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Friday, November 30, 2018

Friday Closing Livestock Market Summary - Feeder Cattle Futures Closed the Month Lower, Pressured by Long Liquidation and Corn Strength

GENERAL COMMENTS:
Cattle buyers and sellers continue to take their own sweet time deciding on the appropriate value of ready steers and heifers. It's late Friday and there's still a wide gulf between many bids ($112 to $183) and asking prices ($119 to $120 to $187-plus). A few pens in the North have been marked at $116 on a live basis. Furthermore, some Southern bids have improved to $117. At this sluggish rate, a good assessment of country movement may not be available until Monday morning. According to the closing report, the national hog base is $0.50 higher compared with the prior day settlement ($45.00 to $50.74, weighted average $50.03). Nearby corn closed up 4 1/2 cents, partially supported on the final day of November by news that only two delivery intentions were announced for December, a hopeful sign that the market is not eager to let go of corn at these prices. From Friday to Friday, livestock futures scored the following changes: Dec LC, off $0.18; Feb LC, off $0.42; Jan FC, off $4.15; Mar FC, off $3.07; Dec LH, off $1.20; Feb LH, off $0.27. Cheered by potential U.S./China trade talk, the stock market closed the month with another bullish punch: the Dow settled 199 points higher and the Nasdaq finished 57 in the green.

LIVE CATTLE:
Prices here settled mixed, up $0.32 to off $0.17, with nearbys outperforming some deferreds. Most live issues traded lower through midday before recovering some of those losses in the final minutes of the session, with some possibly sensing that short-bought packers would eventually have to reach deeper in their wallets. Beef cut-outs closed mixed with the choice unchanged ($212.61) and select off $0.12 ($198.41). Box demand was called moderate demand and offering.

MONDAY'S CASH CATTLE CALL:
Steady. Early biz on Monday will be limited to the distribution of new showlists. The initial December offering could be some larger depending on how late, late business this week shapes up to be.

FEEDER CATTLE:
Feeder contracts finished the month off $0.70 to $0.82, The front-end seemed to attract bear spreaders with January through April attracting most of the selling pressure. The impressive rally in the corn market was clearly a negative factor. CME cash feeder Index for 11/29: $147.13, down $0.34.

LEAN HOGS:
Lean hog issues closed the week and month with mixed prices, up $0.45 to off $0.85. Consistent trends were difficult to identify. Spot December seemed particularly pressured by the discount of the cash index. Carcass values advanced moderately higher, boosted by bellies, picnics and ham. The cut-out totaled $69.12, up $0.68. (DTN Projected lean index for CME cash lean index for 11/29: $56.42, off $0.14) CME cash lean index for 11/28: $56.56, off $0.28.

MONDAY'S CASH HOG CALL:

Steady/firm. Look for pork processors to resume the collection of market hogs on Monday with steady/firm bids.


#ccc

Friday Midday Livestock Market Summary - Gains Trickle Into Live Cattle Trade

General Comments

Firm gains have held through live cattle and lean hog trade at midday with increased buyer support moving into the market at the end of the month. Increased overall support may continue to develop, although trade volume is expected to remain light. Corn markets are higher in light trade. December corn futures are 5 cents higher. Stock markets are lower in light trade. The Dow Jones is 53 points lower while Nasdaq is down 7 points.

LIVE CATTLE:
Firm gains have held in live cattle trade despite the continued pullback in the feeder cattle complex. This move is helping to bring the focus of most traders back to the ability to firm beef values at the end of the week. Nearby contracts are holding 40 to 60 cent gains as traders continue to focus on underlying demand support through the next couple of months which is not focused on in the feeder cattle complex due to the longer term scope of the market. Cash cattle trade has yet to develop at midday Friday, although bids have increased significantly through the morning. Bids are seen at $112 live basis, and $180 to $183 dressed with most bids seen at the high end of this range. There is still an enormous gap between bids and asking prices with current asking prices easing some, but still at $119 to $120 per cwt live and $187 and higher dressed. Over the next several hours, it is likely that these prices will merge with at least some business expected to need to get accomplished by the end of the day. Boxed Beef cut-outs at midday are higher, $0.11 higher (select) and up $0.18 per cwt (choice) with light movement of 68 total loads reported (33 loads of choice cuts, 9 loads of select cuts, 7 loads of trimmings, 19 loads of ground beef).

FEEDER CATTLE:
Firm market pressure continues to be seen through feeder cattle trade. The spark higher in corn markets through the morning is one of the biggest factors in renewed market pressure developing in all feeder cattle futures. Even though trade volume remains sluggish, the two-day market pressure in nearby contracts has created additional longer-term concern that markets may be unable to hold recent market support and could focus on additional losses during early December.

LEAN HOGS:
Light activity is seen through lean hog trade with traders reversing early market pressure seen through the first half of the morning with narrow gains that are seen at midday. Trade volume remains sluggish at this point with traders holding on to 10 to 20 cent per cwt gains in most contracts and seemingly more focused on holding the current pattern through the end of the month than any other factor. Given the support seen Thursday, and hopes that positive moves develop over the weekend surrounding the G20 Summit, the focus on long term demand growth has once again kept traders optimistic. Cash prices are higher on the National Direct morning cash hog report. The weighted average price is $0.91 higher at $50.44 per cwt with the range from $48.00 to $50.74 on 2,510 head reported sold. Cash prices are lower on the Iowa/Minnesota Direct morning cash hog report. The weighted average price is $0.58 lower at $49.26 per cwt with the range from $48.00 to $50.00 on 515 head reported sold. Pork carcass values fell $0.28 per cwt at $68.16 per cwt on 183 loads. Lean hog index for 11/28 is $56.56, down 0.28, with a projected two-day index is $56.42, down 0.14.


