Friday, June 29, 2018

Friday Closing Livestock Market Summary - Fourth-Quarter Lean Hog Futures Close With New Contract Lows

GENERAL COMMENTS
Light to moderate trade volume developed in several areas of cattle feeding country Friday. Late-week sales ranged from $107 to $108 on a live basis, $1 to $2 higher than midweek, and generally $1 to $2 lower than last week. The National hog base closed off $0.19 compared with the Prior Day settlement ($68-$78.50, weighted average $76.69). From Friday to Friday, livestock futures scored the following changes: Jun LC off $1.27; Aug LC up $0.82; Aug FC up $2.12; Sep FC up $1.13; Jul LH up $3.05; Aug LH up $1.08. Corn futures closed a nickel plus higher despite USDA reports that looked somewhat negative (corn acers totaled 89.13 million; June 1 corn stocks totaled 5.3 billion bushels), supported by hot weather worries in areas experiencing pollination. The stock market closed higher with the Dow up 55 points and the Nasdaq better by 6.
LIVE CATTLE
Futures closed mostly sharply higher, up 300 to off 120. Besides expiring June, most live contracts finished the month and quarter with an impressive bullish flurry. New spot August and October closed limit up, over 100-day moving averages and at the highest price levels seen since March 19. The late-week burst in buying energy seemed tied to aggressive short-covering, technical-buying and signs of late-week packer appetite. Beef cutouts: lower (choice, $211.96 off $1.28, select $198.57 off $2.09) on light demand and moderate-to-heavy offerings (55 loads of choice cuts, 39 loads of select cuts, 13 loads of trimmings, 23 loads of coarse grinds).
MONDAY'S CASH CATTLE CALL:
Steady. Activity on Monday should be typically slow as packers move to assess the early July size of showlists.
FEEDER CATTLE:
Futures closed sharply higher, up 155 to 450. Feeders followed the bullish lead of their counterparts in the live market. Spot August closed limit up, landing its highest finish since March 5. There's some thinking that aggressive placement through the first half of 2018 could mean that feeder supplies in the second half of the year will be tighter. CME cash feeder index: 06/28: $142.00, off $0.55.
LEAN HOGS:
Futures closed widely mixed, off 202 to up 175. Action here seemed logical in the face of the June 1 Hogs and Pigs report. Specifically, deferred contracts closed significantly lower with traders bracing for record fourth-quarter pork production now that they know of the huge spring pig crop. Indeed, October and December broke to new contract lows early in the session. Positively, most deferred contracts did manage to close approximately 100 points above session lows. Pork cutout: $87.38 (FOB Plant) off $0.21. CME cash lean 06/27: $84.32, off $0.50 (DTN Projected lean index for 06/28: $83.69, off $0.63.
MONDAY'S CASH HOG CALL:
Steady/weak. Hog buyers should resume work on Monday with near-steady bids, mindful that the season's most promising combination of supply and demand may have already come and gone.

Friday Midday Livestock Market Summary - Deferred Lean Hog Issues Sag with Triple-Digit Losses at Midday

GENERAL COMMENTS: 
Light to moderate trade volume is evident in several areas of cattle feeding country at midday with some live sales as much $1-2 higher than Wednesday on a live basis (i.e., $107-108). According to the midday report, the national hog base is 0.31 lower compared with the Prior Day settlement ($68.00-78.50, weighted average $76.57). Despite acres (i.e., 89.13 million) and June 1 stocks (i.e., 5,306 billion bushels) that came in a little larger than expected, corn futures are holding forward progress of 3-4 cents near the top of the noon hour. The stock market is solidly higher at midday with the Dow up 236 points and the Nasdaq positive by 41
LIVE CATTLE:
Beside the expiring spot month, live futures are sharply higher going into the final hour of the session (i.e., up 180 to 300). Aggressive end of the quarter short covering/profit taking and technical buying seem to be the major workhorses. August through December have climbed above 100-day moving averages at midday. Spot June is scheduled to officially expire at 12:00 CST. Beef cut-outs are lower at midday, off 0.08 (choice, $213.16) to 0.83 (select, $199.83) with light to moderate box movement (27 loads of choice cuts, 26 loads of select cuts, 10 loads of trimmings, 14 loads of coarse grinds).
FEEDER CATTLE:
Feeder futures are on fire at midday (i.e., up 287 to 440), supported by spec and technical buying. Spot August is trading at its highest level since March 7. Some believe that the aggressive pace of feedlot placement through the first half of 2018 will limit available feeder supplies in the second half of the year.
LEAN HOGS:
Lean hog futures are widely mixed at midday with summer issues well-supported (i.e., up 90 to 177) and deferred contracts under triple digit selling pressure (i.e., off 70 to 197). Spooked by the threat of record fourth-quarter pork production. October and December gapped early to new contracts lows. While they remain under pressure, some deferreds have rallied as much as 200 points off early lows. Carcass value is more than a buck lower at midday, especially pressured by softer demand for ribs (off $7.44), hams (i.e., off $1.85), and loins (i.e., off 0.74). Pork cut-out: $86.57, off $1.02. CME cash lean index for 06/27: 84.32, off 0.50 (DTN Projected lean index for 06/28: 83.69, off 0.63).

Friday Morning Livestock Market Summary - Look for Early Pressure on Lean Hog Futures Tied to Expansion News

