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Thursday, November 30, 2017

Thursday Closing Livestock Market Summary - Cattle Futures Surrender Much of Midweek Rally

GENERAL COMMENTS
Light-to-moderate trade volume surfaced in parts of the South with most live deals marked at $121, generally $3 higher than last week. Scattered dressed deals were reported in parts of the North at $190, a bit more than $1 higher than last week's weighted average basis Nebraska. A few live deals were also booked in Nebraska at $120-$121, steady to $1 higher. According to the closing report, the national hog base is $0.72 higher ($53-$60.50, weighted average $59.27). Corn futures finished several cents higher, supported by light commercial buying. Jazzed by improving chances of the Senate passing tax reform, the stock market exploded to new highs. The Dow closed 331 points higher (at 24,272) and the Nasdaq settled up 49.
LIVE CATTLE
Pressured by long liquidation and cash uncertainty, live futures settled 62 to 162 points lower. Spot December closed right on its 40-day moving average, but deferreds remain above the same measures of support. Beef cut-outs: significantly lower, off $1.63 (select: $184.21) to $1.91 (choice: $204.94) with light-to-moderate demand and moderate-to-heavy offerings (99 loads of choice cuts, 35 loads of select cuts, 16 loads of trimmings, 40 loads of ground beef).
FRIDAY'S CASH CATTLE CALL:
Steady/firm with Thursday. Look for moderate trade volume to develop sometime prior to the weekend break, especially in the North.
FEEDER CATTLE:
Feeder futures closed sharply lower as well, off 77 to 150 at final settlement. Both January and March closed slightly below 40-day moving averages. Having said that, nearby issues seem to be treading these days in a narrow, lateral range. CME cash feeder index: 11/29: $156.92, up $0.11.
LEAN HOGS:
Another round of profit-taking and long liquidation caused lean hog futures to close 40 to 120 points lower. Yet recent backtracking looks more correction in nature than trend-changing. Summer 2018 contracts are holding far above 40-day moving averages. Carcass value held about steady with stronger hams and ribs countering weakness in fresh cuts and bellies. Pork cut-out: $83.40, off $0.05. CME cash lean index for 11/28: $62.96, up $0.07 (DTN Projected lean index for 11/29: $62.99, up $0.03).
FRIDAY'S CASH HOG CALL:
Steady to $1 higher. Hog buyers should open with steady/firm bids in the more as they complete plans for another large Saturday kill (i.e., around 240,000 head).

Thursday Midday Livestock Market Summary - Cattle Futures Post Sharp Pressure Thursday Morning

GENERAL COMMENTS: 
Sharp losses have quickly developed across the cattle complex Thursday morning. This overall lack of support may continue to add price pressure in both live cattle and feeder cattle markets at the end of the month. Hog markets remain mixed with pressure developing across the cattle trade, and limiting additional market support. Corn prices are higher in light trade. December corn futures are 3 cents per bushel higher. Stock markets are higher in light trade. The Dow Jones is 324 points higher while Nasdaq is up 49 points.
LIVE CATTLE:
Early trade that backed away from previous gains gained momentum through the complex with losses of $1 to $2 per cwt through all contracts. This lack of support at the end of the month is not totally surprising, although there continues to be some increased market concern about the ability to draw additional active buyer support back into the market through the next couple of weeks. Beef demand is expected to remain firm through the end of the year, potentially limiting additional market pressure in the near future. Cash cattle activity remains light with cash trade still being put off until later in the afternoon or potentially sometime Friday. Live bids are seen at $117 to $118 per cwt while dressed bids remain at $188 to $190 per cwt. Beef cut-outs at midday are lower, $0.70 lower (select) and down $0.94 per cwt (choice) with activity movement of 123 total loads reported (56 loads of choice cuts, 23 loads of select cuts, 14 loads of trimmings, 30 loads of ground beef).
FEEDER CATTLE:
Sharp triple-digit losses have quickly flooded into all cattle markets. The feeder cattle trade appears to be the main driver of the lower prices with increased uncertainty developing in the complex. Nearby futures are holding $3 per cwt at midday, leaving concern for additional losses to develop through early December.
LEAN HOGS:
Lean hog futures remain mixed in a narrow trading range with the overall lack of direction developing on the last trading session of the month. This market activity may lead to additional pressure through the end of the trading session, although the sharp losses in cattle trade have seen very little spill over impact in the hog market through the morning. Cash prices are higher on the National Direct morning cash hog report. The weighted average price added $0.09 at $58.64 per cwt with the range from $56.00 to $60.00 on 5,364 head reported sold. Cash prices are higher on the Iowa/Minnesota Direct morning cash hog report. The weighted average price added $0.79 at $59.62 per cwt with the range from $57.50 to $60.00 on 2,514 head reported sold. The National Pork Plant Report posted 177 loads selling with carcass values gaining $0.48 per cwt. Lean hog index for 11/28 is at $62.96 up $0.07 with a projected two-day index of $62.89, up $0.19.

Thursday Morning Livestock Market Summary - Hog Futures Set for Moderately Higher Recovery

GENERAL COMMENTS:

Look for cattle-buying interest to slowly take shape Thursday with starter bids around $117 to $118 in the South and $190 in the North. Asking prices should be floated around $121 to $122 in the South and $193 to $195 in the North. Needless to say, it will help country leverage if the board stays firm. Significant trade volume could easily be delayed until sometime Friday.
The cash hog trade continues on an unusual post-Thanksgiving roll. Opening bids are likely to begin steady to $1 higher. Look for a harvest level this week to exceed 2.5 million, with the potential to hit 2.6 million head. Lean futures should open moderately higher, supported by short-covering as well as strong cash and product sales.

