog buyers seem set to resume cash procurement Thursday with basically steady bids. Lean futures should open on both sides of unchanged. The pattern of nearbys gaining on 2019 issues as seen all week is expected to persist through the trading session.
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Though the midweek cash cattle trade was barely tested, a few opening bids climbed above spot December live, suggesting that packers were gearing up to pad the cash market by the end of the week.
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Beef cutouts closed significantly lower on Wednesday with box movement described as no more robust than light.
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Following last week's declining volumes in the holiday-shortened production week, boxed beef volumes should increase over the next two to three weeks, before easing back into the holiday period.
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For the week ended Nov. 24, U.S. hatcheries set 228 million eggs in incubators, up 1% from a year ago.
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For the week ended Nov. 24, broiler growers in the United States placed 173 million chicks for meat production, down 1% from a year ago.
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The pork carcass value sagged moderately lower at midweek, checked primarily by eroding demand for loins and bellies.
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Spot December lean hog futures ended Wednesday's session firmer at $57.95, a 110-point premium to the most recent two-day CME settlement index value. The short-term market trend is neutral, and the longer-term trend is bullish. The market structure is bullish with the strong premium built into the February 2019 contracts.
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For the week ended Nov. 24, Iowa barrows and gilts averaged 283.9 pounds, .5 lbs. heavier than the prior year and 1.9 lbs. lighter than 2017.
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CATTLE: (foodmarket.com) -- The world's largest cattle feedlot is expanding South African beef exports beyond the Middle East to take advantage of surging demand in China and other Asian markets.
Karan Beef's feedlot south of Johannesburg is emblematic of a push by South African agriculture to boost exports of more niche products ranging from grapefruit and avocados to macadamia nuts. Increasingly, the emphasis is on high-value products rather than mass output of less lucrative crops like corn.
With 160 000 cattle on the property, which converted from dairy to beef production in about 1980, and half a million of the animals sent to slaughter every year, the 2 500 ha operation is the biggest feedlot on a single site globally, according to director Matthew Karan.
The cattle are acquired from farmers around the country at about eight months old. They're more than doubled in weight to about 420 kg within four months with feed including molasses and gluten mixed in a production line-like factory that sees specially equipped trucks constantly topping up troughs in the pens. The operation accounts for 70 % of South Africa's beef exports and 30% of the local market.
"This is as good as you would see in Texas," said Karan, one of three sons of founder Ivor, whose own father owned a cupboard-making business in Johannesburg.
The business has been exporting beef to the Middle East since the early 2000s and last year won access to China, doubling export volumes, Karan said in an interview at the feedlot. In the year to November it shipped 4.34-million kilograms of beef to China and 4.68-million kilograms to the Middle East.
The company has had to work hard to promote South African beef, which is generally lean and "rose" in color due to the local grading system, he said. That compares with the more marbled meat from the US and Australia, which contains more fat.
"China is the market that's putting pressure on us, China needs more beef," said Karan. "We have limited the volumes we send them because we don't want to take away from the local market. There is potential for us to scale up exports, but this facility is pretty much at the maximum we could get to."
China's beef imports have jumped this year and are on pace for an annual record. Karan Beef is also looking at Malaysia as a new export market and is due to undergo an audit to ensure it meets the country's halal standards early next year.
The South African beef industry more broadly is under pressure to increase production to meet local and international demand, said Gerhard Schutte, Chief Executive Officer at the Red Meat Producers Organization. One possibility is building capacity of small-scale farmers, who own about 40% of the nation's livestock, but lack the competitiveness required for export markets, he said. In October, the Karan family agreed to sell a 90% stake in the business to the Public Investment Corporation (PIC), Africa's biggest fund manager and the custodian of South African civil servants pensions, and black-owned Pelo Agricultural Ventures for R5.2-billion in one of the biggest attempts yet to address the legacy of apartheid in South African farming. The deal is the PIC's largest to date in the agriculture sector, said head of corporate affairs Deon Botha. The family will continue to manage the business for the foreseeable future, said Karan. An earlier offer of R6-billion for the entire business by Chinese investors who wanted to export all of the output was rejected, he said.
"We have to ensure we leave our legacy properly," Karan said. "Do you really want to be the guy that sold out South Africa?"
HOGS: (meatingplace.com) -- China and Spain will on Wednesday sign an accord on the export of Iberian ham to China, a Spanish government source said on Tuesday, in a deal that will include coveted, on-the-bone legs of pork.
The two countries have been negotiating a protocol on the export of pork products from Spain to China since 2016 and the agreement aims to include a wide range of pork products, according to the Spanish agriculture ministry.
The agreement is part of a series of deals to be signed during the visit of Chinese President Xi Jinping, who arrives in Spain later on Tuesday for a two-day visit as part of a stop off on his trip to a meeting of G20 leaders in Argentina Friday and Saturday.
A broader accord on the Chinese "Belt and Road Initiative" - a wide-ranging development strategy adopted by the Chinese government involving global infrastructure projects - would not be signed, the Spanish government source said.
In a column published in Spanish daily ABC, Xi wrote that the aim of his trip to Europe and Latin America was to discuss how to "strengthen the unity of the international community," which he said was needed "at a time of unprecedented challenges, most of all the growing protectionism and unilateralism."
Xi made no direct reference in the column to U.S. President Donald Trump, who on Monday said he expected to move ahead with raising tariffs on $200 billion in Chinese imports to 25 percent from the current 10 percent.
Spanish ham, dry cured from specially-bred pigs, is considered a delicacy in gourmet circles though is often expensive in the few markets outside of Europe that have reached export accords with Spain.