GENERAL COMMENTS:
The late-week feedlot trade should be quite slow with business probably limited to scattered sales of steers and heifers at price levels essentially established at midweek (i.e., $106 live; $169 to $170 dressed). Live and feeder futures should open moderately lower, pressured by struggling carcass value and a lack of follow-through buying interest. Spot June live is scheduled to expire at high noon.
Hog buyers should wrap-up procurement chores Friday with basically steady bids. Assuming a Saturday kill around 25,000 head, the weekly slaughter should total close to 2.2 million. This week and next are expected to be the lowest harvest levels for this summer season, probably moving higher after the holiday week. Lean futures are expected to open significantly lower thanks to the pork production challenges confirmed by the June 1 Hogs & Pigs report.
BULL SIDEBEAR SIDE
1)
Finally, in its last trading hours, spot June live has spot $2 over feedlot cash. While the promise of leadership came too late for June (it expires at noon Friday), the new spot price closed above its 40-day moving average on Thursday.
1)
Wholesale beef prices continue to fail with the choice cutout quoted more than $2 lower on Thursday. Seasonally, the beef trade typically doesn't bottom below late July or early August.
2)
Net beef export sales last week totaled 18,400 metric tons (MT), up 10% from the previous week. Actual exports for the same period totaled 18,200 MT, down 2% from the previous week, but up 5% from the prior four-week average.
2)
For the week ending June 15, steers carcasses averaged 856 pounds, 5 pounds more than the previous week; heifers averaged 791 pounds, 4 pounds more than the week before.
3)
Net pork export sales last week totaled 24,300 MT, up noticeably from the previous week and up 77% from the prior four-week average.
3)
The USDA confirmed Thursday a record large spring pig crop of 33.2 million head, 4% larger than the spring of 2017 and the largest since the data series began in 1970.
4)
While still relatively poor, pork processing margins seem to be slowly improving. The Saturday kill now looks close to 25,000 head, small but larger than last week as well as early-week estimates.
4)
Actual pork exports totaled 14,700 MT, down 25% from the previous week and 28% from the prior four-week average.
OTHER MARKET SENSITIVE NEWS: 
CATTLE: (brownfieldagnews.com) -- The Senate is in the process of considering amendments to its version of the farm bill, including one to restrict checkoff programs.
New Jersey Senator Cory Booker says the checkoff programs only represent the interests of a small number of farmers.
"That's what the amendment would do: prohibit conflicts of interest, require more transparency, mandate that the USDA publish budgets and expenditures that the USDA approves," he says. "The amendment would prohibit anti-competitive behavior."
Also commenting on checkoff programs, North Dakota Senator Heidi Heitkamp, said it's critical that they function as intended.
"In order to be preserved and protected from necessary scrutiny," she says. But Indiana Joe Senator Joe Donnelly tells Brownfield the ag community usually knows what works in checkoff programs.
"I've found on the checkoff programs, in large measure, as long as the farm community helps to lead the checkoff programs, they know what works and what doesn't," he says.
Utah Senator Mike Lee and New Hampshire Senator Maggie Hassan also worked on the amendment.
HOGS:(Hoosier Ag Friday) -- Agriculture Secretary Sonny Perdue in Chicago this week says he is hopeful his aid program for farmers will be released by Labor Day and the harvest season. Perdue spoke at the United Fresh event Tuesday and told the Chicago Tribune that while farmers want "trade, not aid," the Department of Agriculture is following the trade war on a "weekly basis," and assessing the impacts of trade disputes while having a plan ready to assist farmers. Perdue continues to hold off on announcing those plans, but conceded he has "probably" given himself a "Labor Day deadline" with the corn and soybean harvest looming.
Perdue says he and USDA see the trade environment as "temporary." A 25 percent tariff on U.S. soybeans as part of the trade dispute will take effect next week. While there may not be enough export capacity globally for China to stop all U.S. soybean purchases completely, Brazil's production and exports are growing, and China is seeking alternatives to U.S. agricultural products.

Thursday, June 28, 2018

Thursday Midday Livestock Market Summary - Cattle Futures Post Solid Gains at Midday

GENERAL COMMENTS: 
The cash cattle trade is at a near standstill so far today in the wake of moderate to fairly active volume generated on Wednesday. Some are suggesting that between yesterday's movement and large formula resources, cash business may be done for the week. Yet we do see a small sample of bids repeated from Wednesday ($106 live; $170 dressed). Steers and heifers still on showlists are prices around $108 live and $172 plus dressed. According to the midday report, the national hog base is 0.84 lower compared with the Prior Day settlement ($69.00-76.50, weighted average $76.10). Corn futures are fractionally lower near the top of the noon hour as the trade list marks time before the release of Friday reports. The stock market is mixed near midday with the Dow off 11 points and the Nasdaq up 7.
LIVE CATTLE:
Live futures open near flat, drifted some lower, but then began to attract buying interest. The market seems well supported at midday, up 20 to 85. Support seems linked to short covering and oversold charts. Beef cut-outs are mixed at midday, up 0.22 (select, $201.10) to off $1.01 (choice, $214.29) with light to moderate box movement (26 loads of choice cuts, 20 loads of select cuts, 4 loads of trimmings, 12 loads of coarse grinds).
FEEDER CATTLE:
Feeder contracts are also solidly higher at midday, up 37 to 107. Yet there's little here to suggest that the market is set to break out of a lateral trading range anytime soon.
LEAN HOGS:
Lean prices are mixed as we move into the session's final hour (up 90 to off 37). Spot July and August are well supported at the expense of deferred issues. Anticipating the confirmation of a huge spring pig crop by this afternoon's June 1 H&P report (to be released this afternoon at 2 CDT), the spread between summer and fall lean contracts continues to widen. Carcass value at midday is modestly higher with rib and ham weakness overshadowed by stronger demand for bellies, picnics, and fresh cuts. Pork cut-out: $87.86, up 0.20. CME cash lean index for 06/26: 84.82, off 0.81 (DTN Projected lean index for 06/27: 84.32, off 0.50).

Thursday Morning Livestock Market Update - Lean Hog Issues Set for Mixed Opening Ahead of Hogs & Pigs News

GENERAL COMMENTS:
Moderate-to-active trading developed in parts of cattle-feeding country at midweek with most live sales marked at $106, $2 to $3 lower than last week. Dressed sales in the North were mostly tagged $170, $3 to $4 lower. More business seems likely in Texas and Colorado, but opening bids are not likely to be better than steady to $1 lower. Live and feeder futures should open moderately lower, checked by cash and product weakness.
The cash hog market seems ready to open with bids steady to $1 lower. The June 1 Hogs & Pigs report will be released Thursday afternoon at 2 p.m. (CT). Average guesses look like this: total hogs, up 3%; kept for breeding, up 1% to 2%; kept for market, up 3%. Lean futures are likely to open on a mixed basis as traders jockey ahead of the quarterly inventory.
BULL SIDEBEAR SIDE
1)
Although cattle futures closed no better than mixed, most contracts settled significantly above session lows. Such action could be an important piece in market-bottoming formation.
1)
Cash cattle prices broke $2 to $3 lower on a live basis Wednesday in parts of Nebraska and Kansas. Feedlot leverage seems to be melting in the face of discounted futures and bearish expectations regarding midsummer beef demand.
2)
Week-to-date cattle slaughter is running below last week. Couple this with reduced production next week around the holiday and reduced tonnage should stabilize/firm beef carcass value in early July.
2)
Beef cutouts closed significant lower at midweek with box demand (typically the strongest on Wednesday) described as "light."
3)
With October lean hog futures already trading $14 below the August contract, the board may already be bearish enough for whatever numbers the June report can dish out. Additionally, the management of fourth quarter tonnage will be helped by new additions to chain speed.
3)
For the week ending June 23, U.S. hatcheries set 231 million eggs in incubators, up 3% from a year ago. At the same time, broiler-grower chicks placed totaled 189 million, up 3% from 2017.
4)
For the week ending June 23, Iowa barrows and gilts averaged 278 pounds, .5 less than the prior week and 1.1 pounds more than 2017.
4)
The June 1 quarterly Hog & Pigs report to be released Thursday afternoon at 2 p.m. (CT) is expected to total just over 73 million hogs, nearly 3% larger than last year. It is likely to be a record large June 1 inventory for a June through August time frame and slightly lower than the all-time record inventory of last September 1 by half a million animals.
OTHER MARKET SENSITIVE NEWS: 
CATTLE: (BBC) -- China has ended a two-decades-long ban on exports of beef from the UK, first introduced after the outbreak of BSE -- or "mad cow disease" -- in the 1990s.
The government said the development will be worth 250m pounds to British producers over the next five years.
It comes after years of site inspections and negotiations between UK and Chinese government officials.
It now allows official market access negotiations to begin, a process which usually takes around three years.
The announcement comes after Prime Minister Theresa May's trade mission to China earlier this year, during which President Xi Jinping signaled that a lifting of the beef ban would be happen soon.
Chancellor Philip Hammond, who is visiting China this week, tweeted: "This is great news for British farmers."
The UK currently sells more than £560m of food and drink from the farming sector a year to China, making it the eighth-biggest export market for such products.
"Thursday's milestone will help to unlock UK agriculture's full potential and is a major step to forging new trading relationships around the globe," said a Department for Environment statement.
The announcement comes two days after China signed a deal to lift a ban on French beef imposed more than a decade ago.
HOGS: (Quad-City Times) -- The same day a national political journal reported on Iowa Republicans' support for President Donald Trump, despite rising tensions and the threat of a trade war, members of the Iowa congressional delegation wrote the president expressing concern that retaliatory tariffs will harm Iowa's farmers.
"Mr. President, these tariffs have real consequences on states like Iowa, rural communities across the nation and on America's farms," the four House and two Senate members wrote to the president. "We encourage you to act expeditiously to save our rural economies." In pleading Iowa's case, the Iowa congressional delegation said farmers are experiencing a five-year, 52 percent downturn in the agricultural economy.
"These tariffs are taxes Iowa families cannot afford," they wrote.
The letter was sent to the White House the same day Politico reported that at Republican Party of Iowa's recent state convention, delegates were asked whether they supported the president.
"In an exuberant display of unity, more than 1,100 delegates sprang to their feet, whistling, cheering and offering prolonged applause," Politico reported.
Times Bureau columnist Erin Murphy had previously reported on the reaction at the convention in a column Sunday.
The letter follows an earlier warning to the president from Republican Reps. Rod Blum, David Young and Steve King, and Democratic Rep. Dave Loebsack, and GOP Sens. Chuck Grassley and Joni Ernst that agriculture would be the first industry hurt in a trade dispute.
Markets for soybeans, corn and pork are trading significantly lower than before the president started imposing tariffs.