BULL SIDE BEAR SIDE
1) Cattle bulls continued to build board premiums Wednesday. The weakening basis should help stiffen the resolve of feedlot managers in terms of pricing ready steers and heifers. 1) Beef cutouts dropped sharply lower at midweek. Furthermore, the description of box offerings as "heavy" suggests that more discounting may be necessary.
2) Spot December live cattle tends to weaken in the early part of December and then move higher through the rest of the month. 2) Continued large declines in open interest in December live cattle and a modest decline in February resulted in total open interest declining by 1,500 on Tuesday to 379,000 contracts.
3) The pork carcass value exploded higher on Wednesday, powered by better demand for all primals except the rib and butt. 3) For the week ending Nov. 25, U.S. hatcheries set 224 million eggs in incubators, up 2% from a year ago. At the same time, chicks placed totaled 175 million chicks; up slightly from 2016.
4) Although lean hog futures closed moderately lower Wednesday, the pullback seemed little more than short-term profit-taking. Long- and short-term trends remain positive. 4) For the week ending Nov. 25, Iowa barrows and gilts averaged 285.8 pounds, 1.3 lbs. bigger than the prior week and 5.3 lbs. greater than 2016.


OTHER MARKET SENSITIVE NEWS

CATTLE: (Nikkei) -- Japan's government is poised to maintain a provision that jacks up tariffs on frozen U.S. beef in the event of a sharp increase in imports -- a mechanism that initially riled the Trump administration when it was triggered in August.

The so-called safeguard measure was agreed on as part of the 1995 Uruguay Round of multilateral trade negotiations. In exchange for voluntarily lowering the beef tariff to 38.5%, Japan gained the right to raise it to 50% should import volumes exceed a predetermined limit. The Ministry of Finance wants to maintain this framework in the fiscal year starting April 2018.

This summer saw the safeguard put into use for the first time in 14 years. The ministry determined that imports of American beef exceeded the limit in the April-June quarter. The higher tariff will remain in place until the end of March 2018.

The U.S. beef industry and President Donald Trump's agriculture secretary called on Japan to immediately lower the tariff, to no avail. But during Trump's summit with Japanese Prime Minister Shinzo Abe here this month, the U.S. side exerted little pressure on Japan to open up its agricultural markets, and the Finance Ministry saw no particular American objections to maintaining the safeguard mechanism.

Given the rising Japanese demand for U.S. frozen beef, this may not be the last time the snapback provision is triggered.

HOGS: (foodmarket.com) -- The National Pork Board, the Iowa Pork Producers Association, Smithfield Foods, Inc. and PrairieFresh® Premium Pork joined forces to support the second annual #HamsAcrossAmerica campaign in Central Iowa. The organizations hosted a kickoff event, on Giving Tuesday, to serve clients of the Central Iowa Shelter and Services and provided a nearly 70,000-pound pork donation to the Food Bank of Iowa, courtesy of Smithfield Foods, Seaboard Foods, Triumph Foods and U.S. pig farmers.

"As pig farmers, giving back to our community always has been an integral part of who we are," said Bill Tentinger, a pig farmer from Le Mars, Iowa, who serves on both the National Pork Board and the Iowa Pork Producers Association board of directors. "Hams Across America and this kickoff event allow me and other farmers to live the We CareSM ethical principles and share our love of the product that we produce."

The annual #HamsAcrossAmerica campaign encourages farmers and those involved in the pork industry to show appreciation for friends, family and neighbors through the gift of ham and other pork products.

"Smithfield is proud to participate in Giving Tuesday with the National Pork Board and support the positive impact it provides for so many of our neighbors in need," said Dennis Pittman, senior director of hunger relief for Smithfield Foods. "As a global food company with Iowa-based facilities, Hams Across America aligns with Smithfield's commitment to resolve hunger across the country and to cater to the communities we call home."

"On behalf of all those in our connected food system at Seaboard Foods and Triumph Foods who raise and care for our pigs and produce pork for the PrairieFresh® brand, we understand the importance of supporting our communities whether that be someone next door in Iowa or a world apart," said Terry Holton, Seaboard Foods president and CEO. "With Hams Across America, we're honored to share our products so others might enjoy delicious, wholesome meals this holiday season."


Pig farmers and those involved in the pork industry are encouraged to extend Giving Tuesday through Dec. 23 with Hams Across America. Individuals can participate by purchasing a gift of ham and paying it forward to loved ones and those in need. Participants are encouraged to share their pay-it-forward stories on social media using #RealPigFarming and #HamsAcrossAmerica.

Wednesday, November 29, 2017

Wednesday Closing Livestock Market Summary - Cattle Futures Regain Support in Late Day Trade

GENERAL COMMENTS
Cash cattle trade remains undeveloped midweek in feedlot country with a few bids developing through the morning at $117-to-$118 live basis and $188 dressed. Asking prices are becoming more defined through the week with cattle priced at $121 and higher live and $192-to-$195 dressed. The Fed Cattle Exchange Auction report Wednesday listed a total of 967 head, with 0 actually sold, 750 head listed as unsold, and 217 head listed as PO (Passed Offer). The state by state breakdown looks like this: KS 223 total head, with 0 head sold, 118 head unsold, 105 head listed as PO ($118.00); NE 507 total head, with 0 head sold, 507 head unsold, and 0 head listed as PO; TX 237 total head, with 0 head sold, 125 head unsold, and 112 head listed as PO ($117.00); CO -- no cattle reported; IA -- no cattle reported; other states -- no cattle reported. The delivery date/weighted averages breakdown is as listed: 1-9 day delivery: 865 head total, 0 head sold; 1-17 day delivery -- no cattle reported; 10-17 day delivery -- no cattle reported; 17-30 day delivery 102 head total, 0 head sold. According to the closing report, the national hog base is $0.73 higher compared with the Prior Day settlement ($52.00-$60.00) weighted average $58.81. The corn futures moved higher in light activity. December futures were 2 3/4 cents higher Wednesday. The Dow Jones Index is 103 points higher with the Nasdaq down 88 points.
LIVE CATTLE
Firm gains redeveloped late in the session Wednesday following a market shift, which sparked selling pressure through most of the morning ($0.07-to-$0.92 Higher). The ability for moderate-to-strong buyer activity to hold in nearby contracts pushed December futures above $120 per cwt for the first time in nearly two weeks. This could spark some additional end of the month buyer activity and may stimulate additional support through early December. Beef cut-outs: lower, $1.36 lower (select, $185.84) and down $2.08 (choice, $206.55) with light demand and moderate offerings (112 loads of choice cuts, 44 loads of select cuts, 14 loads of trimmings, 24 loads of coarse grinds).
THURSDAY'S CASH CATTLE CALL:
Steady to $2 Higher. Cash cattle markets remain generally undeveloped with packers showing a little interest midweek as a few scattered bids have slowly developed. Bids were seen at $117-to-$118 live and $188 dressed. This is expected to be where bids early Thursday morning will pick up, but may not gain the attention of feedlot managers until late Thursday or sometime Friday.
FEEDER CATTLE:
Strong gains developed late in the session despite moderate pressure seen during the session, allowing for higher trade Wednesday ($0.15-to-$1.07 Higher). Choppy moves in live cattle trade during the middle of the trading session pulled initial buyer support back from the complex. But the inability to maintain this selling pressure has created some late day support as traders quickly focused on stepping back into the complex through the end of the session. CME cash feeder index for 11/28 is $156.81, up $0.06.
LEAN HOGS:
Early support in lean hog futures Wednesday morning was quickly disrupted by moderate pressure that swept through the complex. This was not able to draw buyer interest back into the complex in nearby futures through the second half of the session. Light gains developed in deferred futures. Contracts remain mixed at closing bell ($0.67 lower to $0.22 Higher). Carcass values posted triple-digit gains following aggressive support in Loin, Picnic and belly markets. This move higher helped to draw additional attention to the entire complex. Pork cut-out: $83.45 up $1.22. CME cash lean index for 11/27 $62.89, down $0.19. DTN Projected lean index for 11/28 $62.96 up $0.07.
THURSDAY'S CASH HOG CALL:
Steady to $1 lower. Despite the spending activity seen early Wednesday, packers still seem to be focused on the overall availability of hogs in the market. With the end of the month looming Thursday, there may be some market shifts as packers try to adjust inventory levels. Thursday's slaughter is expected at 465,000 head with an expected Saturday run at 238,000 head.