#completecalfcare

Cattle on Feed Report Summary

OMAHA (DTN) -- Cattle and calves on feed for the slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 11.7 million head on Nov. 1, 2018. The inventory was 3% above Nov. 1, 2017, USDA reported Wednesday.

Placements in feedlots during October totaled 2.25 million head, 6% below 2017. Net placements were 2.18 million head. During October, placements of cattle and calves weighing less than 600 pounds were 640,000 head, 600-699 pounds were 525,000 head, 700-799 pounds were 450,000 head, 800-899 pounds were 363,000 head, 900-999 pounds were 180,000 head, and 1,000 pounds and greater were 90,000 head.

Marketings of fed cattle during October totaled 1.89 million head, 5% above 2017.

Other disappearance totaled 69,000 head during October, 5% below 2017.


"The Cattle on Feed report remained neutral to slightly bullish with overall cattle on feed coming well within estimated market ranges," said DTN Analyst Rick Kment. "Cattle placements through the month of October are positive with overall placements at the low end of the range and well below estimated levels. Marketing levels beat expectations by 1%, once again focusing on firm to strong overall beef demand."


Friday Morning Livestock Market Update - Cattle Futures Staged for Mixed Opening as Traders Wait for Late-Week Cash Verdict

GENERAL COMMENTS:

The cash cattle trade will develop sometime Friday between late morning and late afternoon. Look for opening bids around $180 to $183 on a dressed basis in the North and $115 to $117 on a live basis in the South. Asking prices are likely to be renewed in the neighborhood of $187 plus in the North and $120 plus in the South. Live and feeder futures seem set to open with uneven price action with nearbys probably holding up better than their deferred counterparts.
Hog country should open Friday with steady/firm bids. Given the aggressive chain speed this week (including plans for a Saturday kill as large as 207,000), the weekly slaughter total will no doubt have little trouble chinning 2.6 million head. Lean futures seem geared to open higher, supported by follow-through buying and ongoing African swine fever worries. 


BULL SIDE
BEAR SIDE
1)
For the week ended Nov. 17, steer carcass weights dropped to 900 pounds, 4 lbs lighter than †he prior week. Scale tickets seem close to inking a seasonal top.
1)
December live cattle tends to decline in early December and then rally in mid-December, before dropping lower into the end of the year. Most live issues remain well below their early October highs. February will run into overhead resistance in the $122 to $123 area, and then again toward the contract highs near $124.
2)
The continuing spread of African swine fever through China's pig population has the potential to reshape global beef markets. Given China is already an important and growing importer of beef, depending on how pork production and prices develop, there could be increased demand from China for beef imports over the coming months.
2)
Most of live cattle contracts continue to hover near their respective 40-day moving averages and in the lower end of the trading ranges that had been in place from mid-September into late October. While rebounding from mid-November lows, the market is nearing some overhead technical resistance areas.
3)
China may soon buy pork for its state reserves to support farmers struggling to sell their pigs amid an African swine fever epidemic that has ravaged the nation's hog herd, according to people who attended a government meeting this week.
3)
The forward lean hog futures curve is providing a bleak outlook for a positive margin hedging situation for the remainder of the fall, and even start of 2019. Cash hog markets have been below breakevens for longer than expected and the futures markets have attempted to find a premium-to-cash forecast but continually fail to maintain any bullish sentiment.
4)
Pork export sales last week were large to Mexico and Japan, as well as China. Indeed, China was the third largest buyer of U.S. pork last week. This tends to confirm that the (African swine fever) situation in China is far worse than what has been reported.
4)
Although the possibility of "good" news coming out of the G-20 summit regarding trade discussions between the U.S. and China has sparked some optimism in lean hog futures, the track record of trade negotiations over the last year has been anything but positive and constructive.
 
OTHER MARKET SENSITIVE NEWS

CATTLE: (The New Daily) -- In the relentless contest of "world's biggest animals", a 194cm-tall [6.36 feet] Aussie bovine has dramatically raised the steaks.

Residing on a property at Myalup, Western Australia, the seven-year-old Holstein Friesian steer is more than twice the size of the other cows in his herd.

He was first discovered by news outlets in October, but the beast's udderly ridiculous stature only began to go viral earlier this week when the story caught international attention.

Since then, dozens of sources have been looking for inventive ways to fit the discovery into their regular coverage -- some attempts more successful than udders. Every major news outlet around the globe seems to have become enamoured with the steer and have been mooved teport on it, from the Daily Mirror to New York Magazine.

No bull, owner Geoff Pearson told Perth Now that Knickers' impressive stature should save him from becoming mince meat -- as he is simply too big for the local abattoir.

"It was too heavy. I wouldn't be able to put it through a processing facility," he told Perth Now.
"So I think it will just live happily ever after."

Naturally, cow fans on social media began milking Knickers for all he was worth.
HOGS: (Oklahoma Farm Report) -- NPPC Chief Vet Liz Wagstrom Says Threat of Foreign Animal Disease Entering the US is As African Swine Fever becomes increasingly more concerning for the US and global pork industry, with the recent outbreak that has nearly fully saturated China's pork infrastructure, Radio Oklahoma Ag Network Associate Farm Director Carson Horn sat down with Dr. Liz Wagstrom, chief veterinarian for the National Pork Producers Council, to talk about the seriousness of the threat this disease poses to the US pork industry.

