TOP STORIES 
 

Brazil Meat Scandal Creates Opening for Competitors

Brazil's tainted meat scandal is driving up cattle prices and creating an opening for competitors in the U.S. and elsewhere that struggled to match the South American nation's low production costs.

The European Union and countries including China have banned imports from Brazil or companies there accused by police of bribing sanitary officials for health certificates. The U.S. and other countries have also stepped up inspections of Brazilian imports.

The clampdown on the world's largest beef and poultry exporter pushed U.S. cattle futures to a 14-month high on Wednesday. Tight supply is pushing up prices in Australia, too, and some analysts expect chicken prices to rise in China.

Immigrants Will Remain in Labor Force: Smithfield CEO -- Market Talk

08:45 ET - Despite rhetoric and moves from the Trump administration to tighten US immigration policy, Smithfield CEO Ken Sullivan says that meat companies and others that rely heavily on immigrant workers will continue to be able to hire them. "The issue is of such magnitude that a practical, pragmatic solution is the only thing that's going to work," Sullivan says in an interview. He adds that Smithfield, the world's largest pork producer, hasn't yet seen any impact from stricter enforcement of immigration laws, and that the Virginia-based company verifies its employees' legal standing to work in the US. (jacob.bunge@wsj.com and kathy.chu@wsj.com)

 
   STORIES OF INTEREST 
 

Brazil Meat Scandal Not Yet Benefiting US Cos -- Market Talk

3:36 ET - While global concern about the safety of Brazilian meat could ultimately help foreign producers, the situation will likely take weeks to play out, says Smithfield CEO Ken Sullivan. A number of countries have banned Brazilian meat imports, and "if that ban goes on for more than weeks at a time, then those buyers will look for different suppliers." Even so, "there are a lot of emails flying around (Smithfield) but I haven't seen any orders five days in." Smithfield, America's largest pork processor, was purchased in 2013 by China's WH Group (0288.HK). Brazilian authorities have said some of the country's largest meat producers bribed government inspectors to turn a blind eye to unsafe meat-handling practices. WH has jumped 11% this week to turn higher for 2017. (kathy.chu@wsj.com; @chukathy)

U.S. Soybeans Hit Six-Month Low as Funds Swap Bets

CHICAGO--Soybeans dropped to the lowest close in over six months on Friday as reports of booming harvests in South America continue to weigh on prices.

As signs of that bumper crop continue to roll in, funds are increasingly likely to reverse long-term bets that soybean prices would rise, said Doug Bergman, director of the agricultural trading desk at RCM Alternatives.

 
   FUTURES MARKETS 
 

Hog Futures Sink, Wiping Out Recent Gains

CHICAGO--Hog futures plunged 3% Friday as traders reversed an unexpected rally the previous day.

Lean hog futures declined during much of the week on a gloomy long-term outlook. That changed late in Thursday's session, when traders decided to take advantage of the considerable discount from cattle futures to put their money into hog contracts. The possibility of increased export demand for relatively cheap U.S. pork in light of a tainted-meat scandal in Brazil also helped spur buying.

Live cattle futures were calm by contrast, as a report released after the closing bell showed a steady supply of cattle in U.S. commercial yards.

The USDA's report was largely in line with market expectations. Total cattle and calves on feed for the slaughter market for feedlots came to 10.8 million head on March 1, a marginal increase from the previous year. U.S. feedlots brought in 1.7 million cattle in February, 1% less than a year ago, while feedlots sold 4% more cattle in February than a year ago.

 
   CASH MARKETS 
 
 
Estimated U.S. Pork Packer Margin Index - Mar 24 
 
All figures are on a per-head basis. 
 
Date     Standard Margin       Estimated margin 
         Operating Index         at vertically - 
                             integrated operations 
                                      * 
Mar 24       +$23.82             +$ 34.90 
Mar 23       +$19.07             +$ 32.45 
Mar 22       +$20.98             +$ 36.21 
 
* Based on Iowa State University's latest estimated cost of production. 
A positive number indicates a processing margin above the cost of 
production of the animals. 
 
Beef-O-Meter 
This report compares the USDA's latest beef carcass composite 
values as a percentage of their respective year-ago prices. 
 
                                 Beef 
          For Today             Choice   98.0 
      (Percent of Year-Ago)     Select   98.8 
 
USDA Boxed Beef, Pork Reports 

Wholesale choice-grade beef prices Friday fell 66 cents per hundred pounds, to $221.62, according to the USDA. Select-grade prices fell 22 cents per hundred pounds, to $215.55. The total load count was 100. Wholesale pork prices rose $1.14, to $77.97 a hundred pounds, based on Omaha, Neb., price quotes.

(END) Dow Jones Newswires

March 24, 2017 17:37 ET (21:37 GMT)