Wednesday Midday Livestock Market Update - Livestock Futures Maintain Mixed Price Shifts Midweek

GENERAL COMMENTS: 
Mixed trade is seen through the market Wednesday morning. The inability to hold early gains has put some moderate pressure through the complex. This may limit additional support through the entire complex. Corn prices are higher in light trade. December corn futures are 2 cents per bushel higher. Stock markets are mixed in light trade. The Dow Jones is 75 points higher while Nasdaq is down 84 points.
LIVE CATTLE:
Buyers stepped into the live cattle futures complex early in the session Wednesday, but pressure in deferred contracts has quickly limited follow through during the morning. Even though nearby contracts are holding firm gains of 40 to 55 cents per cwt, there continues to be additional uncertainty in deferred contracts. This could limit additional market activity through the rest of the session. Cash cattle interest is slowly improving although the overall tone of the market remains sluggish. A few token bids have started to develop through the morning at $117 to $118 live and $188 dressed. Asking prices are showing more definition during the morning with live cattle listed at $121 and higher while dressed asking prices are seen from $192 to $195 through morning activity. The Fed Cattle Exchange Auction report today listed a total of 967 head, with 0 actually sold, 750 head listed as unsold, and 217 head listed as PO (Passed Offer). The state by state breakdown looks like this: KS 223 total head, with 0 head sold, 118 head unsold, 105 head listed as PO ($118.00); NE 507 total head, with 0 head sold, 507 head unsold, and 0 head listed as PO; TX 237 total head, with 0 head sold, 125 head unsold, and 112 head listed as PO ($117.00); CO -- no cattle reported; IA -- no cattle reported; other states -- no cattle reported. The delivery date/weighted averages breakdown is as listed: 1-9 day delivery: 865 head total, 0 head sold; 1-17 day delivery -- no cattle reported; 10-17 day delivery -- no cattle reported; 17-30 day delivery 102 head total, 0 head sold. Beef cut-outs at midday are lower, $0.17 lower (select) and down $1.66 per cwt (choice) with activity movement of 108 total loads reported (67 loads of choice cuts, 18 loads of select cuts, 9 loads of trimmings, 15 loads of ground beef).
FEEDER CATTLE:
Strong support has redeveloped in nearby feeder cattle futures with front month January prices holding a 70 cent per cwt gain. This underlying support has redeveloped following mixed trade activity through the morning. Very little long term direction is seen through the last couple of trading sessions with many traders trying to search for increased buyer activity, especially in nearby contracts.
LEAN HOGS:
Mixed trade activity is seen midday Wednesday following moderate to stronger buyer support early in the session. Very little has changed technically or fundamentally across the complex, although early buyer activity quickly backed away from the market Wednesday morning. This has left prices mixed in a moderate range from 50 cents lower to 40 cents higher as traders continue to search for increased market support. Cash prices are higher on the National Direct morning cash hog report. The weighted average price added $0.34 at $58.42 per cwt with the range from $52.00 to $60.00 on 2,946 head reported sold. Cash prices are higher on the Iowa/Minnesota Direct morning cash hog report. The weighted average price added $0.62 at $59.03 per cwt with the range from $52.00 to $60.00 on 1,186 head reported sold. The National Pork Plant Report posted 164 loads selling with carcass values gaining $1.32 per cwt. Lean hog index for 11/27 is at $62.89 down $0.19 with a projected two-day index of $62.96, up $0.07.

Wednesday Morning Livestock Market Summary - Hog Paper Staged to Open With Firm Undertone