According to Wagstrom, the first reported outbreak of ASF in China occurred sometime around the first of August and has since spread to nearly every province of the Asian country. She says the disease has slowly worked its way across Europe with cases showing up sporadically over the last decade.

"The concern we have as it's gotten into China, is that we get a lot of ingredients and supplies with a lot of international travel back and forth from China," Wagstrom said. "So, we're working really hard just to try to keep it out of the United States. We've never had it and we really want to keep it that way.

Citing the investigations that veterinarian researchers on the ground in China have conducted, the contagion was probably in the country a couple weeks before it was actually identified. The fact that it went that long without being notified gave the disease ample opportunity to spread rapidly given the extensive movement of livestock there. Wagstrom says the disease has been traced back to its source at a packing facility where patient zero likely exposed thousands of hogs to the disease. She suspects China's common practice of "swill feeding" and its culture of selling off sick animals as soon as they are identified, probably did not help the situation.

"There is a lot of things they're doing over there that could have contributed to its spread," she remarked. "So, we're working very closely with both the USDA and customs and border protection. They're targeting flights coming from ASF positive countries for illegal meat or citrus products as well as manifest cargos. We're also working with USDA to try to make sure that we could identify cases early - that we would have a surveillance program.

"The feed and pork industries are working closely together as well to try to (monitor) feed ingredients coming from China that could potentially be contaminated."

#completecalfcare

Thursday, November 29, 2018

Thursday Closing Livestock Market Summary - Hog Futures Settle Sharply Higher Tied to Late-Year Optimism

GENERAL COMMENTS:
Northern cattle buyers threw out a few more bids Thursday (e.g., $180 to $183 dressed; $115 live), but nothing fancy enough to spark real selling interest. Cash potential in the South proved even deader. According to the closing report, the national hog base is .36 lower compared with the prior day settlement ($45.00-51.00, weighted average $49.49). The corn market closed essentially unchanged, though some buyers claimed token support linked to firm export sales. The stock market closed lower with the Dow off 27 points and the Nasdaq off 18.
LIVE CATTLE:
Live traders seem impatient waiting for greater packer spending to develop. At any rate, contracts fell generally lower, off 17 to 130. The summer of 2019 seemed to catch the most selling heat, reacting to the tune of triple-digit losses. Just under 117, spot December closed close to unchanged with last week's feedlot trade in the South. Yet bullish asking prices strongly suggest the late-year board remains too cheap. Beef cut-outs closed mixed with the choice off .67 ($212.61) and select up .03 ($198.53). Box demand was called light to moderate demand and offering.
FRIDAY'S CASH CATTLE CALL:
Steady-$2 higher. It will be do-or-die time Friday as buyers and sellers work the last corner of November in order to generate at least moderate trade volume. Asking prices should be restated around $187 in the North and $120 in the South.
FEEDER CATTLE:
Feeder contracts were powered lower by triple-digit losses. Sinking deferred live futures were obviously negative in that regard. In digging bigger discounts, traders seem convinced the cash index is likely to slide lower over the next quarter or so. CME cash feeder Index for 11/28: 147.91, off .26.
LEAN HOGS:
For the most part, lean hog futures settled 77 to 285 higher. Hog buyers reacted positively to large weekly export sales to Mexico and Japan, as well as China (the latter reinforcing ASF fears). More specifically, China was the third largest buyer of U.S. pork last week. Carcass value closed moderately higher, supported by better demand for all primals except the belly and the butt. The cut-out totaled $68.44, up .70. (DTN Projected lean index for CME cash lean index for 11/27: 56.84, off .33) CME cash lean index for 11/28: 56.56, off .27.
FRIDAY'S CASH HOG CALL:
Steady/firm. Hog buyers are expected to complete procurement chores on Friday by opening with steady/firm bids. 


