LIVESTOCK HIGHLIGHTS: Top Stories of the Day
13 August 2019 - 10:43PM
Dow Jones News
TOP STORIES
Cattle Continue to Sink on Tyson Plant Concerns -- Market Talk
10:11 ET - Live cattle futures on the CME are down 3.4%, as
traders are watching for updates from Tyson Foods about the fire at
its Kansas beef plant, which was on its own responsible for roughly
5% of beef production in the US. Cattle futures have lost
approximately 6% since the fire happened, but traders believe that
the plant will not be offline for as long as originally believed.
"I think people are getting a sense that this isn't the end of the
world," says Troy Vetterkind of Vetterkind Cattle Brokerage. Lean
hog futures, meanwhile, are up 1% so far for Tuesday's session.
(kirk.maltais@wsj.com; @kirkmaltais)
STORIES OF INTEREST
Higher Pork Costs Hurts Margins at Premium Brands -- Market Talk
08:11 ET - Investors looking to see how the outbreak of African
swine fever in China can ripple through a food producer should
consider Premium Brands Holdings, which makes a variety of meat
products under various brand names. The Canadian company reports
higher costs for commodity pork in 2Q due to the outbreak in China,
hurting its specialty food unit's gross profit margin. The company
raised prices as pork expenses increased but many of those gains
didn't take hold until the end of the quarter. "No one knows how
this issue is going to play out," CEO George Paleologou says.
(micah.maidenberg@wsj.com; @MicahMaidenberg)
McDonald's Reaping Rewards From Focus on Future -- Market Talk
12:21 ET - MKM begins coverage of McDonald's with a buy rating
largely on the company's push to modernize its restaurants, which
the investment bank thinks is already paying off. New restaurant
formats that combine technology like touchscreens with enhanced
menu options are creating an atmosphere where guests are
"increasingly comfortable," and restaurants are seeing higher
sales, MKM believes. The investment bank also says the company's
delivery efforts "continue to gain momentum," with 2019 global
delivery sales expected to approach $4B, or 4%-5% of total sales.
MKM gives McDonald's a $250 price target. McDonald's shares are up
1.2% to $219.76 and more than 23% higher year-to-date.
(patrick.sheridan@wsj.com)
Corn Continues to Tumble in Reaction to WASDE
Corn for December delivery fell 4.1% to $3.76 1/2 a bushel on
the Chicago Board of Trade on Tuesday, with traders continuing to
respond to estimates for higher-than-expected yields and planted
acreage. Soybeans for December delivery gained 1.1% to $8.89 a
bushel. Wheat for September delivery rose 0.1% to $4.72 a
bushel.
Agriculture Stocks Jump on New US-China Talks -- Market Talk
10:11 ET - A potential thaw in chilly US-China trade relations
boosts stocks of agricultural traders and suppliers. Archer Daniels
Midland and Bunge each rise 2.6%, outpacing gains in US stock
indexes, after US officials say they Trump administration will
delay some planned tariffs on Chinese products until mid-December,
giving investors hope that China could begin buying US crops and
meat again. Ethanol makers, which have banked heavily on Chinese
demand for the corn-based fuel additive, also get a boost, with
Green Plains up 3%. (jacob.bunge@wsj.com; @jacobbunge)
FUTURES MARKETS
Livestock Take Another Hit -- Market Talk
15:54 ET - The Tuesday session ended with livestock futures
taking a beating, with October live cattle closing limit down,
falling 4.3% to 99.25 cents per pound. It's the lowest the contract
been since April 4 of last year, driven mostly by questions
surrounding how fast Tyson Foods' beef processing plant in Kansas
can recover from the fire over the weekend. Meanwhile, lean hog
futures on the CME took a spill as well, after rising yesterday.
The contract dropped 3.7% to 64.575 cents per pound.
(kirk.maltais@wsj.com; @kirkmaltais)
CASH MARKETS
Estimated U.S. Pork Packer Margin Index - Aug 13
This report reflects U.S. pork packer processing margins. The margin indices
are calculated using current cash hog or carcass values and wholesale pork
cutout values and may not reflect actual margins at the plants. These
estimates reflect the general health of the industry and are not meant to
be indicative of any particular company or plant.
Source: USDA, based on Wall Street Journal calculations
All figures are on a per-head basis.
Date Standard Margin Estimated margin
Operating Index at vertically -
integrated operations
Aug 13 +$ 31.50 +$ 59.16
Aug 12 +$ 37.22 +$ 61.44
Aug 9 +$ 30.62 +$ 60.60
* 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 108.6
(Percent of Year-Ago) Select 100.5
USDA Boxed Beef, Pork Reports
Wholesale choice-grade beef prices Tuesday rose $7.74 per
hundred pounds, to $226.36, according to the USDA. Select-grade
prices rose $2.79 per hundred pounds, to $200.58. The total load
count was 173. Wholesale pork prices fell $1.06, to $87.92 a
hundred pounds, based on Omaha, Neb., price quotes.
(END) Dow Jones Newswires
August 13, 2019 17:28 ET (21:28 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.