Wednesday, June 27, 2018

Wednesday Closing Livestock Market Summary - Cattle Futures Close Mixed, But Well Above Session Lows

GENERAL COMMENTS
Light to moderate trading developed in several cattle feeding states with the best test evident in Nebraska and Kansas. Most live deals were marked at $106, generally $2 lower. The national hog base closed off $1.04 compared with the prior day settlement ($70-$78, weighted average $77.03). Corn futures settled virtually unchanged as traders cautiously positioned before Friday's stocks and acreage reports. The stock market reversed from early gains, closing 165 points lower basis the Dow, and 116 lower basis the Nasdaq.

LIVE CATTLE
Futures closed mixed, up 110 to off 32. Soon-to-expire spot June attracted the most buying interest as it prepares to converge with the cash market before expiration. Most contracts traded in the red throughout the day. But a late rally allowed prices to settle generally 100 points above session lows. Beef cutouts: weak to lower (choice, $215.30 off $1.53, select $200.88 off $0.69) on light demand and light-to-moderate offerings (65 loads of choice cuts, 29 loads of select cuts, 20 loads of trimmings, 17 loads of coarse grinds).

THURSDAY'S CASH CATTLE CALL:
Steady/weak with Wednesday. Look for trade volume to increase on Thursday and Friday at prices near steady with the midweek trade.

FEEDER CATTLE:
Futures closed mostly moderately lower, off 12 to 85. It was one of those days when closes could have been worse. Feeder issues were pressured through most of the session, but late short-covering worked to allow contracts to settle near the highs of the day. CME cash feeder index: 06/26: $141.78, up $0.03.

LEAN HOGS:
Futures closed mixed, up 110 to off 15. Spot July closed back above 80, supported by the premium of the cash index as well as ideas that ready hog supplies should remain manageable for the next 30-45 days. Having said that, the action was quite slow as traders jockeyed for position ahead of the June 1 Hogs and Pigs report due out Thursday. Pork cutout: $87.66 (FOB Plant) up $0.25. CME cash lean 06/25: $85.63, off $0.57 (DTN Projected lean index for 06/26: $84.82, off $0.81.)

THURSDAY'S CASH HOG CALL:

Steady to $1 lower. Hog buyers should remain on the defensive in the morning as they continue to work toward better processing margins.

Wednesday Morning Livestock Market Update - Look for Further Lean Hog Strength on Opening, Especially in the Front-End Contract

GENERAL COMMENTS:

Packer inquiry in cattle-feeding country could slowly start to develop at midweek. Look for initial bids around $105 live and $172 dressed. Our guess is that feedlot managers will start out pricing steers and heifers around $110 plus live and $178 plus dressed. Significant trade volume could easily be delayed until Thursday or Friday.
Hog buyers should resume work on Wednesday with bids steady to $1 lower, hoping to extend the strengthening of leverage since late last week. While processing margins have been improving, they remain pretty bleak. Chain speed seems to be running a bit faster. Weekly slaughter should total close to 2.21 million head. Lean futures seem set to open moderately higher, supported by follow-through buying and the premium of the cash index.

BULL SIDE BEAR SIDE
1)
With the cost of live inventory dropping faster than cutouts, beef processors own decent margins and appear to have a formidable commitment to tonnage over the next several weeks. This reality should lend some support to the cash cattle trade.
1)
Cattle futures closed little better than mixed on Tuesday, a pretty puny dead cat bounce in the wake of Monday's ugly price fall.
2)
Although May placement (2.124 million head) exceeded trade expectations and matched the large in-movement of late spring 2017, the average size of animals placed was considerably different than last year. Placements less than 600 pounds were up 45,000 head (11%less than a year ago), while placements over 800 pounds were down 2%. This points to a broader scattering of ready cattle this fall, one that may be more manageable vis-a-vis demand.
2)
The discount of late-summer livestock futures, coupled with the danger of excessive heat to both consumer demand and animal heath, could soften the selling resolve of producers.
3)
The pork carcass value continues to show good strength. The cutout closed solidly higher again on Tuesday thanks to better demand for all primals except the ham.
3)
The fact that the Fourth of July holiday is falling in the middle of the week is likely to take away some of its punch in terms of retail meat buying.
4)
Although nearby lean hog bulls didn't manage to completely erase the board damage suffered on Monday, spot July did succeed in nosing back above its 100-day moving average.
4)
As far as lean hog futures are concerned, the short-term trend is bearishand sois the long-term trend. The structure of the market is also bearish with spot July trading at a discount to the current settlement index value, and the remaining contracts are trading at a discount to the July.


