LIVESTOCK HIGHLIGHTS: Top Stories of the Day
May 24 2018 - 05:31PM
Dow Jones News
TOP STORIES
Earnings Misses Spoil Meat Stocks -- Market Talk
12:10 ET - Hormel and Sanderson Farms tumble after the meat
purveyors separately report earnings below analysts' expectations,
and offer a mixed outlook particularly for poultry. Hormel, among
the biggest turkey processors, doesn't expect growth to return to
the oversupplied turkey market until next year. Sanderson, one of
the top U.S. chicken companies, is dealing with limp demand from
restaurants. And both companies expect feed costs to move up as
grain prices strengthen. Hormel down 3%, Sanderson down 4.6%, and
other meat stocks--Tyson Foods and Pilgrim's Pride--also weaken.
(jacob.bunge@wsj.com; @jacobbunge)
A Bumpy Ride for Less-Loved Chicken Parts -- Market Talk
11:46 ET - It's going to be a bumpy ride ahead for the rear end
of U.S. chickens. Sanderson Farms CEO Joe Sanderson says the global
market for "leg quarters"--the darker-meat portions of chicken that
U.S. meatpackers typically export--faces volatility as some
countries curb U.S. poultry imports in response to a case of
Newcastle disease found in a backyard flock near Los Angeles. South
Korea maintains a ban on U.S. chicken after finding some antibiotic
residue, and Brazil's trade dispute with the EU leads exporters
there to unload its chicken in other markets. Sanderson on a
quarterly conference call says the South Korea finding is a "false
positive" and says Mexico's reopened to U.S. chicken after
localizing its ban in response to the disease finding. But it's
still an uncertain outlook for leg quarters, which tend to be
harder to sell versus breast meat. (jacob.bunge@wsj.com;
@jacobbunge)
STORIES OF INTEREST
A Fresh Battle for the Soul of the Hamburger -- Market Talk
10:17 ET - The all-beef patty faces a fresh assault as Hormel
Foods executives say its Jennie-O Turkey Store unit will revive its
"Make the Switch" campaign around ground turkey. Turkey makers have
had some success in positioning ground turkey as a replacement for
ground beef in everything from burgers to taco meat, and Hormel's
got extra incentive to ramp up sales given the turkey industry's
struggles with an oversupply of meat. But there's also a third
entrant: Top U.S. chicken processor Tyson Foods last year outlined
a new effort to propel ground chicken into the
fray.(jacob.bunge@wsj.com; @jacobbunge)
Meat Makers See Grain Prices Rising -- Market Talk
09:34 ET - Two of the biggest U.S. meat processors say higher
grain prices are on the horizon. Executives for Hormel Foods and
Sanderson Farms, respective heavyweights in pork and chicken,
expect grain prices to continue moving higher through the second
half of 2018, partly because of a cold, wet spring that delayed
planting, plus earlier weather mishaps that cut into South American
production. That's good news for farmers, who've struggled for
years with low crop prices, but ominous for meat companies, where
the cost of feed represents the biggest expense in raising poultry
and livestock. (jacob.bunge@wsj.com; @jacobbunge)
Soft Hog Prices to Slaughter COFCO Meat's Profit -- Market
Talk
0740 GMT - Falling hog prices are going to do a number on COFCO
Meat's earnings, says Morgan Stanley, while slashing estimates as
much as 60%. As such, its base stock target falls 16% to HK$1.40
while the rating remains equal weight. Shares hit 2 1/2-month highs
this morning but are currently flat at HK$1.33. They've fallen 16%
this year despite May's 9% bounce. (john.wu@wsj.com)
FUTURES MARKETS
Cattle Futures Fall on Lukewarm Demand
Cattle futures turned lower on Thursday as traders contended
with falling meat prices.
Prices for wholesale beef have fallen this week, extending their
losses on Thursday morning. The U.S. Department of Agriculture,
meanwhile, said that export sales last week fell 31% from a recent
average.
CASH MARKETS
Zumbrota, Minn Hog Steady at $40.00 - May 24
Barrow and gilt prices at the Zumbrota, Minn., livestock market are
steady at $40.00 per hundredweight.
Sow prices are steady. Sows weighing 400-450 pounds are at $31.00-$33.00,
450-500 pounds are $31.00-$33.00 and those over 500 pounds are $35.00-$37.00.
The day's total run is estimated at 100 head.
Prices are provided by the Central Livestock Association.
Estimated U.S. Pork Packer Margin Index - May 24
All figures are on a per-head basis.
Date Standard Margin Estimated margin
Operating Index at vertically -
integrated operations
*
May 24 +$11.59 +$ 26.87
May 23 +$15.59 +$ 29.45
May 22 +$17.35 +$ 31.79
* 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 93.0
(Percent of Year-Ago) Select 93.6
USDA Boxed Beef, Pork Reports
Wholesale choice-grade beef prices Thursday fell $1.08 per
hundred pounds, to $229.00, according to the USDA. Select-grade
prices fell 11 cents per hundred pounds, to $204.93. The total load
count was 147. Wholesale pork prices fell $1.20, to $72.90 a
hundred pounds, based on Omaha, Neb., price quotes.
(END) Dow Jones Newswires
May 24, 2018 17:16 ET (21:16 GMT)
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