GENERAL COMMENTS:
Cattle-buying interest could begin to show life Tuesday. Perhaps action on the FCE will spark greater thoughts of business in the country. Feedlot managers will also be watching the board before getting too excited about pricing ready steers and heifers. Our guess is that asking prices will start out around $121 to $122 in the South and $192 to $195 in the North. Significant trade volume may not surface until Thursday or Friday. Look for live and feeder futures to open some higher, girded by residual short-covering and ideas of cash market stability.
Hog buyers should resume work at midday with firm bids, building on the more aggressive spending pattern displayed on Tuesday. It sounds like packers are planning another large Saturday kill, perhaps as large as 245,000 head. Bullish action on the board Wednesday was quite impressive without 2018 issues setting new contract highs. Lean futures should open solidly higher Tuesday, supported by follow-through buying and surprisingly friendly late-year fundamentals.
BULL SIDEBEAR SIDE
1)Live and feeder contracts successfully shook off heavy selling late day, closing no worse than mixed, thanks to aggressive short-covering and ideas of cash stability/firmness.1)Wednesday's closing box report served up more disappointing evidence of post-Thanksgiving beef demand. Cutouts settled lower with the choice box losing nearly a buck. Furthermore, box supplies were described as "moderate to heavy."
2)February and April are carrying larger than average premiums to December, which is positive to producer attitudes for late in the year and heading into the new year. A continuation of these large premiums could start encouraging producers to slow marketing rates in the coming weeks, in an effort to boost cash cattle prices and capture some of the premiums implied by the current market.2)The chief executive of Brazilian meatpacker Minerva said on Tuesday that the company, based on consultations with the country's agriculture ministry, expects Brazil to resume fresh beef exports to the U.S. in the first quarter of 2018.
3)In a shocking display of late-fall strength, the national lean hog base surged $1.30 higher on Tuesday with apparently short-bought packers gathering as many as 21,565 head on a dressed basis.3)Successful Farmer's recent "Pork Powerhouses 2017" confirmed very aggressive expansion plans. When all 40 companies surveyed are summarized, there are almost a-quarter-million more sows Tuesday than there were one-year ago, the most expansion this annual survey has seen in 10 years.
4)The late-year rally in lean hog futures really gathered steam on Tuesday with December through April surging by triple digits. There seems to be growing confidence in some circles that the worst of the fourth quarter supply fundamentals are behind us.4)Notwithstanding Wednesday's isolated cash jump, evidence of hog availability suggests packers can be patient in pulling hogs, as even more hogs are available right around the corner.
OTHER MARKET SENSITIVE NEWS
CATTLE: (moultrieobserver.com) -- Local and corporate dignitaries celebrated an expansion of National Beef Monday with a groundbreaking for a 40,000-square-foot addition to the meat processor's Moultrie plant.
"This expansion we're about to undertake will transform this facility into one of the premium consumer-ready facilities in the country," National Beef CEO and President Tim Klein said during the ceremony.
The expansion is expected to add 100 jobs to the 300 people already employed there, company officials said. The work force numbered 450 at its peak in 2013.
Klein mentioned "lean times" that started that year, when Wal-Mart did not renew its contract for meat from the company. "But you stayed with us," he gratefully told representatives of plant employees as well as leaders of the community.
Hiring is expected to begin in the third quarter of 2018, with the new part of the plant to come on-line in the fourth quarter.
This expansion will involve an investment of more than $30 million to include a physical plant expansion as well as new processing and packaging equipment, David Davidson, vice president of case ready operations, told The Observer when the expansion was announced two weeks ago.
Darrell Moore, president of the Moultrie-Colquitt County Development Authority, recounted the history of meat packing in Colquitt County. Moultrie Packing Company-- opened in 1914 and was bought by Swift and Co. in 1917-- is responsible for the mascot of the high school football team, the Colquitt County Packers, he said. Swift and Co. employed more than 700 people at its peak in the 1950s.
Swift and Co. was bought out by Premium Pork, which eventually closed the plant in 1996, and Moore said economic development officials immediately started trying to market the facility with little success.
He said they were trying to get a hamburger plant to expand there from out of town in 1999, but the company kept putting them off. When he asked them why, they told him they were watching a competitor that was considering a move to Middle Florida. They didn't want to act until they saw what the competitor was going to do. He asked who the competitor was, and they said, "Farmland-National Beef."
"Thirty minutes later I was on the phone with Farmland-National Beef," Moore said.
The facility opened in 2001, the first beneficiary of the state's One Georgia EDGE Grant, which continues to use proceeds from the tobacco settlement of the late 1990s to help create jobs throughout the state.
"Moultrie and Colquitt County definitely got the right company," Moore said. "… I know National Beef is committed to Moultrie. I know we're committed to National Beef. I only hope they're here for 82 years like the first one (Swift and Co.)."
HOGS: (wnax.com) -- The Trump administration's focus for trade has been achieving bilateral agreements. One potentially good deal and market for U.S. pork would be India. National Pork Producers Council Vice President and Counsel for Global Government Affairs Nick Giordano says while India may not be as big a market as Japan, it has promise for American pork exports just due to its large population base.
He says another advantage to doing business with India is there aren't any sensitive trade issues for negotiators to overcome.
Giordano says USDA Undersecretary for Trade and Foreign Affairs Ted McKinney was in India recently and that bodes well for future pork business.
McKinney says India could begin allowing U.S. pork into their country as early as next year.

Tuesday, November 28, 2017

Tuesday Closing Livestock Market Summary - Live Cattle Futures Stabilize in Late-Day Trade

GENERAL COMMENTS
Cash cattle trade interest remains generally undeveloped with bids and asking prices still hard to pin down through cattle country. The overall lack of interest by packers may push active trade off until late in the week. There is a report that some cattle in the South are priced at $121 per cwt. Both asking prices and bids are expected to become more evident through the day Wednesday. According to the closing report, the national hog base is $1.30 higher compared with the Prior Day settlement ($50-$60) weighted average $57.92. The corn futures moved lower in light activity. December futures were 2 1/2 cents lower Tuesday. The Dow Jones Index is 255 points higher with the Nasdaq up 33 points.
LIVE CATTLE
Even though cattle futures closed lower, late-day buying helped to offset initial triple-digit losses as the market ended with slight-to-moderate pressure ($0.02 to $0.45 Lower). Position-squaring early in the session as traders tried to adjust positions following the early week gains helped to push prices sharply lower through most of the session. But overall lack of volume in the complex in the waning minutes of trade allowed prices to partially recover. Front-month December contracts moved nearly $1 per cwt above session lows and closed just 17 cents per cwt lower at $119.65 per cwt. Beef cut-outs: lower, $0.08 lower (select, $187.20) and down $0.94 (choice, $208.63) with light-to-moderate demand and moderate to heavy offerings (86 loads of choice cuts, 45 loads of select cuts, 9 loads of trimmings, 28 loads of coarse grinds).
WEDNESDAY'S CASH CATTLE CALL:
Steady to $2 higher. Trade interest remains sluggish going into midweek. With bids and asking prices generally hard to fully pin down, it is expected to be the tail end of the week before active trade develops. Packer interest will likely pick up Wednesday morning as the Fed Cattle Exchange Auction may also give more definition to trade direction through the morning Wednesday.
FEEDER CATTLE:
Light buying support trickled into the feeder cattle complex at the end of the session despite pressure through most of the day ($0.05 to $0.40 higher). Pressure in live cattle futures through most of the session left feeder cattle traders trying to catch up and look for additional market support while buyers seemed to be willing to stand on the sidelines focusing on a market pullback from Monday's gains. But late-day support stepped into all feeder cattle futures just before closing bell. Even though light pressure continues to develop in live cattle trade, the focus on firmness in feeder cattle markets is still the main support through the complex. CME cash feeder index for 11/27 is $156.75 up $1.49.
LEAN HOGS:
Moderate-to-strong buyer support returned to the market as buyers quickly focus on firming market tones ($0.10 to $1.42 higher). Triple-digit gains held in nearby contracts, which is helping to spark additional buyer support through the week as front-month futures have posted a $3-per-cwt rally over the last couple of weeks based on renewed commercial support quickly moving back into the market. This is not only adding support to futures markets, but also helping to stimulate buying in the cash hog and pork complex through the end of November. Carcass values shifted lower as all primals moved lower except for ribs and bellies, which posted gains over $2 per cwt. The sharp losses in picnics led the entire complex lower. Pork cut-out: $82.23 down $0.35. CME cash lean index for 11/24 $63.08, down $0.58. DTN Projected lean index for 11/27 $62.89 down $0.19.
WEDNESDAY'S CASH HOG CALL:
Mixed. Very little additional market direction is expected to be seen across the complex as packers seem to be able to easily find market-ready hogs to fill procurement schedules. The expectation that increased overall processing speeds will develop over the coming weeks is being countered by uncertainty of pushing the system even harder given the current hogs going through on a weekly basis. Wednesday's slaughter is expected at 465,000 head with an expected Saturday run at 251,000 head.