OTHER MARKET SENSITIVE NEWS:

CATTLE: (Feedstuffs) -- Joel Haggard, USMEF senior vice president for the Asia Pacific, said re-establishing a foothold in the world's fastest-growing beef market has not been easy, and the threat of new duties has already had an effect on customer interest in U.S. beef, especially in the form of a noticeable slowdown from some of the industry's loyal restaurant and retail partners.

"I think owners and operators are nervous not just about supply reliability after additional 25% duties imposed and, of course, the pricing, but they're also concerned about consumer response, especially if the war of words on the trade front escalates further," he said.

USMEF expects that the volume of beef entering China will decline once the higher duty rate takes effect.

"U.S. exporters can't be expected to lower prices by the extent of the duty because alternative markets exist for the U.S. beef products being shipped to China now, such as rib-eye, short ribs, chuck rolls, other steak cuts, etc. So, it really means we face the prospect of a significantly lower flow of beef coming into the marketplace here and very likely the loss of existing U.S. beef accounts ranging from Korean barbeque restaurants to steakhouses and supermarkets," Haggard said. "This is all very regrettable, because the U.S. beef industry has put a lot of effort and capital into getting things kick-started over here over the last year."

USMEF will continue to support loyal customers regardless of any larger turmoil and uncertainty as the group still believes China offers incredible long-term potential to the U.S. beef industry, he added.

HOGS: (American Farm Bureau Federation) -- A cookout of Americans' favorite foods for the Fourth of July, including hot dogs, cheeseburgers, pork spare ribs, potato salad, baked beans, lemonade and chocolate milk, will cost slightly less this year, coming in at less than $6 per person, says the American Farm Bureau Federation.

Farm Bureau's informal survey reveals the average cost of a summer cookout for 10 people is $55.07, or $5.51 per person. The cost for the cookout is down slightly (less than 1 percent) from last year.
"This is a very tough time for farmers and ranchers due to low prices across the board. It is appropriate that this very painful situation hitting farmers be reflected at the retail level as well," said AFBF Director of Market Intelligence Dr. John Newton. "We are seeing record meat and dairy production in 2018 so that has also influenced retail prices and so, for consumers, this year's Fourth of July cookout costs will be slightly less than last year's."

AFBF's summer cookout menu for 10 people consists of hot dogs and buns, cheeseburgers and buns, pork spare ribs, deli potato salad, baked beans, corn chips, lemonade, chocolate milk, ketchup, mustard and watermelon for dessert.

"Milk production in 2018 is projected at a record 218 billion pounds, contributing to lower retail milk prices," Newton said. While fluid milk prices have declined, tighter stocks of American cheese contributed to slightly higher cheese prices, he added.

Competition in the meat case continues to benefit consumers through lower retail prices, making grilling for July Fourth even more affordable for consumers this year, according to Newton.

A total of 96 Farm Bureau members in 28 states served as "volunteer shoppers," checking retail prices for summer cookout foods at their local grocery stores for this informal survey.

Tuesday, June 26, 2018

Tuesday Morning Livestock Market Summary - Look for Cattle Futures to Open at Least Moderately Lower

GENERAL COMMENTS:

Most cattle market monitors expect a typically quiet Tuesday with bids and asking prices poorly defined. Live and feeder futures should open at least moderately lower thanks to residual selling interest, technical worries and beef demand concerns.
The cash hog trade should open Tuesday with bids ranging from steady to $1 lower. Lean futures are likely to begin with mixed price action tied to follow-through selling on one hand and short-covering on the other. Indeed, with a major quarterly inventory waiting in the wings, we would be surprised to see major price swings in either direction as specs and commercials cautiously position ahead of the big news.

BULL SIDE BEAR SIDE
1)
New showlists distributed by cattle feeders on Monday were smaller than last week, especially in Kansas and Colorado.
1)
Cattle futures really took it on the chin Monday, crashed by the bearish on feed report and worries that beef production could overwhelm demand through the balance of the summer. Most actively traded August live was down the 300-point daily limit, with October not far behind. Most live contracts settled below their respective 40-day moving averages.
2)
Out-front boxed beef demand was once again very impressive last week. The National Comprehensive Boxed Beef Output report indicated that 1,575 loads were sold with delivery specs of 22 days and more. Such a total represents a high for 2018, surely reflecting a high degree of confidence in beef demand through midsummer.
2)
With next week scheduled to be broken up by the Fourth of July holiday, cattle buyers are starting the last full week of June with smaller shopping lists.
3)
The pork carcass value closed solidly higher Monday, supported by better demand for processing items and butts.
3)
The June 1 Hogs & Pigs report is expected to confirm the largest spring pig crop ever pulled in the history of the industry, possibly as large as 33 million head, nearly 4% more than last year. If confirmed, pork production in the fourth quarter will be record large, in critical need of both domestic/foreign demand and expanding chain speed.
4)
Hog weights still are forecast lower the next few weeks and likely will be within a pound of last year's weights through mid-July. Furthermore, hot temperatures are expected to return later this week, working again to limit finish floor gains.
4)
Lean hog futures usually trend lower from here into mid- to late July, as pork sales typically slow down.


OTHER MARKET SENSITIVE NEWS:

CATTLE: (AFP) -- Butchers in France have written to the interior minister to ask for protection against violence and intimidation from vegan campaigners who "want to impose their lifestyle on the immense majority of people."

The letter from the head of the CFBCT butchers' confederation, which represents 18,000 businesses across the country, was sent to Interior Minister Gerard Collomb last week and seen by AFP on Monday.

"We count on your services and on the support of the entire government so that the physical, verbal and moral violence stops as soon as possible," CFBCT head Jean-Fran├žois Guihard wrote in the letter.

Several butcher shops were vandalized and sprayed with fake blood in the Hauts-de-France region of northern France in April, while the CFBCT said there were also precedents in the southern Occitanie region.

As in other Western countries, eating habits are changing rapidly in traditionally carnivorous France where non-meat food options were once difficult to find on restaurant menus.

Vegetarianism and veganism have gained in popularity, leading to falling meat sales, while the animal rights movement is an increasingly visible presence in the media, led by campaigning actress Brigitte Bardot.

The butchers' group accused vegans of "wanting to impose on the immense majority of people their lifestyle, or even their ideology."

In March this year, a vegan cheesemaker was prosecuted over a Facebook message about a supermarket butcher who was killed in a terror attack.

"You are shocked that a murderer is killed by a terrorist," wrote the animal rights activist, named as Myriam by media. "Not me. I've got zero compassion for him, there's justice in it."

Faced with declining meat sales, farmers' groups have effectively lobbied the centrist government of President Emmanuel Macron in recent weeks to prevent measures seen as anti-meat.

A proposal to require schools to introduce a vegetarian meal at least once a week was dropped in parliament, while food producers have also battled to ban the use of "steak", "fillet", "bacon" or "sausage" for non-meat products.

A proposal was tabled in the form of an amendment to an agriculture bill in parliament in April, which would hit vegetarian or vegan products marketed as meat alternatives.

