Wednesday, December 20, 2017

Wednesday Morning Livestock Market Update - Livestock Futures Set to Open Mixed at Midweek

GENERAL COMMENTS:

Cash cattle potential and expectation could take on more shape Wednesday. Opening bids should be around $115 to $116 in the South and $188 to $189 in the North. Showlists seem to be priced around $193 to $195 in the North and $122 plus in the North. We do believe buyers and sellers would like to complete marketing chores this week as soon as possible. That could mean bids and asking prices somehow come together by Thursday. Live and feeder futures seem staged to open on a mixed basis as specs and commercials position ahead of cash business and on feed news.
Cash hog buyers should resume work by midweek with basically steady bids. It sounds like Saturday's hog kill could exceed 300,000, yet next Tuesday's slaughter will reflect more holiday time. Lean futures should also open with mixed price actions thanks to a combination of short-covering and long liquidation.

BULL SIDE BEAR SIDE
1) The deflation of deferred live cattle futures is beginning to look excessive, especially as we move toward the first day of winter and the threat of production checked by extreme weather. 1) Beef cutouts closed significant lower Tuesday, reflecting the pre-Christmas apathy of meat buyers. Note that boxed beef supplies were described as "heavy."
2) Though it seems to be taking its own sweet time, February live futures tends to move higher from mid- to late December on a seasonal basis. 2) As the cattle board droops, the strengthening of the basis could work to soften feedlot resolve on hold for higher asking prices.
3) The pork carcass value closed moderately higher on Tuesday, supported by stronger demand for fresh cuts and ribs. 3) Market hogs are expected to lose weight for the remainder of 2017, but this 5-pound premium over the previous year may not be able to deteriorate rapidly. Expect animals to remain above prior-year levels by several pounds, possibly until mid-February.
4) The pork cutout is still at a premium to last year, and the recent corrective-type price break was from levels not thought possible given the supply of hogs available. In other words, pork demand remains quite strong. 4) Hog prices will likely decline over the next two or three weeks, especially since packer's experience reduced harvest levels due to holiday schedules and are not likely to demand the same level of live inventory.


OTHER MARKET SENSITIVE NEWS
CATTLE:

(Business Insider) -- McDonald's much-anticipated new value menu means massive prices cuts for customers.

Credit Suisse found in "anecdotal pricing checks" that McDonald's upcoming "$1, $2, $3 menu" will result in a roughly 15% price reduction across the chain's the full menu.

"MCD's new 1,2,3 value menu appears geared towards recovering this traffic, which is likely to partly come at the expense of check," analyst Jason West wrote in a note on Tuesday.

According to West, some items are already being sold at similar prices, leading up to the launch of the new value menu. Others-- including Happy Meals-- are going to have their prices slashed by up to 25%.

McDonald's is rolling out the new value menu on January 4.

The $1 items include menu offerings such as the Sausage Burrito, McChicken, and Cheeseburger. Items including the 2-piece Buttermilk Crispy Tenders, Bacon McDouble, and McCafé beverages will be sold for $2, and Happy Meals and Triple Cheeseburgers will cost $3.

Executives have admitted that McDonald's has struggled to attract value-minded customers since killing the Dollar Menu in 2013.

While the McPick 2 has helped drive sales over the past year, a new national Dollar Menu is a major move to win over customers looking for value. The company is throwing a huge amount of weight behind the effort, increasing its already massive national advertising budget by 20% starting in 2018.

HOGS: (WLFI) -- A local pork producer in Indiana just made a sizable investment in the community's future.

The $30 million addition adds 125,000 square feet of space to the Indiana Packers compound in Carroll County.

Indiana Kitchen bacon and pork products are in grocery stores across the Midwest.

The new larger distribution center will allow the company to expand to more stores.

Although the new space doesn't add any immediate jobs, growth can only mean one thing.
"As our company continues to grow, as we continue to drive our business, that growth represents future opportunity for people looking for work, for people who want to come work for us and the people in this community," said Curtis Hansen, the director of marketing at IPC.

Indiana Packers has been in business in Delphi for 26 years.


The company says this is just another example of its long-term commitment to Carroll County.

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