TOP STORIES

Beef From Brazil's Amazon Can Challenge U.S. Ranchers -- Market Talk

09:06 ET - Brazil's Amazon has become a major meat producer that could challenge U.S. ranchers in global markets if quality improves, experts say. The challenge is how to do that without destroying the forest and tipping the region's climate off balance. Beef market analysts say meat production in the Amazon could double over the next several years without further deforestation, if ranchers improve farm management. "There is no room for amateurs anymore," said Moacyr Dias-Filho, a technician from the government's rural R&D agency Embrapa. (paulo.trevisani@wsj.com; @ptrevisani)

Can the U.S. Sell More Farm Goods to China? -- Market Talk

11:19 ET - Treasury Secretary Steven Mnuchin says the U.S. expects China to buy as much as 40% more agricultural products in the near future, part of a deal to avoid widespread tit-for-tat tariffs. But market participants ask how much more China can really buy. U.S. soybean exports, for example, have dropped off as a recent record harvest in Brazil allows Chinese merchants to source cheaper grain in South America. A deal won't offset those seasonal market forces. The pork trade, meanwhile, has already been hampered by tariffs. "With the exception of corn, beef, and pork where U.S. trade to China is low in absolute terms," says Ken Morrison of Morrison on the Markets, "it's unrealistic to suggest U.S. ag trade will be up substantially this year." (benjamin.parkin@wsj.com; @b_parkyn)

STORIES OF INTEREST

Dow Closes Above 25,000 for First Time Since March -- Market Talk

1607 EDT [Dow Jones] -- Easing China trade tensions help trigger a rally in U.S. stocks as industrials such as Boeing, Caterpillar and United Technologies --companies with exposure to foreign sales -- benefit from cooling trade rhetoric. Treasury Secretary Mnuchin says the U.S. will suspend efforts to apply tariffs to $150B in Chinese imports and that China would hold its threat to retaliate with tariffs on U.S. goods. Meanwhile, General Electric gains 1.9% after agreeing to merge its railroad business with Wabtec, an equipment maker for transit systems. Oil prices cross over the $72-a-barrel mark, fueled by de-escalating trade tensions and indications Venezuela crude oil output may drop more. DJIA adds 298 points to 25013, the S&P 500 gains 20 to 2733 and the Nasdaq climbs 39 to 7394. (patrick.sheridan@wsj.com)

Treasury Secretary Says U.S., China Have Suspended Tariffs

The U.S. suspended its threat to impose tariffs on $150 billion in Chinese imports to the U.S. while negotiations with China continue, but President Donald Trump could impose the tariffs if a deal between the two countries doesn't progress, Treasury Secretary Steven Mnuchin said.

"Both parties have agreed to suspend the tariffs," Mr. Mnuchin said Monday in an interview on CNBC, echoing remarks he gave over the weekend. He specified that the U.S. was pausing its efforts to apply tariffs to $150 billion in Chinese imports to the U.S., and that China would hold its threat to retaliate with tariffs on $50 billion in U.S. goods.

FUTURES MARKETS

Livestock Futures Mixed; China Leaves Pork Tariffs Untouched

Livestock futures started the week mixed as traders parsed cooling trade tensions between the U.S. and China.

Live cattle futures for June delivery rose 2.5% to $1.04925 a pound at the Chicago Mercantile Exchange, approaching their upper limit for the day. June lean hog contracts fell 0.9% to 74 cents a pound.

CASH MARKETS

 
Zumbrota, Minn Hog Steady At $40.00 - May 21 
 
  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 21 
 
All figures are on a per-head basis. 
 
Date     Standard Margin       Estimated margin 
         Operating Index         at vertically - 
                             integrated operations 
                                      * 
May 21       +$18.96             +$ 31.32 
May 18       +$12.71             +$ 27.64 
May 17       +$14.77             +$ 30.61 
 
* 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   93.1 
      (Percent of Year-Ago)     Select   93.1 
 
USDA Boxed Beef, Pork Reports 

Wholesale choice-grade beef prices Monday fell $1.39 per hundred pounds to $230.82, according to the USDA. Select-grade prices fell 94 cents per hundred pounds to $207.52. The total load count was 109. Wholesale pork prices rose $1.71 to $74.97 a hundred pounds, based on Omaha, Neb., price quotes.

(END) Dow Jones Newswires

May 21, 2018 17:26 ET (21:26 GMT)