#completecalfcare

Thursday Midday Livestock Market Summary - Active Gains Flood Into Hog Futures

General Comments
Strong gains seen in the lean hog complex has sparked triple digit buyer activity through all nearby contracts. This move in the hog market has pulled increased interest from the cattle trade which is posting strong market losses Thursday. Corn markets are higher in light trade. December corn futures are 1/2 cent higher. Stock markets are lower in light trade. The Dow Jones is 50 points lower while Nasdaq is down 13 points.
LIVE CATTLE:
Strong losses have developed through the live cattle complex at midday following the triple-digit pressure seen in feeder cattle. There is very little new market direction seen in the complex as traders are now focusing on renewed strong market surges seen in lean hog trade. The concern of additional market demand through early 2019 has now offset any supply reduction activity following the last cattle on feed report, as traders remain uncertain about the ability to move additional beef supplies at higher prices due to economic uncertainty. Cash cattle activity is still undeveloped with bids still quiet through the morning. The pullback in futures trade has added some uncertainty from the packer side as they are hesitant to restate bids seen earlier in the week. Asking prices remain firm at $119 to $120 per cwt live and $187 and higher dressed, which may not change until sometime Friday if packers do not show interest. A Friday trade is likely at this point unless something major develops in futures trade. Boxed Beef cut-outs at midday are lower, $0.19 lower (select) and down $0.64 per cwt (choice) with light movement of 81 total loads reported (50 loads of choice cuts, 12 loads of select cuts, no loads of trimmings, 19 loads of ground beef).
FEEDER CATTLE:
Strong pressure has developed through the morning in feeder cattle trade with front-month January futures holding a $2 per cwt loss. The overall lack of support in the complex comes while aggressive buyer support is moving into the hog complex and leaving most cattle trade generally sluggish. Even with the sharp losses, prices are still well above short-term lows seen during early November, as prices continue to hover in the bottom half of the extremely wide sideways market trend seen through the fall months. Concerns surrounding long-term beef demand and overall economic market direction has eroded both commercial and investment activity in cattle trade through the week.
LEAN HOGS:
Aggressive buyer support is quickly moving into the lean hog futures complex through the morning with February futures leading the complex higher as gains of $2 per cwt have held through the morning. February futures are trading $2.15 per cwt higher with traders moving into the end of the month with expectations and hopes of positive trade news seen following the G20 Summit and discussions between the U.S. and China. Any good news that comes out of these meetings seems to be enough to bring buyers back to the hog market at this point. Even though prices are holding triple digit gains in most contracts, the inability to keep volume active through the morning may limit further support. Cash prices are higher on the National Direct morning cash hog report. The weighted average price is $0.34 higher at $50.19 per cwt with the range from $48.00 to $50.74 on 3,145 head reported sold. Cash prices are unreported due to confidentiality on the Iowa/Minnesota Direct morning cash hog report. Pork carcass values added $0.55 per cwt at $68.29 per cwt on 177 loads. Lean hog index for 11/27 is $56.84, down 0.33, with a projected two-day index is unavailable at this time.


#completeherdhealth

Economist: Financial conditions moderate for cow/calf producers

Producers seeking to improve cost structure will need to pay close attention to feed and pasture.

While corn and soybeans received much of the spotlight during the farm economy boom, cow/calf producers also experienced record returns during that period. Since then, however, cow/calf producers have faced declining revenues and slow-to-adjust production expenses, according to agricultural economist David Widmar.
While benefiting from strong cattle prices, Widmar pointed out that the contribution margin — the difference between total revenues and variable costs of production — in 2014 reached an eye-popping $575 per cow. This was well above any other year observed and equal to the sum total of previous eight years.
Widmar added, “2014 was a phenomenal year, to say the least.”
From there, returns fell to $53 per head in 2015, and conditions worsened in 2016 as the contribution margin turned negative to a loss of $5 per head.
“Only two other years, 2008 and 2009, have reported negative contribution margins. When contribution margins are negative, none of the fixed costs are covered, and there are no profits generated,” Widmar explained.
The tide turned in 2017, when conditions improved as contribution margins reached $84 per head. However, Widmar said the average annual contribution margin since 2001 has been $112 per head. “This includes the record-setting 2014. The median observation is $89 per head. This is to say that 50% of the observed data were above $89 per head, and half were less than $89,” he said.
Digging deeper
According to Widmar, revenue per cow in 2014 nearly reached $1,400, well above observations seen prior or since. Leading up to 2014, revenues rapidly exceeded slow-to-adjust variable costs, which Widmar said created historical returns. In 2015, revenues fell as variable costs continued to move higher.
Variable costs in 2016 turned lower, but not fast enough to offset rapidly declining revenues, Widmar explained. This, he said, led to the negative contribution margins. By 2017, revenues turned higher as variable costs continued lower, both positively helping producer financial conditions.
“For context, feed and pasture represent a significant share of variable costs for cow/calf producers," he said. "In 2017, these collectively accounted for 67% of total variable expenses.”
Today, total revenue remains historically strong, Widmar noted.
“Even after significant declines since 2014, total revenue has remained above $600 per head. Before 2009, revenues only occasionally reached $600 per head.  This is similar for total variable costs. Even after turning lower since 2015, variable costs remain above levels observed before 2012.”
Improving cost structure
While cow/calf producers did not miss the farm economy boom, Widmar said revenues since the peak in 2014 have fallen faster than variable costs could adjust. This, he said, led to negative contribution margins in 2016. In 2017, however, conditions improved on continued lower variable costs and higher revenue.
Looking ahead, Widmar said producers seeking ways to improve their cost structure will need to pay close attention to feed and pasture. “In 2017, these two categories accounted for two-thirds of variable costs,” he said.

#completecalfcare

Thursday Morning Livestock Market Summary - Livestock Paper Likely to Open on a Mixed Basis

