TOP STORIES

Covid-19 Slashes Pork Profits at Smithfield -- Market Talk

16:51 ET - Top US pork supplier Smithfield Foods managed to generate $102M in 2Q profits despite Covid-19 temporarily closing some of the company's plants, and adding $350M in costs as the company paid workers to stay home and bought safety gear for plants. Smithfield says it earned $102M for the period, less than half the total a year ago, thanks to risk management efforts--without those, the company would have lost $72M for the quarter, after a record-setting 1Q. Smithfield, owned by China's WH Group, expects results to improve in the fall as Covid-19 costs decline. (jacob.bunge@wsj.com; @jacobbunge)

STORIES OF INTEREST

Red Robin Swings to 2Q Loss as Sales Drop Off During Pandemic

Red Robin Gourmet Burgers Inc. said it lost $56.3 million in its latest quarter as sales fell and the restaurant chain reworked its operation due to the pandemic by closing locations and reopening them with limited seating capacity.

Same-store restaurant revenue for its fiscal second quarter that ended July 12 dropped 41%, a decline that shows the magnitude of the fall-off in demand as the pandemic upended the experience of dining out. Other restaurant chains have reported similar drops in demand.

Wheat Rises Ahead of WASDE Report

Wheat for September delivery rose 0.8% to $4.95 a bushel on the Chicago Board of Trade Tuesday, in reaction to Egypt buying a new tender of Russian wheat and ahead of Wednesday's WASDE report from the USDA.

Corn for December delivery rose 0.2% to $3.23 1/2 a bushel.

Soybeans for November delivery rose 0.1% to $8.73 1/2 a bushel.

Wind Damage to Corn Crop Unclear -- Market Talk

13:11 ET - Hurricane-force winds affecting crop-growing areas from Ohio to South Dakota have likely made a sizable effect on crops grown in the Midwest--specifically corn, which is more likely to suffer from being broken in the winds than other crops like soybeans. However, how large an effect the winds have had on what would otherwise be an ample 2020 corn crop remains to be seen. "The question is how much of an impact, which is very hard to assess at this point," Scott Irwin of the University of Illinois says. Currently, Irwin estimates the storm has shaved off 100M-300M bushels of corn production in the US in 2020--a pittance when compared to the 15B bushels expected to be produced in 2020. (kirk.maltais@wsj.com; @kirkmaltais)

FUTURES MARKETS

Cattle Futures Rise as Demand Improves -- Market Talk

15:16 ET - Live cattle futures on the CME rose by 1.1% to $1.083 per pound. It's the highest close for cattle futures since early March, and is in reaction to higher demand for beef among US consumers. Particularly, normally higher demand for beef ahead of Labor Day in September is being amplified in reaction to consumers opting to stay home to avoid coronavirus risks. "Pent up demand due to COVID restrictions and lack of dining out options in a number of areas will likely induce consumers to do more home grilling and socializing," says Steiner Consulting. Hog futures, meanwhile, finished trading down 3.7% to 51.825 cents per pound, giving back much of yesterday's 5.6% gain. (kirk.maltais@wsj.com; @kirkmaltais)

CASH MARKETS

 
Estimated U.S. Pork Packer Margin Index - Aug 11 
 
 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 11       +$ 65.15            +$ 17.27 
Aug 10       +$ 62.93            +$ 17.42 
Aug  7       +$ 66.54            +$ 20.82 
 
* 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   95.2 
      (Percent of Year-Ago)      Select   98.6 
 
USDA Boxed Beef, Pork Reports 

Wholesale choice-grade beef prices Tuesday rose 88 cents per hundred pounds, to $208.08, according to the USDA. Select-grade prices rose $1.09 per hundred pounds, to $195.02. The total load count was 156. Wholesale pork prices fell 7 cents, to $69.77 a hundred pounds, based on Omaha, Neb., price quotes.

(END) Dow Jones Newswires

August 11, 2020 17:32 ET (21:32 GMT)

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