Tuesday Midday Livestock Market Summary - Cattle Futures Turn Lower Tuesday

GENERAL COMMENTS: 
Early pressure in cattle trade has added to the selling activity through the morning in both live cattle and feeder cattle futures. Lean hog futures remain firmly higher with triple-digit gains seen in nearby contracts. This mixed price movement is keeping trade volume moderate through the morning. Corn prices are lower in light trade. December corn futures are 2 cents per bushel lower. Stock markets are higher in light trade. The Dow Jones is 157 points higher while Nasdaq is up 16 points.
LIVE CATTLE:
Moderate to strong pressure is seen in the live cattle complex with spring 2018 contract holding triple-digit losses, although overall volume remains sluggish. This could limit further market activity through the trading session and most of the week. As of now, much of the pressure seen during early trade appears to be based on potential market moves in beef values. Cash cattle markets are quiet with bids and offers hard to pin down at this point. A few cattle have been priced at $121 in the South, but overall feeders continue to keep asking prices pretty concealed. Active trade is expected to be delayed until the last half of the week. Beef cut-outs at midday are mixed, $2.01 higher (select) and down $0.13 per cwt (choice) with activity movement of 91 total loads reported (42 loads of choice cuts, 22 loads of select cuts, 9 loads of trimmings, 18 loads of ground beef).
FEEDER CATTLE:
Light to moderate selling pressure is seen through the feeder cattle complex with traders focusing on additional market pressure in live cattle markets. This could spark even wider losses through the end of the session although trade volume remains sluggish. Prices are 60 to 70 cents lower although the pressure in live cattle markets could bring about additional late day losses through the complex. Trade seems to remain sluggish also, causing some concern that the inability to draw further buying back into the market may create a void in the market and add to the uncertainty through the end of the month.
LEAN HOGS:
Strong buyer support has moved back into the lean hog futures complex Tuesday morning following the ability to focus on the recent gains in futures trade and sustained follow-through support in cash hogs and pork values. Trade remains moderate at best although the underlying support is seen most aggressively in February and April futures which are holding triple digit gains. The expectation that increased buyer activity will continue to develop over the near future. Cash prices are higher on the National Direct morning cash hog report. The weighted average price added $1.47 at $58.09 per cwt with the range from $50.00 to $60.00 on 8,994 head reported sold. Cash prices are higher on the Iowa/Minnesota Direct morning cash hog report. The weighted average price added $1.86 at $58.93 per cwt with the range from $55.00 to $60.00 on 4,725 head reported sold. The National Pork Plant Report posted 207 loads selling with carcass values gaining $0.58 per cwt. Lean hog index for 11/24 is at $63.08 down $0.58 with a projected two-day index of $62.89, down $0.19.

Tuesday Morning Livestock Market Summary - Cattle Futures Likely to Open on a Mixed Basis