HOGS: (CNN) -- Rep. Steve King, Republican of Iowa, said Friday that he does not want Somali Muslims working in his home district's meat-packing plants for fear that they think consumers will go "to hell for eating pork chops."

In a conversation with Breitbart Radio on Friday about the latest immigration legislation, King shared anecdotes about immigrant food processing workers in his home district.

King claims that he spoke to Rep. Keith Ellison, a Minnesota Democrat who is also the one of only two Muslim members of Congress, about the employment of Somali Muslims in the factories around his house, calling Ellison "the lead Muslim in Congress." According to King, Ellison said that Somali Muslims must go to the Imam for "special dispensation" to handle pork. Ellison's office declined to comment. "The rationale is that if infidels are eating this pork, they aren't eating it, so as long as they're preparing this pork for infidels, it helps send 'em to hell and it'll make Allah happy," he said on the radio. "I don't want people doing my pork that won't eat it. Let alone hope I'll go to hell for eating pork chops."

According to an analysis done for the Des Moines Register by Liesl Eathington of Iowa State University, the percentage of workers in those plants of Somali origin make up less than one-third of 1% of the total number of workers.

King is known for his anti-immigration stances, saying that "we can't restore our civilization with somebody else's babies." King has also said he wants "an America so homogeneous that we look the same."

As a congressman from an Iowa district with a high concentration of meat-packing plants and pork packaging, King has made public comments about the pork industry before. Last week, King tweeted out an article about a Sweden soccer tournament that wiped pork from the menu.


"Sweden has capitulated to halal," he wrote.

Monday, June 25, 2018

Monday Morning Livestock Market Update - Cattle Futures Staged for Pressured Opening Thanks to Lower Cash and Large May Placement

GENERAL COMMENTS:
While feedlot managers successfully passed lower packer bids for one full week, they just couldn't keep shaking their heads through two. Country sellers finally had to come up for breath on Friday, selling moderate numbers $2 to $3 lower in the South (i.e., mostly $109) and $5 lower in the North (i.e., mostly $172).

Activity in feedlot country Monday will be limited to the distribution of new showlists. We expect the late-month offering to be steady to somewhat larger. Live and feeder futures should open significantly lower, pressured by cash weakness, beef demand concerns, and the negative implications of the June 1 Cattle on Feed report.

Cash hog buyers are expected to start work Monday with bids steady to $1 lower. Lean futures should open moderately lower, checked by long liquidation and suggestions that seasonal fundamentals are about as good as they're going to get.

BULL SIDE BEAR SIDE
1)
Despite all the trade-war talk, Asian demand for U.S. beef remains very strong. Japan buying continues to run aggressively, accounting for 37% of the total sales last week. South Korea continues to lead the year-over-year increases. Year-to-date weekly exports to South Korea are up 45% from a year ago, while China remains just a drop in the bucket, accounting for 3.9 million pounds of the 829.78 million pounds exported, year-to-date.
1)
Federally inspected cattle slaughter this week jumped to 664,000 head, 10,000 greater than last week. And given the consistent pattern since mid-April, it could easily be revised another 3,000 to 4,000 head.
2)
In the week ending June 19, noncommercial traders increased their net-long position in live cattle futures by 1,900 to 20,600 positions.
2)
The June 1 Cattle on Feed report released on Friday confirms a total equal to the large in-movement of late spring 2017 (i.e., the average trade guess expected a drop of 4%). Like last year, such a placement is historically large, roughly 11% larger than the five-year average.
3)
The June 1 Hogs & Pigs report will be released this Thursday. While the numbers should confirm further herd expansion, most believe the growth rate will be documented as slowing (even as chain speed potential continues to expand).
3)
Total red meat supplies in freezers as of May 31 were down 2% from the previous month but up 9% from last year. Total pounds of beef in freezers were down 1% from the previous month but up 13% from last year.
4)
The pork carcass value closed with a firm basis on Friday, supported by better demand for bellies, ribs and loins.
4)
At the same time, frozen pork supplies were down 2% from the previous month but up 6% from last year. Stocks of pork bellies were down 5% from last month but up 94% from last year.


OTHER MARKET SENSITIVE NEWS:

CATTLE: (KOSU) -- The Chinese government plans to implement retaliatory tariffs on $50 billion worth of American goods next month. Although beef is on the list, Oklahoma cattlemen are also keeping an eye on pork tariffs.

China is an up and coming market for Oklahoma's cattle ranchers. American producers just regained access to China as an export market when a 14-year ban on U.S. beef exports to the country was lifted last year.

But according to Michael Kelsey, the president of the Oklahoma Cattlemen's Association, most of the state's beef is consumed domestically, competing with other proteins like pork, which also faces tariffs.

"We're as equally concerned about the potential for a pork tariff in China as we are a beef tariff there," Kelsey said.

He says if China buys less pork, domestic pork supplies will likely increase.

"An increased supply of pork is gonna cause the price of pork at the retail outlet to go down," Kelsey explained. "That's going to be a very competitive disadvantage for us in the beef industry."

The Chinese tariffs are set to take effect July 6, but Kelsey says the uncertainty around trade is already making it difficult for cattlemen to compete with pork and poultry operations.

"For cattlemen, it takes about three years to get a product to market as compared to our friends in the protein market," Kelsey said. "Pork is less than a year. Poultry is a couple of months."

Without the ability to easily ramp up or slow down production, Kelsey says trade tussles are making cattle operations more difficult than usual.

HOGS: (National Hog Farmer) -- As often happens in June, hog prices are rising fast. Cash hog prices on last Friday's morning report averaged $82.35 per hundredweight, $6.01 above the week before, $13.11 above the first of June, and $18.91 higher than a month earlier.

The futures market anticipates steady to possibly higher hog prices over the next several weeks. When the June lean hog futures contract expired on Thursday, the July hog futures contract was trading $0.45 per hundredweight higher than the June contract. That day the August contract was $2.57 per hundredweight under June. Hog prices often peak in late-June or early July.

Declining hog slaughter is the primary reason for the higher prices. Hog slaughter last week was only 2.215 million head, down 2.5% from the week before, down 5.3% from a month ago and the smallest hog slaughter for a non-holiday week since the week ending July 22 of last year. Last Saturday's slaughter was only 21,000 head, the smallest Saturday number since June 24, 2017. Hog slaughter is likely to remain light for three more weeks then begin a long seasonal uptrend following the week of July 4.

Heavy slaughter weights are offsetting some of the decline in hog slaughter. Last week hog slaughter was up 1.7% year-over-year, but because of heavier slaughter weights, USDA's estimated pork production was up 3.8%. Hot weather will keep market weights down in coming weeks. The lightest dressed weights of the year typically come in August.

As also is common for June, hog prices are rising much faster than is the pork cutout value. On Friday morning, the average hog carcass price equaled 98.5% of the pork cutout value. A month earlier hog prices were 86.6% of pork cutout and two months ago hog prices were 73.6% of the pork cutout value.

