TOP STORIES

Hog Futures Hit Limit Down -- Market Talk

14:32 ET - July hog futures on the CME have stopped trading as the contract hit its limit down, dropping 3 cents, or 3.3%, to 87.950 cents per pound. The reasons behind the sharp move are not entirely clear, but traders say the prevailing explanation is that the futures contract followed daily cash prices for cuts lower. "Pork cutout is not responding in the manner in which we had hoped it would," says independent trader Dan Norcini. "There does not seem to be any consistent rise in the various pork cuts." Pork cutouts -- including loin, butt, and ribs -- have been steadily declining over the past week. Other traders say that investment funds, unimpressed by the volume of US exports heading to China, are liquidating their short positions ahead of the long weekend. (kirk.maltais@wsj.com; @kirkmaltais

Happy Trails to Almaty? -- Overheard

Cultural learnings of Donald Trump make benefit glorious nation Kazakhstan?

Maybe. Fans of fictional Kazakh journalist Borat Sagdiyev, played by comedian Sacha Baron Cohen, will recall when he put on a cowboy hat and crooned about his supposed homeland in a country and western bar. Though it might resemble Texas in its topography and mineral wealth, Kazakhstan isn't cattle country.

That might be changing. U.S. meat giant Tyson Foods sells a lot of beef, chicken and pork outside the U.S., and China is a huge export market. But, in response to U.S. tariffs on Chinese products, the country imposed a retaliatory levy on U.S. beef. China's total tariff is now 37%. It is just 12% for beef from? Kazakhstan.

STORIES OF INTEREST

Farm Aid Math Fuzzy -- Market Talk

08:39 ET - Traders and analysts are still unsure about how the market facilitation program of $16B for US farmers confirmed yesterday by the USDA will actually work. "The grain industry is having a difficult time understanding the new math in MFP calculations!" says AgResource. "No longer are payments based on bushels... rather, payments are based on county loss calculations due to trade disruptions to; China, the EU & Turkey and averaged across county acres/livestock units. And nearly all US ag production is eligible so that the $14.5B of benefits is spread out to everyone." The terms of the new aid also appear to discourage prevented planting, adding a further wrinkle to farmers' calculations on whether or not to plant this year. (kirk.maltais@wsj.com; @kirkmaltais)

FUTURES MARKETS

Cattle on Feed Shows Higher Cattle Supply -- Market Talk

15:30 ET - Cattle and calves on feed for the US slaughter market totaled 11.8M head as of May 1, according to the Cattle on Feed report released by the USDA today, 2% higher than last year and the highest May 1 figure since the report began in 1996. The live cattle futures contract on the CME closed before the report was released, but the market was not anticipating a bullish report - the July contract closed the session down 0.2% at $1.07950 per pound. (kirk.maltais@wsj.com; @kirkmaltais)

CASH MARKETS

 
Estimated U.S. Pork Packer Margin Index - May 24 
 
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 24       +$  4.19            +$ 46.35 
May 23       -$  3.46            +$ 46.33 
May 22       +$  3.14            +$ 49.59 
 
* 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   96.8 
      (Percent of Year-Ago)     Select  101.7 
 
USDA Boxed Beef, Pork Reports 

Wholesale choice-grade beef prices Friday rose 85 cents per hundred pounds, to $221.64, according to the USDA. Select-grade prices rose $1.94 per hundred pounds, to 208.47. The total load count was 100. Wholesale pork prices rose 1 cent, to $81.96 a hundred pounds, based on Omaha, Neb., price quotes.

(END) Dow Jones Newswires

May 24, 2019 17:52 ET (21:52 GMT)