GENERAL COMMENTS:
If should be a typically slow Tuesday in cattle country with neither bids nor asking prices well defined. Buying interest could start to take shape at midweek, but significant trade volume will probably be delayed until Thursday or Friday. Our guess is that asking prices will start out around $120 to $122 in the South and $192 to $195 in the North. Live and feeder futures should open on a mixed basis, linked to a combination of follow-through buying and long liquidation.
Hog buyers should resume work Tuesday with bids ranging from steady to $1 lower. Although slaughter got off to a slow start Monday, look for packers to push the pedal to the metal through the balance of the week. Lean futures seem staged to open moderately higher, boosted by residual buying interest and ideas of manageable fundamentals through the end of the year.
BULL SIDEBEAR SIDE
1)Live and feeder futures closed sharply higher on Monday. Spot December live closed a little above the 40-day moving average, and more than 400 points above the 100-day moving average.1)The post-holiday beef trade got off on the wrong foot Monday. Significant losses in cutouts hardly suggested a strong recovery in red meat demand following the traditional white meat feast.
2)Although new showlists distributed in feedlot country Monday were mixed (i.e., larger in Kansas and Colorado, smaller in Texas and Nebraska), the overall offering appears to be smaller than last week.2)For the week of Nov. 21, noncommercials aggressively reduced their net-long position in live cattle futures, down by 8,500 to a total of 130,000 contracts.
3)The short-term trend in lean hog futures has turned positive. The long-term market trend is positive as well, as is the structure of the market.3)Despite Monday's pop in lean hog futures, prospects of large available hog supplies in the weeks ahead and questions whether pork demand will be adequate to clear the additional tonnage, continue to check late-year bullish enthusiasm.
4)The seasonal index reflects a strengthening price pattern into the expiration of the December contract and the recent advance in December futures is confirming that tendency.4)For the week ending Nov. 21 noncommercial traders reduced their net-long position in lean hog futures by 5,400 contracts to 52,000.
OTHER MARKET SENSITIVE NEWS
CATTLE: (Maeil Business Newspaper) -- American beef that once had been shunned by Koreans over mad cow scare reclaimed the past glory of being responsible for more than half of imported beef that goes on Korean tables.
According to data from the Korea International Trade Association (KITA), U.S. beef imports during the January to October period this year amounted to $989 million, taking up 50.7 percent in the nation's imported beef market.
American beef took up more than 50 percent of the market for imports from 1993 to 2003 when its share in the local market hit an all-time high of 75.9 percent. In 2004, however, the share plummeted to 17.5 percent as the country banned the imports of U.S. beef in 2003 following mad cow disease outbreak in the U.S.
The country eased the ban from 2008 allowing in meat from cattle aged less than 30 months after holding several rounds of talks with the U.S. from 2006 to 2008.
The mad cow disease scare triggered a nation-wide protest in the early days of import resumption, but the market share of American beef has steadily increased since then. The gain is largely attributable to the free trade deal between Korea and the U.S. that took effect in 2012, according to market experts.
U.S. beef took up the largest share in the local imported beef market over the first 10 months of this year, after accounting for 37.4 percent in 2012, 42.2 percent in 2014 and 46.2 percent in 2016.
Meanwhile, the share of Australian brand fell to 43.6 percent during the same period, after reaching its peak of 78.8 percent in 2006.
HOGS: (GlobalMeatNews) -- Swine biology business Genesus Inc has acquired the French arm of Denmark-based Pork-Ex for an undisclosed sum.
Pork-Ex France is a small pig breeding company, employing 10 staff, based in the north-western city of Pacé, Brittany.
It was bought by Genesus to give the Canadian pig genetics outfit better access to the EU market, which is home to around 150 million pigs, according to Eurostat.
Genesus, based in Manitoba, Canada, is a pig breeder and genetics specialist and claims to have one of the largest pedigree pure-bred swine herds in the world.
Prior to the takeover, it had worked alongside Pork-Ex for over a year, collaborating on swine genetics in an attempt to make inroads into Europe's huge, albeit currently declining, pig industry.
During the year Genesus worked with Pork-Ex, it "became clear" that the business needed to launch a takeover of the firm's French subsidiary, Pork-Ex France, to secure "even better access" to Europe, Genesus said in a statement.

Monday, November 27, 2017

Monday Closing Livestock Market Update - Meat Futures Return From Holiday Thankful, Bullish

GENERAL COMMENTS
Activity in cattle feeding country Monday was limited to the distribution of new showlists. The late-month offering appears to be mixed, larger in Kansas and Colorado, but smaller in Texas and Nebraska. Overall, the post-holiday offering appears to be smaller than the previous week. According to the closing report, the national hog base is .44 lower ($50.00-58.00, weighted average $56.65). Corn futures closed 3 cents plus lower, hounded by the same negative forces addressed throughout the fall (i.e., large supplies and disappointedly slow exports). The stock market closed mixed with the Dow up 22 points and the Nasdaq off 10.
LIVE CATTLE
Live cattle futures returned from the holiday break with a clear sense of bullish mission. Closing prices spiked 95 to 160 points higher, powered by aggressive short coming and technical buying. Spot December managed to close above its 40-day moving average for the first time November 16. Beef cut-outs: significantly lower, off .57 (select: $187.28) to $1.42 (choice: $209.57) with light to moderate demand and offerings (50 loads of choice cuts, 23 loads of select cuts, 7 loads of trimmings, 12 loads of ground beef).
TUESDAY'S CASH CATTLE CALL:
Steady. Look for bids and asking prices to stay poorly defined with significant trade volume easily postponed until the second half of the week.
FEEDER CATTLE:
Feeders followed the bullish lead of the live market, closing 90 to 135 points higher. The March contract successfully closed above its 40-day moving average. Buying was also encouraged by lower corn prices and the premium status of the cash index. On an estimated run of 7,200 head (i.e., near unchanged from last week and 2016), Oklahoma City sold feeder steers and heifers steady to higher. Calves were marked mostly steady to $3 higher. CME cash feeder index: 11/24: 155.26, off .32.
LEAN HOGS:
Lean hog contracts extended the board's late November rally Monday, closing 30 to 127 higher. Pushing back over 64, spot December landed the best close seen since November 6. Carcass value closed moderately higher as stronger demand for butts and picnics overshadowed lower loin and rib sales. Pork cut-out: $82.58, up .26. CME cash lean index for 11/23: NA (DTN Projected lean index for 11/24: 63.08, off .58).
TUESDAY'S CASH HOG CALL:
Steady to $1 lower. The cash hog trade is expected to resume business in the morning with steady/weak bids.

Monday Midday Livestock Market Summary - Strong Gains Draw Buyers Back to the Complex

GENERAL COMMENTS: 
Strong gains have quickly developed Monday morning with increased buyer activity moving into all markets. This could help to spark increased price support as traders could bring additional underlying support to the market. Corn prices are lower in light trade. December corn futures are 2 cents per bushel lower. Stock markets are mixed in light trade. The Dow Jones is 33 points higher while Nasdaq is down 7 points.
LIVE CATTLE:
Triple-digit gains are seen in the live cattle complex. This may bring additional underlying support to the entire market. With December contracts testing $120 per cwt price levels, the underlying support in the market early in the week continues to drive buyers to the complex. Cash cattle markets are undeveloped with bids and offers unavailable at this point. There continues to be some additional uncertainty given the upcoming end of year and Christmas holidays. Trade may not develop until the last half of the week. Beef cut-outs at midday are mixed, $0.78 higher (select) and down $0.77 per cwt (choice) with light movement of 24 total loads reported (12 loads of choice cuts, 7 loads of select cuts, no loads of trimmings, 5 loads of ground beef).
FEEDER CATTLE:
Strong buyer support is moving into feeder cattle futures following the sluggish activity late last week. But the main focus continues to be placed on the gains in the live cattle complex. This may spark additional underlying buyer activity from both commercial and investment buyers through the end of the month.
LEAN HOGS:
Firm gains have quickly developed through the lean hog futures complex. This will likely limit any additional direction through the complex, although there will be some additional movement that could develop over the near future. With December contracts holding gains over $1 per cwt, buyers are stepping into most contract months given the overall support. Cash prices are lower on the National Direct morning cash hog report. The weighted average price fell $0.79 at $56.30 per cwt with the range from $50.00 to $56.67 on 3,272 head reported sold. Cash prices are unreported due to confidentiality on the Iowa/Minnesota Direct morning cash hog report. The National Pork Plant Report posted 59 loads selling with carcass values gaining $0.48 per cwt. Lean hog index for 11/22 is at $63.66 down $0.32 with a projected two-day index of $63.08, down $0.58.

