Higher Livestock Production Weighs on Futures -- Market Talk
12:07 ET - The recent downward movement of livestock futures--both cattle and hogs--is linked to the higher production of livestock in the US seen this year, particularly for hogs. "Hog price performance in recent weeks may have been disappointing but probably not that surprising for those that have been following production trends," Steiner Consulting says. According to USDA data, hog slaughter rates are up 2.43M head, 10% higher than this time last year. Steiner projects that the rate will be 2.35M head by the end of the year, 9% higher than last year. Heavier hogs are also affecting supply, as each hog slaughtered is yielding more pork. July hog futures are up 0.1%. (email@example.com; @kirkmaltais)
STORIES OF INTEREST
China Cracks Down on Canadian Pork
OTTAWA -- Canada said Tuesday China has banned imports from a Canadian pork company, weeks after Canadian officials warned the meat industry of heightened Chinese scrutiny of its products amid a broader diplomatic row between Ottawa and Beijing.
A spokeswoman for Canada's Agriculture Minister, Marie-Claude Bibeau, said Canadian diplomats in Beijing were informed last week of the temporary suspension of pork imports from a Quebec processor, Frigo Royal. Customs agents in China are said to have found traces of a feed additive, ractopamine, in a shipment of frozen pork. Ractopamine is banned in China, the spokeswoman said, although allowed for use by Canadian food-safety authorities.
Japan a Focus for Sending More US Agriculture Exports -- Market Talk
12:18 ET - USTR Robert Lighthizer says that negotiations are continuing with Japan in order to open up the country further for US agricultural and livestock exports--especially important considering the trade standoff with China and a need for alternative markets as a result. Lighthizer, testifying to legislators on the Senate Finance Committee, says the US is "making headway" with working out a larger agreement with Japan, with more headway hopefully coming during the G-20 Summit in Japan. Agricultural futures on the CBOT are largely down today, with corn down 1.2% and wheat down 1.5%. Soybeans are up 0.1%. (firstname.lastname@example.org; @kirkmaltais)
Trump Administration Weighs Further Boost to Ethanol
The Trump administration is looking to make further changes to ethanol rules after the president heard from farmers during a recent trip to Iowa that an initiative to boost sales of the corn-based fuel additive didn't go far enough, according to people familiar with the matter.
Possible remedies could include limiting waivers that help small oil refiners get around mandates that they blend plant-based fuels into gasoline and diesel, these people said. They cautioned that no decisions have been made.
Livestock Finishes Lower After Late Slide -- Market Talk
16:04 ET - Despite trading higher for most of the day, both live cattle and lean hog futures finished lower. August live cattle futures fall 0.1% to $1.0550 per pound while August hog futures slip 0.7% to 81.7 cents per pound. Cutout values for both hogs and cattle were lower today -- with pork belly and rib both losing over $6 per pound. Ample supply is the reason given by traders for the falling prices. (email@example.com, @kirkmaltais)
Estimated U.S. Pork Packer Margin Index - Jun 18
This report reflects U.S. pork packer processing margins. The margin indices
are calculated using current cash hog or carcass values and wholesale pork
cutout values and may not reflect actual margins at the plants. These
estimates reflect the general health of the industry and are not meant to
be indicative of any particular company or plant.
Source: USDA, based on Wall Street Journal calculations
All figures are on a per-head basis.
Date Standard Margin Estimated margin
Operating Index at vertically -
Jun 18 +$ 1.85 +$ 42.00
Jun 17 +$ 5.42 +$ 45.38
Jun 14 +$ 6.99 +$ 46.33
* 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.
This report compares the USDA's latest beef carcass composite
values as a percentage of their respective year-ago prices.
For Today Choice 99.9
(Percent of Year-Ago) Select 98.8
USDA Boxed Beef, Pork Reports
Wholesale choice-grade beef prices Tuesday fell $1.29 per hundred pounds, to $220.53, according to the USDA. Select-grade prices fell 71 cents per hundred pounds, to $201.80. The total load count was 137. Wholesale pork prices fell $1.57, to $79.94 a hundred pounds, based on Omaha, Neb., price quotes.
(END) Dow Jones Newswires
June 18, 2019 17:35 ET (21:35 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.