LIVESTOCK HIGHLIGHTS: Top Stories of the Day
26 April 2017 - 11:06PM
Dow Jones News
TOP STORIES
Investors Ho-Hum on Tyson's Sandwich Deal -- Market Talk
11:37 ET - Tyson Foods (TSN) trumpets its $4.2B deal to acquire
sandwich-maker AdvancePierre (APFH) as the next step as the meat
supplier builds a prepared foods franchise, but some investors
hoped for a deal with more pizzazz, according to JPMorgan. "Many
investors (and we) were looking for a deal in branded retail, not
private label food service," JPM says, noting the deal size also
undershoots recent TSN executive statements that the company could
deploy $10B for the right acquisition. Analysts say TSN is under
pressure to make the deal work as advertised, including delivering
on sales synergies. But, it's worth noting that some analysts
initially were skeptical about the $7.7B Tyson paid for Hillshire
in 2014, now regarded as a major success. (jacob.bunge@wsj.com;
@jacobbunge)
Cargill to Exit Cattle Feedlots in Beef Shift -- Market Talk
10:43 ET - Agricultural conglomerate Cargill strikes a deal to
sell its two remaining US cattle feedlots to ethanol producer Green
Plains (GPRE), reflecting shifting priorities for both companies.
For Cargill, the $36.7M sale frees up capital the company has been
redeploying to beef processing and higher-margin meat products,
after several years of punishing conditions for feedlots, which
have struggled as beef prices slid. But rising cattle prices in
recent months have revived feedlots' fortunes, and GPRE sees
Cargill's Kansas and Colorado feedlots as a good bet--and a steady
consumer of the animal-feed byproduct from ethanol production.
GPRE, which agreed to supply cattle to Cargill in the deal, rises
1.7%. (jacob.bunge@wsj.com; @jacobbunge)
Burger King Sales Drop While McDonald's Showed Gain -- Market
Talk
09:37 ET - Restaurant Brands (QSR) reported a rare same-store
sales miss at its Burger King and Tim Hortons chains at a time when
McDonald's (MCD) posted a gain. Are the Golden Arches stealing
customers from the King? Burger King posted a 2.2% decline in 1Q US
same-store sales, while MCD US SSS rose 1.7% in the quarter,
beating analyst estimates. MCD has pledged to place a renewed focus
on attracting its core fast-food customers and has become more
price-competitive, with $1 any-size soda and coffee drinks.
Same-store sales at Tim Hortons Canada fell less than 1%. QSR off
4.6% to $55.84. (julie.jargon@wsj.com)
STORIES OF INTEREST
Tyson Plans Higher Pay, More Training to Retain Slaughterhouse
Workers
Tyson Foods Inc. plans to pay more at some meat plants and
expand training to boost retention and reduce injuries in
notoriously tough jobs.
The meat company said Wednesday it also plans to publish regular
audits of its operations conducted by external groups and to
include employees in evaluations of plant performance and worker
treatment.
Alarm Sounds In Farm Country Over NAFTA Exit Chatter -- Market
Talk
17:22 ET - More farm groups raise alarms over reports that the
Trump administration is mulling a withdrawal from NAFTA, which many
crop and livestock producers say has underpinned years of growth in
exports. "Closing that door would be a terrible blow to the US
wheat industry and its Mexican customers," says the National
Association of Wheat Growers, noting that Mexico buys more than 10%
of all US wheat sold overseas. Ron Moore, an Illinois soybean
farmer and president of the American Soybean Association, calls
exiting NAFTA "a terrible idea" that would only heap further
economic difficulties on already-struggling farmers.
(jacob.bunge@wsj.com; @jacobbunge)
FUTURES MARKETS
Cattle Futures Rise as Market Battles Over Pricing
Live cattle futures closed higher Wednesday as packers and
producers played a game of push-pull on pricing.
The weekly online Fed Cattle Exchange, which in recent months
traders have watched closely for pricing discovery in the market,
produced sales of 1,945 cattle versus 5,448 head for sale at a
weighted average price of $1.3168 a pound for delivery over the
next nine days, with cattle price for delivery 30 days out down to
$1.2542 a pound.
Traders watching the online auction were confounded by several
offers to buy heifers at $1.35 a pound that didn't lead to a
sale.
CASH MARKETS
Zumbrota, Minn Hog Steady At $34.00 - Apr 26
Barrow and gilt prices at the Zumbrota, Minn., livestock market
today are steady at $34.00 per hundredweight.
Sow prices are steady. Sows weighing under 450 pounds are
$35.00-$37.00, 400-450 pounds are at $35.00-$37.00, 450-500 pounds
are $35.00-$37.00 and those over 500 pounds are $39.00-$41.00.
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 - Apr 26
All figures are on a per-head basis.
Date Standard Margin Estimated margin
Operating Index at vertically -
integrated operations
*
Apr 26 +$33.09 +$ 26.74
Apr 25 +$36.42 +$ 27.71
Apr 24 +$38.03 +$ 29.10
* 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 99.5
(Percent of Year-Ago) Select 97.9
USDA Boxed Beef, Pork Reports
Wholesale choice-grade beef prices Wednesday rose 17 cents per
hundred pounds, to $219.18, according to the USDA. Select-grade
prices fell 55 cents per hundred pounds, to $205.72. The total load
count was 135. Wholesale pork prices fell 45 cents, to $72.84 a
hundred pounds, based on Omaha, Neb., price quotes.
(END) Dow Jones Newswires
April 26, 2017 17:51 ET (21:51 GMT)
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