DTN Early Word Opening Livestock

 
Cattle: Steady-$2 LR Futures: mixed Live Equiv: $142.69 -0.19*
Hogs:   Steady-$1 LR Futures: mixed Lean Equiv: $ 90.31 +0.16NA**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue

GENERAL COMMENTS:

Welcome to another Friday showdown in the cash cattle market. We're surpised that buyers and sellers have found the ability to hld their breath so long followng last week's limited country movement. But it's not the first time in this age of large captive supplies chain speed funding is tough to track. At any rate, something will need to happen today in terms of comprise necessary to generate at least moderate trade voume. Opening bids should start out around $108-110 live and $173-175 dressed. Asking prices in the early rounds should remain firm at $115 live and $183-plus in the North. The June 1 on feed report will be released ths afternoon at 2:00 (CDT). Average. guesses look like this: on feed, up 3-4 percent; placed in May, off 4 percent; marketed in May, up 5 percent. Live and feeder contracts should open mixed as traders jockey ahead of cash news and new on feed data.

Look for the cash hog trade to open with bids steady to $1 lower. Processing margins have improved a little this week, yet reman very poor. It sould like pacers have short term kill needs pretty well covered at this point, especially given almost zero head scheduled for Saturday. Lean futures should open this morning on a mixed basis thanks to bull spreading and late week profit taking.

	BULL SIDE		BEAR SIDE
1)	Although the cash cattle market remained untested on Thursday, a few Northern bids seemed to improve late in the day with some reports like "would you take $110 live if I could get it?"	1)	Net beef export sales last week totaled 16,700 MT, down 25 percent from the previous week and 15 percent from the prior four-week average.
2)	Actual beef exports last week totaled 18,600 MT, another marketing-year high (slightly higher than the previous week) and up 11 percent from the prior four-week average.	2)	Even if the June 1 on feed report set for release this afternoon confirms a 4 percent drop in May placement activity (i.e., the average trade guess), such an in-movent would still be historical large, roughly 9 percent larger than the five-year average.
3)	The seasonal tendency is for cash hog prices to strengthen over the next several of weeks.	3)	Net pork export sales last week totaled 9,600 MT, down 35 percent from the previous week and 42 percent from the prior four-week average. At the same time, actual exports totaled 19,500 MT, down 13 percent from the previous week and 11 percent from the prior four-week average.
4)	This week's hog slaughter is expected to come in lower than last week and higher than 2017 by less than 2 percent. Harvest levels still are likely to head lower the next two or three weeks, on an absolute basis.	4)	China implemented a 25 percent duty on most U.S. pork items on April 2. Last week levied a second round of tariffs to be imposed on July 6. U.S. pork now faces cumulative import duties of 71 percent, not including value added tax, according to a formula published on the website of China's finance ministry.

OTHER MARKET SENSITIVE NEWS:

CATTLE: (North American Meat Institute) — The North American Meat Institute issued the following statement from its President and CEO Barry Carpenter regarding the expanded list of eligible exports of U.S. beef to China:

The North American Meat Institute (Meat Institute) applauds USDA's diligent efforts to secure approval for an additional 20 U.S. facilities that are now eligible to export beef to China. This positive development reflects USDA's continuous work to increase U.S. beef market access to China one year after U.S. beef exports to the country resumed. Beef exports to China/Hong Kong have increased 23 percent in volume and 51 percent in value since last year, with good potential for further growth in 2018. The approval of these additional 20 U.S. facilities serves to bolster this momentum, and the Meat Institute looks forward to working closely with USDA and our members to ensure more U.S. beef suppliers become eligible to export their high-quality products to China.

Unfortunately, because of escalating trade friction with China, U.S. beef suppliers may not be able to reach their true export potential in the Chinese market. To avoid the adverse consequences that come from such disagreements, the Meat Institute urges China and the U.S. to work diligently to resolve any differences and to do so as soon as possible.

HOGS: (The Guardian) -- Scientists have genetically engineered pigs to be immune to one of the world's most costly animal diseases, in an advance that could propel gene-editing technology into commercial farms within five years.

The trial, led by the University of Edinburgh's Roslin Institute, showed that the pigs were completely immune to porcine reproductive and respiratory syndrome (PRRS), a disease that is endemic across the globe and costs the European pig industry nearly £1.5bn in pig deaths and decreased productivity each year.

Pigs infected with PRRS are safe to eat but the virus causes the animals breathing problems, causes deaths in piglets and can cause pregnant sows to lose their litter. There is no effective cure or vaccine, and despite extensive biosecurity measures about 30% of pigs in England are thought to be infected at any given time.

After deleting a small section of DNA that leaves pigs vulnerable to the disease, the animals showed no symptoms or trace of infection when intentionally exposed to the virus and when housed for an extended period with infected siblings.

"It is what we call complete immunity," said Christine Tait-Burkard of the Roslin Institute and first author of the work, published in the Journal of Virology.

The advance could have huge animal welfare and economic benefits to farming, she said, but added it is "likely to be several years before we're eating bacon sandwiches from PRRS-resistant pigs".

Genetically modified animals are banned from the food chain in the UK and throughout Europe but it is not clear whether these regulations would apply to gene-edited animals, since the technology and resultant genetic changes are different. It also remains to be seen whether the public will embrace the prospect of genetically edited meat.

Gene editing differs from older genetic modification techniques, which often involve transferring genes from one species to another. By contrast, gene editing uses precise molecular tools to remove small stretches of DNA or alter single letters in the genetic code -- effectively speeding up processes that could occur naturally over many generations.

The PRRS-resistant pigs were made by removing about 450 letters of DNA, causing a receptor, called CD163, that sits on the outside of pig cells to be made lacking one tiny, precise segment that the virus binds to. This means the virus bounces off the cell rather than entering it and multiplying.

John Harrington can be reached at harringtonsfotm@gmail.com

Follow John Harrington on Twitter @feelofthemarket

(BAS)

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