The June quarterly Hogs and Pigs report will be released June 28. Large revisions to past inventory reports are not likely. March-May hog slaughter was up 3.4% which is exactly what USDA's March inventory survey predicted. The March report implied June-to-August market hog slaughter will be up 3.14% year-over-year. During the first two full weeks in June, hog slaughter was up 2.4% compared to the same period last year. This recent shortfall in marketings could be temporary. Heavy slaughter weights may indicate producers have been holding hogs in anticipation of higher prices ahead.

I [Dr. Ron Plain] expect the June Hogs and Pigs report to show slowing herd growth. Historically, breeding decisions have responded to profitability in the last four to six months. Hog prices have been unprofitable seven of the last nine weeks. Iowa State University profit calculations put May net returns at minus $0.80 per hog marketed during the month. This was the third consecutive month of red ink.

According to calculations by Lee Schulz, economist at Iowa State University, the cost of production for hogs marketed in May was $46.84 per hundredweight (live) or $62.46 per hundredweight (carcass). This was the highest monthly cost in the Iowa series since August 2015.

The June 11 weekly crop progress report says 77% of corn acres were in good or excellent condition. That is 10 points higher than the same week last year, and last year's harvest produced a record 176.6 bushels per acre. Midwest weather conditions in the next six weeks will go a long way toward determining corn prices for the coming year.

The U.S. economy continues to post impressive numbers. The unemployment rate was 3.8% in May, the lowest for any month since 3.8% in April 2000, which was the lowest month since 3.5% in December 1969. The low unemployment rate appears to be pushing up the inflation rate. The consumer price index for May was up 2.8%, year-over-year. This was the biggest increase since February 2012. Excluding food and energy, the cost of living in May was up 2.2% year-over-year, the biggest increase since January 2012. Strong economic growth is usually good for meat demand.

The average grocery store price for pork during May was $3.741 per pound, down 1.1 cents from the month before. Despite lower retail pork prices than in April, tighter margins for middlemen allowed the May average live price for 51-52% lean hogs to be up $6.98 per hundredweight to $46.86 per hundredweight. Packer margins were down 2.4 cents per pound in May and the wholesale-retail price spread was down 10.9 cents per retail pound compared to April 2018.


April pork exports totaled a record 547.9 million pounds, up 18.4% from the year before. The increase was due mostly to large increases in shipments to Mexico, South Korea, Colombia and China. Exports equaled 25.6% of U.S. pork production, the highest share for any month since May 2009. Pork exports have been above the year-earlier level for 23 of last 24 months.

Friday, June 22, 2018

Friday Closing Livestock Market Summary - Lean Hog Futures Close Mixed Thanks to Late-Week Profit-Taking

GENERAL COMMENTS
The cash cattle trade was lower in most areas, pressured by seasonally larger ready numbers and lackluster beef demand. Live business in the South ranged from $109 to $110, generally $2 to $3 lower than last week. Most dressed deals in the North were marked at mostly $172, generally $5 lower than last week's weighted average basis Nebraska. The National hog base closed off $1.61 compared with the Prior Day settlement ($73 to $81.49, weighted average $79.97). From Friday to Friday, livestock futures scored the following changes: Jun LC off $0.18; Aug LC up $1.13; Aug FC up $1.23; Sep FC up $1.55; Jul LH off $1.90; Aug LH off $2.88. Corn futures closed fractionally mixed in lackluster trade volume. The stock market closed mixed with the Dow up 119 and the Nasdaq off 20.

LIVE CATTLE
Futures closed mostly higher, up 57 to off 37. Nearby contracts tried moving higher in the early going, hopeful that decent packer buying interest in the country might produce near-steady sales. But spot June and August started to fade once it became obvious that cattle buyers would stick with lower bids. The June 1 on-feed report turned out to be somewhat negative thanks to larger-than-expected placement activity: June 1 on feed 104%; placed in May 100%; marketed in May 105%. Beef cutouts: steady to firm (choice, $217.16 off $0.25, select $202.02 up $0.41) on light to moderate demand and light offerings (27 loads of choice cuts, 21 loads of select cuts, 11 loads of trimmings, 33 loads of coarse grinds).

MONDAY'S CASH CATTLE CALL:
Steady to $2 lower. Monday will be typically limited to the distribution of new showlists. We expect ready numbers to be steady to larger.

FEEDER CATTLE:
Futures closed moderately higher, up 20-72. Late-week feeder buying was supported by short-covering and promises of plentiful feed ahead. Spot August put in a solid week, closing above 62% retracement of the first-quarter price drop. CME cash feeder index: 06/21: $142.57, up $0.36.

LEAN HOGS:
Futures closed mixed, off 65 to up 17. July through October generally lost ground to deferred contracts. Such weakness was probably caused by bull-spreaders taking profits. Furthermore, margin-stressed pork processors worked hard this week to improve profit potential, leaning into the cash market and pushing the pork cutout higher. Pork cutout: $85.64 (FOB Plant) up $0.60. CME cash lean 06/20: $85.79, up $0.65 (DTN Projected lean index for 06/21: $86.17, up $0.38.

MONDAY'S CASH HOG CALL:

Steady to $1 lower. Hog buyers are expected to resume work on Monday with lower bids. Packers did a decent job of improving margins this week, but it remains to be seen how long they can live with slower chain speed and smaller pork production.

Friday Morning Livestock Market Update - Livestock Futures Staged for Mixed Price Action on Opening

GENERAL COMMENTS:

Welcome to another Friday showdown in the cash cattle market. We're surpised that buyers and sellers have found the ability to hld their breath so long followng last week's limited country movement. But it's not the first time in this age of large captive supplies chain speed funding is tough to track. At any rate, something will need to happen today in terms of comprise necessary to generate at least moderate trade voume. Opening bids should start out around $108-110 live and $173-175 dressed. Asking prices in the early rounds should remain firm at $115 live and $183-plus in the North. The June 1 on feed report will be released ths afternoon at 2:00 (CDT). Average. guesses look like this: on feed, up 3-4 percent; placed in May, off 4 percent; marketed in May, up 5 percent. Live and feeder contracts should open mixed as traders jockey ahead of cash news and new on feed data.
Look for the cash hog trade to open with bids steady to $1 lower. Processing margins have improved a little this week, yet reman very poor. It sould like pacers have short term kill needs pretty well covered at this point, especially given almost zero head scheduled for Saturday. Lean futures should open this morning on a mixed basis thanks to bull spreading and late week profit taking.