GENERAL COMMENTS:
The fed cattle trade should take on better definition Thursday. Expect bids to start out around $183 dressed in parts of Nebraska and Iowa, roughly $4 plus below area asking prices. On the other hand, live bids in the South (i.e., $116 to $117) may look promising yet remain well below asking prices of $120 or better. Live and feeder futures should open mixed as traders jockey around the possibilities of late-week cash.
Hog buyers seem set to resume cash procurement Thursday with basically steady bids. Lean futures should open on both sides of unchanged. The pattern of nearbys gaining on 2019 issues as seen all week is expected to persist through the trading session.
BULL SIDEBEAR SIDE
1)
Though the midweek cash cattle trade was barely tested, a few opening bids climbed above spot December live, suggesting that packers were gearing up to pad the cash market by the end of the week.
1)
Beef cutouts closed significantly lower on Wednesday with box movement described as no more robust than light.
2)
Following last week's declining volumes in the holiday-shortened production week, boxed beef volumes should increase over the next two to three weeks, before easing back into the holiday period.
2)
For the week ended Nov. 24, U.S. hatcheries set 228 million eggs in incubators, up 1% from a year ago.
3)
For the week ended Nov. 24, broiler growers in the United States placed 173 million chicks for meat production, down 1% from a year ago.
3)
The pork carcass value sagged moderately lower at midweek, checked primarily by eroding demand for loins and bellies.
4)
Spot December lean hog futures ended Wednesday's session firmer at $57.95, a 110-point premium to the most recent two-day CME settlement index value. The short-term market trend is neutral, and the longer-term trend is bullish. The market structure is bullish with the strong premium built into the February 2019 contracts.
4)
For the week ended Nov. 24, Iowa barrows and gilts averaged 283.9 pounds, .5 lbs. heavier than the prior year and 1.9 lbs. lighter than 2017.
OTHER MARKET SENSITIVE NEWS 
CATTLE: (foodmarket.com) -- The world's largest cattle feedlot is expanding South African beef exports beyond the Middle East to take advantage of surging demand in China and other Asian markets.
Karan Beef's feedlot south of Johannesburg is emblematic of a push by South African agriculture to boost exports of more niche products ranging from grapefruit and avocados to macadamia nuts. Increasingly, the emphasis is on high-value products rather than mass output of less lucrative crops like corn.
With 160 000 cattle on the property, which converted from dairy to beef production in about 1980, and half a million of the animals sent to slaughter every year, the 2 500 ha operation is the biggest feedlot on a single site globally, according to director Matthew Karan.
The cattle are acquired from farmers around the country at about eight months old. They're more than doubled in weight to about 420 kg within four months with feed including molasses and gluten mixed in a production line-like factory that sees specially equipped trucks constantly topping up troughs in the pens. The operation accounts for 70 % of South Africa's beef exports and 30% of the local market.
"This is as good as you would see in Texas," said Karan, one of three sons of founder Ivor, whose own father owned a cupboard-making business in Johannesburg.
The business has been exporting beef to the Middle East since the early 2000s and last year won access to China, doubling export volumes, Karan said in an interview at the feedlot. In the year to November it shipped 4.34-million kilograms of beef to China and 4.68-million kilograms to the Middle East.
The company has had to work hard to promote South African beef, which is generally lean and "rose" in color due to the local grading system, he said. That compares with the more marbled meat from the US and Australia, which contains more fat.
"China is the market that's putting pressure on us, China needs more beef," said Karan. "We have limited the volumes we send them because we don't want to take away from the local market. There is potential for us to scale up exports, but this facility is pretty much at the maximum we could get to."
China's beef imports have jumped this year and are on pace for an annual record. Karan Beef is also looking at Malaysia as a new export market and is due to undergo an audit to ensure it meets the country's halal standards early next year.
The South African beef industry more broadly is under pressure to increase production to meet local and international demand, said Gerhard Schutte, Chief Executive Officer at the Red Meat Producers Organization. One possibility is building capacity of small-scale farmers, who own about 40% of the nation's livestock, but lack the competitiveness required for export markets, he said. In October, the Karan family agreed to sell a 90% stake in the business to the Public Investment Corporation (PIC), Africa's biggest fund manager and the custodian of South African civil servants pensions, and black-owned Pelo Agricultural Ventures for R5.2-billion in one of the biggest attempts yet to address the legacy of apartheid in South African farming. The deal is the PIC's largest to date in the agriculture sector, said head of corporate affairs Deon Botha. The family will continue to manage the business for the foreseeable future, said Karan. An earlier offer of R6-billion for the entire business by Chinese investors who wanted to export all of the output was rejected, he said.
"We have to ensure we leave our legacy properly," Karan said. "Do you really want to be the guy that sold out South Africa?"
HOGS: (meatingplace.com) -- China and Spain will on Wednesday sign an accord on the export of Iberian ham to China, a Spanish government source said on Tuesday, in a deal that will include coveted, on-the-bone legs of pork.
The two countries have been negotiating a protocol on the export of pork products from Spain to China since 2016 and the agreement aims to include a wide range of pork products, according to the Spanish agriculture ministry.
The agreement is part of a series of deals to be signed during the visit of Chinese President Xi Jinping, who arrives in Spain later on Tuesday for a two-day visit as part of a stop off on his trip to a meeting of G20 leaders in Argentina Friday and Saturday.
A broader accord on the Chinese "Belt and Road Initiative" - a wide-ranging development strategy adopted by the Chinese government involving global infrastructure projects - would not be signed, the Spanish government source said.
In a column published in Spanish daily ABC, Xi wrote that the aim of his trip to Europe and Latin America was to discuss how to "strengthen the unity of the international community," which he said was needed "at a time of unprecedented challenges, most of all the growing protectionism and unilateralism."
Xi made no direct reference in the column to U.S. President Donald Trump, who on Monday said he expected to move ahead with raising tariffs on $200 billion in Chinese imports to 25 percent from the current 10 percent.
Spanish ham, dry cured from specially-bred pigs, is considered a delicacy in gourmet circles though is often expensive in the few markets outside of Europe that have reached export accords with Spain.

