TOP STORIES

 

Farmers Fear Estate Tax Hit in Biden Plan -- Market Talk

1020 ET - President Biden's goal to slash US greenhouse gas emissions has grabbed headlines in the US Farm Belt, but farmers may be more fixated on his tax policy. In a late April survey conducted by Purdue University and CME Group, 95% of responding farmers said they were either somewhat or very concerned that changes in federal tax policy would make it harder to pass farms on to younger generations, with the potential elimination of the step-up in cost basis for farmland in inherited estates a particular worry.Biden's American Families Plan would eliminate that exemption, though some agricultural-state lawmakers say they are looking at exemptions for farmers. (jacob.bunge@wsj.com; @jacobbunge)

 

STORIES OF INTEREST

 

Times Square Taco Bell Location Offers Pickup from Food Lockers -- Market Talk

13:10 ET - Yum Brands' Taco Bell has a new location in Times Square that aims to have customers order online or via electronic kiosks. Customers who order online can pick up their food from locked cubbies. The store is a Taco Bell Cantina, the company's upscale, open-kitchen concept that deviates from its traditional restaurants. Though the concept predates the pandemic, it is part of a growing trend among restaurants, which are trying to accommodate new consumer expectations with less human interaction and time spent indoors. Restaurants have experimented with at-home meal kits, QR codes, and other digital technology to meet consumer demand. "It is about that speed, convenience, ease-creating that seamless experience for consumers," says Noam Dorros, director analyst at Gartner. (ann-marie.alcantara@wsj.com)

 

US Farmer Sentiment Stays Strong -- Market Talk

10:35 ET - US farmers are maintaining an optimistic view of the future amid high prices for row crops. In its latest Ag Economy Barometer performed by Purdue University and CME Group, farmer sentiment was measured at 178 out of 200, up one point from last month. "The strength in commodity prices continues to drive improving expectations for strong financial performance, even as many are seeing rising input costs," says James Mintert, director of Purdue University's Center for Commercial Agriculture. The report is derived from a telephone survey of 400 US agricultural producers performed in late April. (kirk.maltais@wsj.com; @kirkmaltais)

 

Bunge Sees Market for Low-Carbon Food -- Market Talk

09:29 ET - Farmers and agricultural companies are doing the math on the cost of carbon-mitigation efforts, versus the payoffs in higher yields or premium prices for more sustainably raised products. Bunge CEO Greg Heckman says those efforts over the long term will create markets for "low-carbon" products and services, which should benefit farmers and supply chain companies like Bunge. "That's new demand," Heckman says. (jacob.bunge@wsj.com; @jacobbunge)

 

Resisting Irrational Exuberance on the Farm -- Market Talk

0853 ET - The global rally in agricultural commodities is still going strong, but executives of soybean-processing giant Bunge say they are thinking about what comes next. Comparisons have been drawn to 2008, when crop prices rallied hard and some agricultural companies struggled when prices eased. Bunge CEO Greg Heckman says that the St. Louis company has spent two cyears tightening up on spending and aligning its far-flung global operations, which should insulate Bunge from deflation at the farm gate. New sources of demand, like plant-based meat alternatives and biofuels, could help maintain the agriculture sector's momentum, he says. (jacob.bunge@wsj.com; @jacobbunge)

 

FUTURES MARKETS

 

Live Cattle Futures Sink -- Market Talk

1504 ET - Live cattle futures on the CME fall as prices for feed ingredients stayed on the rise in trading today. The June cattle contract closed down 2% to $1.13125 per pound today, this while June lean hog futures closed 0.8% higher at $1.1355 per pound. For cattle, futures have shed over 10 cents per pound in the past month -- partially due to higher cattle slaughters versus this time last year, according to USDA data. "Last week fed cattle slaughter was 516k head compared to 353k head a year ago," says Steiner Consulting Group. "Fed slaughter is still about 20k head smaller than the comparable week in 2019 but heavier fed cattle weights are helping offset some of the decline." (kirk.maltais@wsj.com; @kirkmaltais)

 

CASH MARKETS

 
Estimated U.S. Pork Packer Margin Index - May 4 
 
 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 - ß                             integrated operations 
 
May  4       -$ 25.74            +$ 93.55 
May  3       -$ 19.44            +$ 94.16 
Apr 30       -$ 21.95            +$ 92.41 
 
* 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   79.8 
      (Percent of Year-Ago)      Select   79.5 
 
USDA Boxed Beef, Pork Reports 
 

Wholesale choice-grade beef prices Tuesday rose $1.92 per hundred pounds, to $301.22, according to the USDA. Select-grade prices rose 12 cents per hundred pounds, to $283.91. The total load count was 130. Wholesale pork prices fell 28 cents, to $109.25 a hundred pounds, based on Omaha, Neb., price quotes.

(END) Dow Jones Newswires

May 04, 2021 17:27 ET (21:27 GMT)

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