Monday Morning Livestock Market Update - Meat Futures Set for Moderate Gains on Opening

GENERAL COMMENTS:
Even with the full cash team finally back in town, activity in feedlot country will be limited to the distribution of new showlists. Assuming that last week's slow activity resulted in a certain number of unsold steers and heifers carried over, the late month offering could be somewhat larger than the prior week. Yet at the same time a good case can be made that cattle buyers will start out this morning closer to the knife than we've seen in several weeks. Live and feeder futures should open moderately higher, supported by short covering and cash premiums.
Look for the cash hog trade to open with generally steady bids. Pork processing margins are decent, it recent wholesale sign suggest that late year demand in hanging in there quite well. The product market should be tested very soon this week given Saturday's large kill. The big question between now and mid December is whether or not weekly chain speed will need to be significantly jacked in order to handle ready numbers. Some believe we will see record kill surface this week and possibly next. Lean futures are geared to open moderately higher, supported by follow-through buying and stronger carcass value.
BULL SIDEBEAR SIDE
1)Red meat demand typically gets a big shot in the arm following Thanksgiving; middle meat demand especially tied to holiday parties should be a late-month/late-year boost.1)Net beef export sales for the week ending November 16 totaled no more than 9,276 MT, unchanged from the previous week, but down 38 percent from the prior four-week average.
2)For the week ending November 16, actual beef exports jumped to 17,408 MT, up 10 percent from the previous week and 11 percent from the prior 4-week average.2)For the week ending November 11, cattle carcass weights generally grew heavier: all cattle averaged 830 pounds, 1 pound larger than the prior week and 13 pounds lighter than 2016; heifers averaged 834 pounds, 1 pound heavier than the 1 previous week and 10 pounds smaller than last year. Steer averaged unchanged from the prior week (i.e., 902 pounds) and 16 pounds lighter than 2016).
3)For the week ending November 16, net pork export sales totaled 16,300 MT, up 24 percent from the previous week and 1 percent from the prior 4-week average. At the same time, actual exports totaled 24,500 MT up 2 percent from the previous week and 4 percent from the prior four-week average.3)More times than not, the several slaughter weeks following Thanksgiving represent the largest rounds of hog kills and pork production seen throughout the year.
4)A good number of analysts who have closely studied the shortfall in market hogs documented since Labor Day (vis-à-vis the September 1 inventory) believe that the market has already seen extreme slaughter peaks for the fourth quarter come and go.4)Though live hog weights basis Iowa fractionally declined during the week ending November 18, scale tickets are now 4 pounds above the late fall of 2016 and could stay that way through mid December.
OTHER MARKET SENSITIVE NEWS
CATTLE: (Texas Monthly) -- If you enjoy eating or smoking Prime grade beef, prepare for a dip in the national supply. A new carcass camera-grading technology, likely due to inaccuracy, provided elevated marbling scores to USDA graders from February through mid-October. The Gigabit Ethernet, or "Gig E," is used to determine the grade of half the nation's beef, and a recent correction in the calibration has sent the supply of Prime and Choice beef tumbling down.
The USDA's primary job is to ensure the safety of the meat you consume. Their inspectors are sent to slaughterhouses across the country, at taxpayer expense, to make sure filthy carcasses don't enter the food supply. But there's another arm of the USDA that inspects for meat quality. They show up to the packing plants on the packers' dimes and determine beef grades: Prime being the best, followed by Choice, Select, and the rest.
It used to be that these inspectors put their eye on every carcass. They'd stare at the face of the ribeye cut between the twelfth and thirteenth rib and check for marbling within the meat, the thickness of the outer fat, and the ossification of the cartilage. In 2009, the USDA allowed the use of cameras to assist in determining the marbling score. At the time, the technology was billed as more accurate than the human eye—especially given the ever-increasing speed at which the carcasses came down the line—and came into wide use.
The USDA's current upper limit on what is known as "line speed" is nearly 400 cattle per hour, or one steer every nine seconds. Dan Hale, a meat science professor at Texas A&M, described the problem in a 2010 article. "A grader must assess carcass maturity, marbling score, ribeye area, fat thickness, the amount of fat in the kidney, pelvic and heart regions, and yield and quality grades," all within that tight timeframe. And so the USDA welcomed the help of a camera to provide a marbling score. Dr. Jeff Savell, also of Texas A&M, says the school—which is involved in the National Beef Quality Audit every five years—found no accuracy problems with the technology in 2011 or 2016. But Savell says they haven't had the chance to use, let alone audit, one of the new Gig E (no relation to Gig 'Em) cameras that came into use this year.
It's unclear what triggered the recalibration a few weeks ago. Looking at 2016 data, the national average of Prime and Choice beef has seen little variation year over last, that is until the cameras were corrected. The amount of Prime beef coming out of Kansas and Nebraska packing plants has taken a downward trend, while the numbers out of Texas have been largely unchanged (which may be due to fewer Texas plants using the technology). Savell guesses that it was just a hiccup in the process of bringing Gig E into use.
Savell likens the camera-generated grades to computer-generated strike zones in baseball. The umpire behind the plate introduces a human factor that with meat comes in the form of USDA graders. Before the first cameras were put into use, there was an effort to dial in its grading pattern to better mimic the grader's judgment, and that's what is likely happening with the Gig E now. But in baseball, the ump pays close attention to each and every pitch.
The speculation about how the calibration might affect Prime beef supplies has moved prices up. The hiccup here with the Gig E brings up another question about the automation of what used to be done solely by graders. This automation's purpose is to help cope with fast-paced line speeds. The Gig E is supposed to provide a speedy and accurate marbling score in response, but there are plenty of other scores where there isn't yet an automated camera to do the job. The DEXA X-ray is currently being tested to assess beef yield grades, and who knows what's next? Let's just hope they work out any calibration issues before these new systems go into full operation. These cameras shouldn't be adding any fat.
HOGS: (feedstuff.com) -- The 11 remaining members of the Trans-Pacific Partnership (TPP) recently announced plans to move forward with a modified trade agreement. U.S. Meat Exporter Federation (USMEF) economist Erin Borror explained that if the agreement -- now known as the Comprehensive & Progressive Agreement for Trans-Pacific Partnership (CPTPP) -- is implemented without the U.S. as a participant, it will create significant tariff rate advantages for competitors of U.S. beef and pork.
"U.S. beef had the most to gain and the most at stake," Borror explained, adding that Australia, Mexico and Chile are already benefiting from lower tariffs into Japan and will receive additional lowering of tariffs under the new agreement. CPTPP would provide even more tariff relief for beef imported from these countries and would lower tariff rates on Japan's imports of Canadian and New Zealand beef.
The U.S. has free trade agreements in place with several CPTPP countries, but the major exceptions are Japan and Vietnam. Japan's beef import safeguards, which are administered on a quarterly basis for countries that do not have trade agreements with Japan, would shift to annual safeguards for beef imports from CPTPP countries, making them less likely to be triggered. Under Japan's frozen beef safeguard, the tariff rate on U.S., Canadian and New Zealand beef was recently increased from 38.5% to 50%, where it will remain through March 31, 2018.
CPTPP would provide tariff relief for Canadian pork -- the U.S.'s largest competitor in Japan's imported chilled pork market. Pork from Mexico and Chile would also gain market access beyond their current economic partnership agreements with Japan.
Perhaps the largest breakthrough in the CPTPP pork provisions is Japan's gradual elimination of tariffs on processed pork products -- something Japan has never previously included in a trade agreement. Borror noted that while the European Union is not included in CPTPP, the EU and Japan are expected to finalize an economic partnership agreement in the next few months that includes similar terms.
Borror explained that this would leave the U.S. as the only major pork supplier to Japan without a trade agreement in place.