#chh

Wednesday, November 28, 2018

Wednesday Closing Livestock Market Summary - Midweek Futures Close With Mixed Results

GENERAL COMMENTS:
Although the cash cattle arena was peppered with some preliminary bids (i.e., $180 to $183 in the North) and asking prices (i.e., $119 to $120 in the South; $187-plus in the North), nothing really came together to form meaningful trade volume. According to the closing report, the national hog base is .26 higher compared with the prior fay settlement ($45.00 to $50.74, weighted average $49.59). Supported by bean strength and encouraging talk about the possibility of China and the U.S. mending trade fences, corn futures managed to close 4 cents-plus higher. The stock market exploded higher as Chairman Powell touted interest rate stability. The Dow closed 617 points in the green with the Nasdaq up 208.
LIVE CATTLE:
Live futures closed narrowly mixed with front-end prices ranging from 7 cents higher to 5 cents lower. While bulls didn't seem to get much bang for their buck, a few higher feedlot bids should have been supportive of the discount of spot December. Beef cut-outs closed mixed with the choice off $0.72 ($213.28) and select off $1.74 ($198.50). Box demand was called light demand and moderate offering.
THURSDAY'S CASH CATTLE CALL:
Steady to $2 higher. Packer inquiry could start to gather more steam Thursday, but substantial trade volume could be delayed until Friday.
FEEDER CATTLE:
Feeder issues closed 62 cents to 75 cents lower, checked by long liquidation and midweek profit-taking. Prices were also weighed by the rather surprising rally in the corn market. CME cash feeder Index for 11/27: $147.91, off $0.26.
LEAN HOGS:
Lean prices closed up 7 cents to off 55 cents as 2019 contracts lost more ground to their nearby counterparts. Hog slaughter has been disrupted recently by winter storms across the Midwest, and some analysts expect the backlog to be cleared next week. Carcass value closed moderately lower, pressured by softening. demand for loins and bellies. The cut-out totaled $67.74, off $0.53 (DTN Projected lean index for 11/26: $57.17, off $0.27) CME cash lean index for 11/27: $57.17, off $0.27.
THURSDAY'S CASH HOG CALL:
Steady. Look for Thursday's cash hog trade to start out with steady/firm bids.

#ccc

Wednesday Midday Livestock Market Summary - Live Cattle Futures Hold Narrow Gains

General Comments
Very limited trade is seen across the livestock market with traders focusing on narrow gains in live cattle futures, while the rest of the complex has slowly but steadily given back early support at midday. Corn markets are higher in light trade. December corn futures are 4 cents higher. Stock markets are higher in light trade. The Dow Jones is 422 points higher while Nasdaq is up 116 points.
LIVE CATTLE:
Live cattle futures are holding single-digit gains in most contracts. There is very little additional direction seen across the market despite a late-morning pullback in feeder cattle and hog markets. This could allow for markets to remain well contained in a narrow trading range through not only the end of the session, but the rest of the week. Cash cattle interest is still slow to develop with a few dressed bids starting to pop up through the North. Early bids are seen at $180 to $183 per hundredweight (cwt), while live bids are still unavailable. Asking prices are still elevated, firming at $119 to $120 per cwt live and $187 dressed. Active trade may not be seen until late in the week. Boxed Beef cut-outs at midday are lower, $1.33 lower (select) and down $0.42 per cwt (choice) with light movement of 82 total loads reported (52 loads of choice cuts, 16 loads of select cuts, 5 loads of trimmings, 9 loads of ground beef).
FEEDER CATTLE:
Feeder cattle futures have slipped lower with losses of 30 to 47 cents per cwt as traders remain focused on market pressure through midweek. March futures are leading the losses lower, as traders continue to focus on the lack of increased market direction seen through the week. Prices continue to remain stuck within the wide $16-per-cwt trading range seen over the last two months, although markets remain in the bottom half of this trading range due to concerns of long-term beef movement through early 2019.
LEAN HOGS:
Early gains have faded through the morning with prices 20 to 70 cents per cwt lower at midday. The overall lack of support in the complex February futures are leading the market lower with losses of 70 cents per cwt, although very little additional direction is expected to be seen through the rest of the complex. Following a $5-per-cwt pullback in February futures over the last two weeks, there continues to be concerns of market erosion, even though prices are still hovering in the wide sideways trend seen over the last couple of months. This range is expected to hold through the end of the year, although traders may focus on additional direction based on any news in global pork demand. Cash prices are higher on the National Direct morning cash hog report. The weighted average price is $0.14 higher at $49.47 per cwt with the range from $45 to $50.74 on 7,401 head reported sold. Cash prices are lower on the Iowa/Minnesota Direct morning cash hog report. The weighted average price is $0.41 lower at $48.44 per cwt with the range from $45 to $49.50 on 2,541 head reported sold. The National Pork Plant Report posted 193 loads selling on the morning report. Pork carcass values fell $1.94 per cwt at $66.59 per cwt. Lean hog index for 11/26 is $57.17, down $0.27, with a projected two-day index is unavailable at this time.