BULL SIDE BEAR SIDE
1) Although the cash cattle market remained untested on Thursday, a few Northern bids seemed to improve late in the day with some reports like "would you take $110 live if I could get it?" 1) Net beef export sales last week totaled 16,700 MT, down 25 percent from the previous week and 15 percent from the prior four-week average.
2) Actual beef exports last week totaled 18,600 MT, another marketing-year high (slightly higher than the previous week) and up 11 percent from the prior four-week average. 2) Even if the June 1 on feed report set for release this afternoon confirms a 4 percent drop in May placement activity (i.e., the average trade guess), such an in-movent would still be historical large, roughly 9 percent larger than the five-year average.
3) The seasonal tendency is for cash hog prices to strengthen over the next several of weeks. 3) Net pork export sales last week totaled 9,600 MT, down 35 percent from the previous week and 42 percent from the prior four-week average. At the same time, actual exports totaled 19,500 MT, down 13 percent from the previous week and 11 percent from the prior four-week average.
4) This week's hog slaughter is expected to come in lower than last week and higher than 2017 by less than 2 percent. Harvest levels still are likely to head lower the next two or three weeks, on an absolute basis. 4) China implemented a 25 percent duty on most U.S. pork items on April 2. Last week levied a second round of tariffs to be imposed on July 6. U.S. pork now faces cumulative import duties of 71 percent, not including value added tax, according to a formula published on the website of China's finance ministry.


OTHER MARKET SENSITIVE NEWS:

CATTLE: (North American Meat Institute) — The North American Meat Institute issued the following statement from its President and CEO Barry Carpenter regarding the expanded list of eligible exports of U.S. beef to China:

The North American Meat Institute (Meat Institute) applauds USDA's diligent efforts to secure approval for an additional 20 U.S. facilities that are now eligible to export beef to China. This positive development reflects USDA's continuous work to increase U.S. beef market access to China one year after U.S. beef exports to the country resumed. Beef exports to China/Hong Kong have increased 23 percent in volume and 51 percent in value since last year, with good potential for further growth in 2018. The approval of these additional 20 U.S. facilities serves to bolster this momentum, and the Meat Institute looks forward to working closely with USDA and our members to ensure more U.S. beef suppliers become eligible to export their high-quality products to China.

Unfortunately, because of escalating trade friction with China, U.S. beef suppliers may not be able to reach their true export potential in the Chinese market. To avoid the adverse consequences that come from such disagreements, the Meat Institute urges China and the U.S. to work diligently to resolve any differences and to do so as soon as possible.

HOGS: (The Guardian) -- Scientists have genetically engineered pigs to be immune to one of the world's most costly animal diseases, in an advance that could propel gene-editing technology into commercial farms within five years.

The trial, led by the University of Edinburgh's Roslin Institute, showed that the pigs were completely immune to porcine reproductive and respiratory syndrome (PRRS), a disease that is endemic across the globe and costs the European pig industry nearly £1.5bn in pig deaths and decreased productivity each year.

Pigs infected with PRRS are safe to eat but the virus causes the animals breathing problems, causes deaths in piglets and can cause pregnant sows to lose their litter. There is no effective cure or vaccine, and despite extensive biosecurity measures about 30% of pigs in England are thought to be infected at any given time.

After deleting a small section of DNA that leaves pigs vulnerable to the disease, the animals showed no symptoms or trace of infection when intentionally exposed to the virus and when housed for an extended period with infected siblings.

"It is what we call complete immunity," said Christine Tait-Burkard of the Roslin Institute and first author of the work, published in the Journal of Virology.

The advance could have huge animal welfare and economic benefits to farming, she said, but added it is "likely to be several years before we're eating bacon sandwiches from PRRS-resistant pigs".
Genetically modified animals are banned from the food chain in the UK and throughout Europe but it is not clear whether these regulations would apply to gene-edited animals, since the technology and resultant genetic changes are different. It also remains to be seen whether the public will embrace the prospect of genetically edited meat.

Gene editing differs from older genetic modification techniques, which often involve transferring genes from one species to another. By contrast, gene editing uses precise molecular tools to remove small stretches of DNA or alter single letters in the genetic code -- effectively speeding up processes that could occur naturally over many generations.


The PRRS-resistant pigs were made by removing about 450 letters of DNA, causing a receptor, called CD163, that sits on the outside of pig cells to be made lacking one tiny, precise segment that the virus binds to. This means the virus bounces off the cell rather than entering it and multiplying.

Thursday, June 21, 2018

Thursday Midday Livestock Market Summary - Weakness Continues in Hog Complex

GENERAL COMMENTS: 

Light to moderate losses are seen in most livestock trade Thursday. Live cattle futures are showing the most stability with losses seen from 20 to 50 cents per cwt through most of the morning. Hog futures continue to lead the market lower with traders focusing on the lack of buyer support willing to move back into the market following the sharp $5 per cwt market slide over the last week. Corn prices are higher in light trade Tuesday. July corn futures are 2 cents higher. Stock markets are lower in light trade. The Dow Jones is 163 points lower while Nasdaq is down 40 points.

LIVE CATTLE:
Narrow losses are holding in all cattle futures with prices seen 22 to 46 cents per cwt lower at midday due to very limited trade activity and limited direction in the market. Traders continue to look for an indication in cash market activity, which could add some increased volume to the market. But this may not move price levels, or spark any additional trade volume to move through the already quiet market structure. There is likely to be some increased movement through the end of the week, but given the recent support in the complex, prices may not move significantly through the remainder of June. Cash bids have returned to the market with no significant change over the last couple of days. Bids are seen at $108 live basis and $172 to $178 dressed. This is not likely to spark active trade at this point with the stability in futures and willingness of feeders to wait until the end of the week. Asking prices are holding at $115 live and $183 dressed. Boxed Beef cut-outs at midday are mixed, $0.37 higher (select) and down $0.89 per cwt (choice) with light movement of 53 total loads reported (27 loads of choice cuts, 15 loads of select cuts, 3 loads of trimmings, 8 loads of ground beef).

FEEDER CATTLE:
Light market erosion is seen through feeder cattle trade through the morning Thursday. Traders are showing increased market apathy with front month August futures slipping $1 per cwt at midday. This overall lack of support in the complex has little to do with wide spread market shifts or changing market direction. The inability for strong commercial support to move back into the market over the last couple hours and hesitancy to move prices above the $150 per cwt threshold is creating some moderate selling activity. Trade volume through the entire complex remains extremely light, which may add uncertainty to the entire complex over the rest of the Thursday session as well as the remainder of the week.

LEAN HOGS:
Firm pressure has been seen in most hog futures with October through April contracts holding losses near $1 per cwt at midday as the concern of demand erosion through the next six to nine months has added even more market pressure. Nearby contracts have posted a $5 per cwt loss through the week with contracts testing May lows and could continue to show additional market pressure through the rest of the month. Although August futures has not broken through initial support of $74.25 per cwt set mid-May, the lack of buyer support and general weakness in the complex may add even more softness to the complex. Cash prices are lower on the National Direct morning cash hog report. The weighted average price is down $0.47 at $82.08 per cwt with the range from $75.00 to $82.50 on 3,712 head reported sold. Cash prices are lower on the Iowa/Minnesota Direct morning cash hog report. The weighted average price is down $0.43 at $82.23 per cwt with the range from $80.75 to $82.50 on 1,197 head reported sold. The National Pork Plant Report posted 121 loads selling with carcass values falling $0.18 per cwt. Lean hog index for 6/19 is at $85.14 up 1.09 with a projected two-day index of $85.79, up 0.65.

