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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