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American cattlemen are producing more Prime beef than ever

USDA’s latest steer and heifer grading report shows that carcasses grading Prime accounted for 9.6% of all cattle graded, with another 71% grading Choice. “Thus, in mid-November 2018, over 80% of all cattle in the U.S. were grading Choice or better,” says Len Steiner, Steiner Consulting Group. “That’s a stunning shift from even 10 years ago when fewer than 60% of cattle graded Choice or higher.” As Steiner notes in the Daily Livestock Report published by Steiner Consulting Group, there are a number of factors at work to help explain this shift toward higher quality. “First, there is the long run trend in upgrading cattle genetics, a trend that accelerated after the liquidation that took place in 2011-2012,” Steiner says. “The herd rebuilding that started in 2014 appears to have brought with it much better performing cattle and a sharp increase in the supply of high marbled beef. It is stunning to think that almost 13% of cattle in Nebraska graded prime and another 73% graded choice.” Steiner says the processing industry has also upgraded processes used to grade cattle. “While human graders still are employed, a larger share of grading is now done by computers, with human graders overseeing the process. This has made for more consistent grading but also more cattle grading choice or higher.” The more cattle grading Choice and Prime has also reduce the number of Select carcasses in the slaughter mix. That fact has tended to narrow the spread between Choice and Select, “especially for those product where marbling does not bring any special benefits,” Steiner says. “For some beef processors a higher marbled product may be a disadvantage since it presents lower yields and does not add much to the flavor profile of the final product. The shift to more prime grading cattle has helped bolster cutout values but not as much as one would think.” Steiner says the increase in supply of Prime has been accompanied by a decline in price. “The premium last year averaged $31 per cwt, not far from the $30 per cwt average premium of the last five years. This year, however, the Prime beef cutout has averaged just $14 per cwt higher than the Choice cutout. With more Prime cattle in the mix, packers have had trouble realizing the normal premiums on Prime ribeyes or loins, which are about half of what they were a year ago.”

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Wednesday Morning Livestock Market Summary - Meat Futures Staged for Mixed Opening at Midweek

GENERAL COMMENTS:
While it's possible that the cash fed trade could take on some definition at midweek, our guess is that serious students of the market won't learn much until Thursday or Friday. A few preliminary bids in parts of the North could be seen around $180. Live and feeder futures seem geared to open on a mixed basis in slow volume.
Expect hog buyers to return to work Wednesday with near steady bids. Processing margins remain decent with most plants netting $20 per head or more. So it's no wonder that packers are cranking up chain speed whenever possible. At this time, most believe Saturday's hog kill should total close to 210,000 head. Lean futures should also open with uneven price action with nearbys possibly outperforming deferreds.
BULL SIDEBEAR SIDE
1)
This week's cattle harvest could bounce back up to 640,000 head or higher, and be similar for the first week of December. Weekly slaughter will trail off through December, especially in the two holiday weeks of Christmas and the New Year's holiday.
1)
The levels of late October are providing overhead resistance areas in many of the live cattle contracts, with most hovering in the lower end of the trading ranges that had been in place from mid-September until the end of October.
2)
Cattle carcass weights soon will be peaking and then start to head seasonally lower through the winter and into next spring.
2)
As bulls roll away from delivery potential, December live futures tend to decline in early December and then rally in mid-December, before dropping lower into the end of the year.
3)
Beef cutout values may find some pressure going into December but then regain strength from mid-December into the new year.
3)
The cash hog markets are expected to ease for the next few weeks as overall wholesale pork product values wane and available hog supplies remain at or near record levels.
4)
Holiday clearance appears to have been decent on spirals for Thanksgiving and with Mexico in final preparations to have product in place for the year-end holidays, ham prices are forecast to be firm the next two to two and a half weeks.
4)
Federally inspected barrow and gilt carcass weights for the week-ended Nov. 10 averaged roughly 210 pounds, unchanged from the week prior and the same as the year prior. Hog weights are expected to move seasonally heavier through the end of the year, averaging roughly the same as they were for the same period last year.
OTHER MARKET SENSITIVE NEWS 
CATTLE: (North American Meat Institute) -- The North American Meat Institute (Meat Institute) outlined key meat and poultry industry negotiating objectives and priorities for a bilateral U.S.-Japan Trade Agreement in comments submitted Wednesday to the Office of the U.S. Trade Representative. The Trump Administration, in October, notified Congress of its intention to enter into trade negotiations with Japan, and subsequently requested public input.
"The U.S.-Japan Trade Agreement stands to be a boon for the U.S. meat, poultry and animal products industry and will be integral to future growth," wrote Bill Westman, Meat Institute senior vice president of International Affairs. "The agreement will provide economic benefits to the producers, processors and workers in the industry by making U.S. meat and poultry products more competitive in one of the most important markets in the Pacific region."
The Meat Institute said U.S. beef exports should at least receive the same tariff benefits that have been granted to competitors under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which enters into force on December 30, 2018. Under CPTPP, Japan's tariffs on beef imports will decline from 38.5 to nine percent in year 16 of the agreement.
In addition, trade negotiations should aim to phase out import tariffs on U.S. pork and return the U.S. to a level playing field upon implementation of the agreement. Similar to its position on U.S. beef exports, the Meat Institute urged that U.S. pork exports receive the same tariff benefits granted to competitors under CPTPP and the Japan-European Union Economic Partnership Agreement, or risk ceding significant market share in the U.S. pork industry's top value market.
Furthermore, the Meat Institute encouraged negotiators to increase market access for U.S. meat industry byproducts, including hides, skins and leather products, by reducing, and ultimately eliminating, tariffs on those export products. The Meat Institute also expressed support for inclusion in a bilateral agreement of a strong chapter on sanitary and phytosanitary (SPS) measures to prevent non-scientific and unduly burdensome SPS import regulations from limiting U.S. meat and poultry exports to Japan.
Japan is the largest export market for U.S. beef and largest value market for U.S. pork.
HOGS: (Dow Jones) -- African swine fever continues to have a global impact on pork production, says Rabobank, proving especially harmful in China as prices rise and supplies fall, requiring more imports. "Europe still faces an oversupply of pork, and this will become a particular issue if an ASF outbreak hits production and results in a drop off in export opportunities."
The firm adds that the severity of disease outbreaks are showing no signs of being curbed, especially in pork and poultry. As a result, biosecurity will become a higher business priority for livestock and fish producers in the year ahead, says Rabobank. "Major outbreaks are affecting global trade flows and consumer preferences, and as a result we expect to see a shift to beef and seafood consumption in some markets."