Friday, November 24, 2017

Friday Closing Livestock Market Summary - Hog Contracts Close Holiday Week With Solid Price Progress

GENERAL COMMENTS
Feedlot country was dead quiet following Thanksgiving with both buyers and sellers apparently content with the weekly trade volume generated through Wednesday. According to the closing report, the national hog base is $0.45 higher ($50-$58.25, weighted average $57.10). The corn market settled 2-3 cent lower, pressured by discouraging export sales and a general lack of buying interest. Equities closed generally higher with the Dow advancing by 31 points and the Nasdaq gaining 21.

LIVE CATTLE
Technically, live futures closed on a mixed basis, ranging from 10 points higher in the far deferred to 90 lower in nearby February. Yet most of the action was of the selling variety, fueled by long liquidation and post-holiday profit-taking. Beef cut-outs: mixed, up $1.98 (choice: $210.99) to off $0.79 (select: $187.85) with light-to-moderate demand and offerings (38 loads of choice cuts, 24 loads of select cuts, 6 loads of trimmings, 14 loads of ground beef).

MONDAY'S CASH CATTLE CALL:
Steady. Monday will be typically slow with cash players focusing exclusively on the distribution of new showlists.

FEEDER CATTLE:
Feeder contracts closed 52 to 90 points higher, supported by short-covering, lower corn prices, and the premium of the cash index. Trade volume was extremely light. CME cash feeder index: 11/21: $156.58, off $0.13.

LEAN HOGS:
Lean issues settled 20 to 52 points higher with the help of follow-through buying and sign of cash stability. Spec and commercials will spend much of next week assessing likely production levels through the balance of 2017, and whether or not enough late-year pork demand can be marshaled to handle the supply situation. Carcass value closed moderately higher, supported by all primals except the picnic and butt. Pork cut-out: $82.32, up $0.34. CME cash lean index for 11/21: $63.98, off $0.43 (DTN Projected lean index for 11/22: $63.66, off $0.32).

MONDAY'S CASH HOG CALL:

Steady to $1 lower. Look for hog buyers to return to work on Monday with steady/weak bids and expecting a large late-month run of barrows and gilts.

Friday Midday Livestock Market Update - Lean Hog Futures Hold Moderate Gains in Late Morning Biz

GENERAL COMMENTS: 
The cash cattle trade at midday is a nonevent with buyers and sellers still suffering from turkey hangover and/or preoccupied with Black Friday specials at the local mall. Both sides are apparent content with trade volume totals generated through Wednesday. According to the midday report, the national hog base is 0.78 lower ($50.00-58.00, weighted average $55.87). The corn trade is sagging by several cents, checked by discouraging export sales and post-holiday apathy. The stock market is higher near the top of the noon hour with the Dow up 51 points and the Nasdaq positive by 19.

LIVE CATTLE:
Live futures are mixed just before an early close (i.e., 12:15 CST) with prices ranging from 17 higher to 47 lower. Generally speaking, nearby issues are losing ground to their deferred counterparts. In light trade volume, the front-end is pressured by long liquidation and post holiday profit taking. Beef cut-outs are mixed at significantly higher at midday, up $1.75 (choice, $210.76) to $2.00 (select, $190.64) with very light box movement (30 loads of choice cuts, 10 loads of select cuts, zero loads of trimmings, 7 loads of coarse grinds).

FEEDER CATTLE:
For the most part, feeder issues in late-morning business are moderately higher, supported by short covering, softer corn prices, and the premium status of the cash index.

LEAN HOGS:
Hog futures have held moderate progress through the late week session and now look set to settle in the neighborhood of 22 to 55 points higher. Light buying has been consistent thanks to positive momentum carried over from Wednesday and ideas that fundamentals will remain manageable through the end of the year.

Carcass value at midday is modestly higher with stronger loin and ham sales overshadowing softer picnic, butt, and rib sales. Pork cut-out: $82.17, up 0.19. CME cash lean index for 11/20: 64.41, off 0.42 (DTN Projected lean index for 11/21: 63.98, off 0.43).