Thursday Morning Livestock Market Update - Look for Meat Futures to Open Thursday With Uneven Price Action

GENERAL COMMENTS:

Cattle buyers should quickly restate the bids posted Wednesday (i.e., $108 live in the South, and $173 to $175 dressed in the North), and then sit back and watch the board for at least an hour or two. They'll no doubt be hoping that significant board weakness will help their cause. Yet if futures don't cooperate that way, or even manage to move higher, packers may soon be forced to start hiking bids toward country asking prices of $115 live and $183 dressed. An extension of the impasse could certainly be pushed into Friday, but we're guessing that short-bought buyers need to make something happen sooner rather than later. Live and feeder futures are likely to open on a mixed basis as traders position before the development of cash news.
Look for the cash hog market Thursday with near steady bids. Chain speed has been slower this week, partially because of tightening numbers off finishing floors and partially because of poor processing numbers. Saturday's kill is not likely to be much over 2,000 head. The weekly total should be around 2.2 million head. Lean futures should also begin with uneven price action in light trade volume.

BULL SIDE BEAR SIDE
1)
Between their short bought status (i.e., linked to last week's limited buy of live inventory) and still relatively attractive processing margins, cattle buyers are starting to run out of time in terms of securing short-term slaughter. This reality should lend feedlot managers greater late-week leverage.
1)
For the third consecutive session, beef cutouts tripped significantly lower on Wednesday with box supplies described as "heavy."
2)
While the gains scored by cattle futures at midweek were relatively modest, the board seems to be improving its technical progress. The close in spot June was a bit above the 100-day moving average. August momentarily spiked above its 100-day moving average for the first time since early March, closing slightly below that technically important threshold.
2)
For the week ending June 16, U.S. hatcheries set 231 million eggs in incubators, up 3% from a year ago. At the same time, broiler growers placed 188 million chicks; up 2% from 2017.
3)
Poorly-margined pork processors have been trading hard this week to slow the cash hog train down. Success in this regard for a handful of days is one thing, but it could be more like mission impossible over the next 30 to 45 days given the perseverance of tight country supplies and keen competition between packers trying to cover as much overhead as possible.
3)
Traders of late summer and fall lean hog futures are becoming increasingly nervous about the ability of demand to handle third quarter and beyond supplies. August and October tumbled significantly below 40 cent moving averages on Wednesday.
4)
For the week ending June 16, Iowa barrows and gilts averaged 278.5 pounds, .2 pounds below the prior week (though still a pound heavier than last year).
4)
If the EU and Canada moves to sell more product to Mexico as they react to tariff realities, the U.S. share of the Mexico could drop significantly (see article below).


OTHER MARKET SENSITIVE NEWS:

CATTLE: (Wyoming Tribune Eagle) -- Wyoming startup company BeefChain is at the intersection of traditional cattle ranching and the state's economic diversification efforts.

The company is using blockchain technology -- a buzzword during this year's legislative session -- to give producers and consumers the opportunity to track beef products farm to table.

The company, started five months ago, has already tagged roughly 1,500 cattle on five ranches throughout the state using radio frequency ID tags that are now linked to a digital supply-chain ledger.

Founders believe this pilot program could be the beginning of more international trade opportunities for ranchers, and may put Wyoming on the front lines of "ethical agriculture." The end goal is to highlight living conditions of livestock, ultimately producing higher-quality meat to sell in foreign markets.

Co-founder Rob Jennings, CEO of Wyoming Certified Beef LLC, said, at the very least, the endeavor will get people talking about Wyoming beef.

"We currently have millions of dollars in agricultural assets tagged in Wyoming," Jennings said. "We are taking a new, modern technology and using it not to change what the Wyoming rancher does, but to demonstrate what the Wyoming rancher does. We can show the data points -- where cattle are fed, where they graze, how they are handled and how they are vaccinated. Blockchain becomes not just a practical tool for increasing sales, but for telling a story of the Wyoming rancher."

The company is incorporated in Cheyenne, but ranchers throughout the state are taking notice.
Wyoming Sen. Ogden Driskill, R-Devils Tower, who sponsored a number of blockchain bills in the Legislature this year, signed on to BeefChain almost immediately, tagging 323 calves from his family-owned Campstool Ranch near Devils Tower in May.

His free-range farming technique, one his family has employed for generations, is pricier than industrial factory farming operations. Although there is a growing market for ethically raised livestock, the challenge lies in guaranteeing the food's source.

This is where the digital ledger comes into play.

Blockchain is often discussed in conjunction with virtual currencies like bitcoin, but the ledger is also known for its tracking and security properties. It uses decentralized databases to verify digital transactions.

Thomas Haynes, who operates a small ranch in central Wyoming, said he heard about the company during discussions with other producers.

"It is something I continue to seriously think about as the industry changes and there is more focus on quality and animal welfare," Haynes said. "I am eager, as I know many are in the industry, to see where this goes."

Last year, 11,400 Wyoming farms generated $1.1 billion in cattle sales, making it the 14th-largest producer in the U.S., despite the state's small population.

Alongside Jennings, co-founder Tony Rose joined former Morgan Stanley managing director and former president of blockchain startup Symbiont, Caitlin Long, to decide what's next.

First, they want to demonstrate the technology's value and see how it can grow in a manageable way. This includes the possibility of changing how ranchers sell beef.

"Producers could essentially tokenize or fractionalize ownership of the herd," Jennings said. "Once you have recorded the cows into your ledger and verified it, you could sell partial ownership to people; there is a way for the rancher to gain a stronger footing in how his or her operations are financed every year."

Jennings said the blockchain beef is expected to be exported to Asia by 2019.

"People are hearing about this, and we have interest from around the globe, but ultimately this is about the Wyoming rancher and making his or her story known," Jennings said.

HOGS: (GlobalMeatNews) -- The US Meat Export Federation (USMEF) has anticipated a sharp drop in US market share if the EU and Canada decide to increase pork supplies to Mexico.

USMEF believes that if the EU and Canada up their supplies to Mexico, then the US market share could decrease from the 90% registered during the first quarter to 75% for the second half of the year.
The decline in market share could result in a decrease in US exports of around 10,000 metric tonnes per month or more than 60,000 metric tonnes for the remainder of 2018.

The predictions came after USMEF issued a report on the current and potential losses to the US pork industry from retaliatory tariffs, with a focus on Mexico.

Mexico imposed a retaliatory 10% tariff on US pork, which will increase to 20% from 5 July, after President Donald Trump introduced tariffs on steel and aluminium imports, sparking a negative reaction among US farmers.

Following the decision made by Mexico, US farmers said the escalating tariffs on pork would "devastate" pork-producing families across the country.


"If unit values hold at Q1 levels, the drop in export value to Mexico would be more than US$100m over six months," USMEF said in the report.