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Tuesday, November 27, 2018

Tuesday Closing Livestock Market Summary - Lean Futures Settle Mixed Thanks to Bull-Spreading and Profit-Taking

GENERAL COMMENTS:
The cash cattle trade existed only in theory Tuesday with bids and asking prices no better than guesswork. Better definition of price potential may not surface until Thursday or Friday. According to the closing report, the national hog base is $0.66 lower compared with the Prior Day settlement ($46-$51.41, weighted average $50.19). Corn futures ended fractionally mixed with slow action restricted to long-held price ranges. Equities closed 108 points higher on the Dow and about unchanged on the Nasdaq.
LIVE CATTLE:
Trading action here was essentially a yawner Tuesday with front-end contracts drifting 5 to 22 cents lower. Beef cut-outs closed mixed with the choice off $0.45 ($214.00) and select up $0.45 ($200.24). Box demand was called light-to-moderate demand and offerings.
WEDNESDAY'S CASH CATTLE CALL:
Steady/firm. We could start to see a few cash clues at midweek, but both buyers and sellers could easily keep their hand pocketed until the tail-end of the week.
FEEDER CATTLE:
Feeder futures closed moderately lower, generally off 15 to 72 cents. 2019 contracts were checked to some extent by the discount status of the cash index. CME cash feeder Index for 11/25: $148.17, up $0.65.
LEAN HOGS:
Either thanks to bull-spreading or the unwinding of bear spreads, lean issues settled on a mixed basis (i.e., up 47 cents to down 50 cents) with nearbys gaining on deferreds. Carcass value held essentially unchanged as stronger fresh cuts essentially offset weakness in processing items. The cut-out totaled $68.27, up $0.05 (DTN Projected lean index for 11/23: $57.44, off $0.40) CME cash lean index for 11/26: $57.17, off $0.27.
WEDNESDAY'S CASH HOG CALL:
Steady. The cash hog trade at midweek is expected to open near steady, assuming a rough supply-and-demand balance.


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Tuesday Midday Livestock Market Summary - Mixed Price Levels Contain Cattle Futures

General Comments
Narrow trading ranges have been seen through the entire livestock complex with cattle markets showing the most consistency as prices have hovered in very narrow ranges through the entire session. Limited interest is expected to be seen over the next couple of hours as markets are likely to remain mixed in narrow to moderate ranges. Corn markets are higher in light trade. December corn futures are 1 cent higher. Stock markets are lower in light trade. The Dow Jones is 77 points lower while Nasdaq is down 22 points.
LIVE CATTLE:
Very limited market movement has been seen through the complex Tuesday morning with prices hovering in a narrow range steady to 20 cents lower. The overall lack of movement in the market over the last couple of days is allowing traders to focus on the potential for fundamental support to move back into the market through the last half of the week. Beef values have been inconsistent, leaving traders unwilling or unable to gain enough momentum to break out of the current narrow trading range over the last couple of days. There is still some underlying support seen in the market based on firm demand for beef through the end of the year. But this is unable to spark any additional commercial buyer activity or interest additional noncommercial traders at this point to move into the complex. Cash cattle activity remains quiet with bids and asking prices still unavailable at this point. It is likely that additional cash market activity will not develop until the second half of the week, although packers may show increased interest through the next couple of days. Boxed Beef cut-outs at midday are mixed, $1.48 higher (select) and down $0.66 per cwt (choice) with light movement of 67 total loads reported (32 loads of choice cuts, 8 loads of select cuts, 6 loads of trimmings, 21 loads of ground beef).
FEEDER CATTLE:
Lack of market direction has swept over the cattle complex through the early part of the week. Feeder cattle futures are mixed in a narrow range with traders unwilling to step aggressively into the live cattle or feeder cattle market at this point. The focus seems to be placed on outside markets, which are also showing very limited interest over the last couple of sessions. Although nearby feeder cattle futures are holding near the top end of short term trading ranges due to the lower cattle placements in October, prices still remain stuck in a long-term sideways trend, and may be unable to break out of this range over the near future.
LEAN HOGS:
Very limited activity has developed Tuesday morning as traders have showed increased market stability at midday following strong additional losses seen early in the session. Triple-digit pressure quickly developed in the opening hours of trade Tuesday as follow-through liquidation moved into the market following Monday losses. But renewed support in front-month December contracts helped to erode market weakness as nearby contracts are holding losses of 20 to 50 cents per cwt. This may add some additional firmness to the market through the near future. Cash prices are lower on the National Direct morning cash hog report. The weighted average price is $0.23 lower at $49.98 per cwt with the range from $47.00 to $51.41 on 6,012 head reported sold. Cash prices are lower on the Iowa/Minnesota Direct morning cash hog report. The weighted average price is $0.21 lower at $48.99 per cwt with the range from $47.00 to $49.50 on 3,292 head reported sold. The National Pork Plant Report posted 253 loads selling on the morning report. Pork carcass values fell $1.63 per cwt at $66.59 per cwt. Lean hog index for 11/23 is $57.44, down 0.40, with a projected two-day index of $57.17, down 0.27.

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