TOP STORIES

Hormel Not Immune as Meat Glut Persists -- Market Talk

12:02 ET - Hormel Foods' (HRL) deep presence in branded meat products and other grocery-store staples like peanut butter have helped insulate the Spam maker from commodity-market ups and downs, but Vertical Group analysts warn that HRL "is not completely immune" as expanding livestock herds and poultry flocks pressure pricing. Vertical Group is cautious on all meat-centric stocks in light of rising supplies, and HRL's earnings report Thursday showcased the potential pitfalls as struggles in its Jennie-O Turkey Store division forced Hormel to reduce its 2017 profit forecast. HRL sank 5.4% Thursday and heads another 1.3% lower Friday, recently $34.83. (jacob.bunge@wsj.com; @jacobbunge)

McDonald's Expected to Boost Savings, Shareholder Returns -- Market Talk

12:18 ET - When McDonald's (MCD) hosts an investor meeting on March 1, analysts expect the burger chain to announce an increase in cost savings and a return of more cash to shareholders. Barclays expects MCD to raise its target for general and administrative savings to $600M-$700M, up from the $500M previously forecast. Barclays also predicts MCD will bump its cash returns to shareholders by about 10% over the next three years. Investors also will be looking for more news on menu products and promotions. MCD says the meeting is an interactive event in which investors will learn about new technology the chain will use. (julie.jargon@wsj.com)

STORIES OF INTEREST

Young Farmers at Risk in Farm Sector Slump -- Market Talk

14:38 ET - Young farmers are among those carrying the most debt when compared to the value of their assets, says USDA Chief Economist Robert Johansson, a calculation that leaves them especially vulnerable to continued low crop prices. In part because they rent more of the land on which they grow crops, young farmers' costs to raise a crop tend to be higher, prompting them to take on more debt to stay in business. More than one third of farmers 34 years old and younger are "highly" or "very highly" leveraged, Johansson says, with that figure expected to grow if the current farm sector slump persists. Other pockets of stress: one in five wheat, cotton, hog and poultry farms have debt-to-asset ratios upwards of 40%, or about three times the national average. (jesse.newman@wsj.com; @jessenewman13)

U.S. Grain Futures Slip Amid Sluggish Export Sales; Soybeans Rise

CHICAGO--U.S. wheat and corn futures declined Friday in a quiet trading session, as traders remained pessimistic toward big grain supplies despite projections for smaller harvests this year. Soybean futures climbed.

March-dated Chicago wheat futures declined 1.5%, even as U.S. Department of Agriculture analysts forecast domestic wheat acreage to decline by about 8% this year and inventories to fall by about one-fifth by the end of the 2017-2018 crop season, to the lowest level in three years.

FUTURES MARKETS

Lean Hog Futures Rebound on Stronger Belly Prices

U.S. lean hog futures climbed Friday, driven up a rebound in pork belly prices.

CME lean hogs rose 2.2% for April delivery to close at 68.025 cents a pound, snapping a three-day losing streak that took the contract 6% lower.

A day earlier, the U.S. Department of Agriculture showed that total inventory of pork bellies in commercial freezers at the end of January fell 77% from a year ago to 14 million pounds, the lowest storage level in the data set's 60-year history. On Friday, the USDA showed the average wholesale price for belly jumped $9 per 100 pound to $164, while the average carcass price added $2.32 to $82.58 per 100 pound.

CASH MARKETS

 
 
Estimated U.S. Pork Packer Margin Index - Feb 24 
 
 
All figures are on a per-head basis. 
 
Date     Standard Margin       Estimated margin 
         Operating Index         at vertically 
                             integrated operations 
                                      * 
Feb 24       +$21.59             +$ 42.08 
Feb 23       +$13.70             +$ 38.30 
Feb 22       +$ 9.40             +$ 38.75 
 
* 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   91.4 
      (Percent of Year-Ago)     Select   91.5 
 
USDA Boxed Beef, Pork Reports 

Wholesale choice-grade beef prices Friday rose $2.77 per hundred pounds, to $198.96, according to the USDA. Select-grade prices rose $2.65 per hundred pounds, to $195.48. The total load count was 92. Wholesale pork prices rose $1.76, to $81.31 a hundred pounds, based on Omaha, Neb., price quotes.

(END) Dow Jones Newswires

February 24, 2017 17:35 ET (22:35 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.