TOP STORIES

 

Kona Grill to Keep PPP Loans -- Market Talk

09:15 ET - Restaurant holding company ONE Group Hospitality says it's keeping a total of $18.3M in federal Paycheck Protection Program loans after a review. It will use the funds to hire back workers as it reopens restaurants. The owner of STK and Kona Grill says as a small public company it has limited access to raise funds through capital markets. The company says it "conducted an extensive and comprehensive review, including consultations with its outside advisors," before accepting the funds. Shake Shack and other public restaurant companies have returned the funding after public pressure and guidance by the Treasury Department. (heather.haddon@wsj.com; @heatherhaddon)

 

Ocado Shares Get Lift As Lockdown Boosts Trade -- Market Talk

17:03 GMT - Ocado Group's positive run continues as the stock sets another all-time high, says CMC Markets. Shares in the U.K. online grocer and international retail-technology specialist were among the biggest FTSE 100 risers, up 2.7% to 19.15 pence. The company's market capitalization now exceeds the value of traditional retail rivals Sainsbury, Morrison and Marks & Spencer combined, CMC says. "Ocado has seen a surge in demand for its services due to the lockdown," says CMC's David Madden. "Last week, it confirmed that second-quarter retail revenue jumped by over 40%. Online shopping was already becoming more popular and the health crisis is likely to have sped up its growth rate." (philip.waller@wsj.com)

 

STORIES OF INTEREST

 

Grocery Outlet Fiscal Q1 Sales Rise 25% Amid Coronavirus Pandemic -- MarketWatch

Grocery Outlet Holding Corp. (GO) shares rose nearly 4% in the extended session Monday after the retailer topped Wall Street expectations for its adjusted quarterly profit and said stockpiling in the current quarter has offset a decline in foot traffic amid the coronavirus pandemic. Grocery Outlet said it earned $12.6 million, or 13 cents a share, in the fiscal first quarter, compared with $3.8 million, or 6 cents a share, in the year-ago period. Adjusted for one-time items, the company earned $34 million, or 36 cents a share, compared with $9.9 million, or 15 cents a share, a year ago. Sales rose 25% to $760 million, compared with $606.3 million in the first quarter of fiscal 2019, the company said. Analysts polled by FactSet had expected adjusted EPS of 32 cents a share on sales of $760 million. Comparable-store sales rose 17% compared with a 4.2% increase in the same period last year, the company said. So far in the current quarter, same-store sales growth is tracking in the mid-teens, thanks to "increase in average basket size partially offset by declines in store traffic due to shelter-in-place restrictions," Grocery Outlet said. "The impact of the COVID-19 situation remains fluid and therefore it is difficult to predict the impact of potential changes to shelter-in-place restrictions." The company did not provide official earnings guidance, but said its "performance and liquidity position remain strong, allowing us to continue investing in pursuit of our long term growth strategies." Shares of Grocery Outlet had ended the regular trading day down 0.1%.

 

USDA Phase One Projection Could Surprise -- Market Talk

12:26 ET - Grains traders could be in for a surprise if optimism for China fulfilling its obligations under the US-China Phase One trade agreement is factored into export projections in tomorrow's WASDE report. "If the USDA were to assume that the Chinese will make a run at fulfilling the Phase 1 agreement, it is likely that the 2020/21 initial export forecasts could come in above trade expectations," says RJO Futures. Analysts polled by WSJ expect 2020/21 soybean carryouts to be 452M bushels, a slight decrease from the 501M bushel carryout expected in 2019/20. Should the USDA factor in higher exports, then carryouts for soybeans and other grains could be well below 2019/20 figures. (kirk.maltais@wsj.com; @kirkmaltais)

 

FUTURES MARKETS

 

Livestock Futures Drop Monday -- Market Talk

15:16 ET - After starting the day mixed, livestock futures finished the day lower. Live cattle futures on the CME finished the day down 2.1% at 92.675 cent per pound, while lean hog futures finished down 2.3% at 60.275 cents per pound. A backup in livestock supplies, even with some meatpacking plants reopening this week, is weighing on futures prices. "The livestock sector [is] generally under pressure... with backed up supplies of cattle reaching near a million head due to plant closures," says Arlan Suderman of INTL FCStone. (kirk.maltais@wsj.com; @kirkmaltais)

 

CASH MARKETS

 
Estimated U.S. Pork Packer Margin Index - May 11 
 
Source: USDA, based on Wall Street Journal calculations 
All figures are on a per-head basis. 
 
Date     Standard Margin       Estimated margin 
         Operating Index         at vertically - 
                             integrated operations 
 
May 11       +$176.82            +$127.31 
May  8       +$161.70            +$116.24 
May  7       +$162.22            +$115.83 
 
 
* 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  211.9 
      (Percent of Year-Ago)     Select  218.3 
 
USDA Boxed Beef, Pork Reports 

Wholesale choice-grade beef prices Monday rose $7.70 per hundred pounds, to $468.58, according to the USDA. Select-grade prices rose $3.98 per hundred pounds, to $452.97. The total load count was 134. Wholesale pork prices rose $5.15, to $120.95 a hundred pounds, based on Omaha, Neb., price quotes.

(END) Dow Jones Newswires

May 11, 2020 17:48 ET (21:48 GMT)

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