DTN Early Word Opening Livestock
Meat Futures Geared to Open with Mixed Prices
GENERAL COMMENTS:
Cattle: Steady w/Thurs Futures: mixed Live Equiv $146.42 - $1.35*
Hogs: Steady-$1 HR Futures: mixed Lean Equiv $109.38 - 0.57**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
Given generally moderate movement in all areas of feedlot country yesterday, our guess in that the lion's share of cash cattle trading in done for the week. To be sure, we should see scattered clean-up action at prices steady with last week's market (i.e., $118 in the South; $188-189 in the North). Though still very good, packers margins narrowed significantly this week as carcass value dropped much harder than the cost of live inventory. Cattle remaining on showlists are priced around $120 in the South and $190 plus in the North. Live and feeder futures should open on a mixed basis thanks to residual buying on one hand and long liquidation on the other.
Expect hog buyers to open their final round of procurement of the week with steady to $1 higher bids. The Saturday kill will probably be close 190,000 head. Decent packer margins would seem to justify an even bigger weekend effort to compensate for the holiday downtown. Yet relatively light offerings make it tough to put any more barrows and gilts into Saturday. Lean futures seem staged to begin on both sides of unchanged this morning tied to further profit taking by bull spreaders and positioning before the weekend break.
| BULL SIDE | BEAR SIDE | ||
| 1) | Cattle futures scored an impressive reversal on Thursday, bouncing off 100-day moving averages and showing hopeful signs of bottoming potential. | 1) | Beef cut-outs took another hit yesterday as production continued to overwhelm post holiday demand. At $220.53, the choice cut-out fell to its lowest level since April 27. Box supplies were described as "heavy." |
| 2) | Though feedlot sales are mostly lower again this week, the cash market has softened at a much slower rate. Country psychology seems less panicky and ready numbers somewhat more manageable. | 2) | The pork carcass value closed moderately lower on Thursday with all major primals quoted lower, especially the rib. |
| 3) | The rather strong seasonal tendency is for cash hogs to strengthen over the next couple of weeks. | 3) | Given the way the gap between the cash index and pending spot August lean hog futures, many believe the summer's bullish hour glass is quickly running out of sand. |
| 4) | As bellies approach record levels, most believe that summer bacon demand will remain strong for at least another 2-4 weeks. | 4) | During the week ending July 1, U.S. hatcheries set 223 million broiler eggs in incubators, up 4 percent from a year ago. At the same time, broiler growers placed 184 million chicks for meat production, up 1 percent from 2016. |
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CATTLE: (foodmarket.com) -- Holiday retail meat clearance was reported mostly favorable as the weather cooperated for grilling activities in key areas of the country. Looking ahead, major retail buying occasions are scarce during the remainder of the summer and, with the dog days approaching, grocers will be looking to incentivize consumers with attractive features and promotions.
Retail feature prices on beef have generally trended at a 3-year low for much of 2017. Wholesale beef prices are also currently at 3-year lows overall, however a period of inflation that began in late April and lasted through early June could affect grocers ability or willingness to feature aggressively in the near term. Lag time between retail purchasing and the wholesale market can be as much as 6 to 8 weeks, so it's possible we have yet to see the retail side reflect the price levels from this spring's higher beef market. With Independence Day features for ground beef as low as $1.77 per lb., we can speculate that sales were positive for the holiday. However, the challenge for grocers will be getting consumers to be regular purchasers of beef throughout the remainder of the summer.
Wholesale pork prices are up about 15% overall from a year ago, experiencing a steady climb since the beginning of May. Retail prices on pork chops average 4% lower than year ago levels this week, while the rib category is running 3% higher. Pork loin is currently 7% below year ago. Retail brand label bacon is up 6% and—with wholesale belly prices at all time highs due to strong demand and low stocks available in inventory—we could see limited feature activity this summer on bacon. Despite the retail pork index running 9% above the 3-year average, the price sticker on many pork cuts is still tough to beat against other comparable protein items.
Chicken retail features trended close to 2016 levels in the first quarter, but began advancing over year ago in the spring. We've seen multi-year highs for the period on several occasions since then. Boneless skinless chicken breasts are currently 19% over the 3-year average weekly retail price. Chicken breasts have been priced over 80% lean ground beef for nearly all of 2017 to date. A staple grocery list item, chicken is now on the receiving end of staunch competition from other proteins. This summer, we could see consumers more closely examining the price spread between chicken and other red meat items at the meat case.
HOGS: (thepigsite.com) -- Recently, China proved its success in cloning pigs, as test results show the new-born pigs and their surrogate sows are unrelated.
The two sows gave birth to 13 purebred baby pigs after a 110-day pregnancy in April.
The Robotics Institute at Nankai University in Tianjin headed the study on cloning pigs derived from somatic cells, in cooperation with the Animal Husbandry and Veterinary Research Institute.
The technique involved is called somatic cell nuclear transfer, a classic technique used for improving the variety of crops. It transfers the cell nucleus of a somatic cell into an egg without a nucleus.
The advantage of this method is that it guarantees the quality of the egg. However, the low rate of success limits the development of this technique.
Based on this technique, the research group invested an in-situ microanalysis micromanipulator that combined all the functions of testing, analysis, and operation into one instrument.
This robotic instrument made a great contribution in the process of removing a nucleus.
The key challenge is avoiding destroying the delicate cells during the process.
Researchers analyzed how much force was applied to cells by the instrument and then adjusted it to make sure the smallest possible force was applied when moving cells and removing nucleuses.
The deformational degree of cells decreased from 30~40 mm to 10~15 mm afterward, which remarkably improved subsequent development of cell.
Group leader Zhao Xin said the research built a connection between cell micro operation and cell development and can help others make more achievements.
The research has broad implications, and can be applied to assisted reproductive technology, plants and animals species improvement, family practice, animal production systems, and other areas.
Recently, China proved its success in cloning pigs, as test results show the new-born pigs and their surrogate sows are unrelated. The two sows gave birth to 13 purebred baby pigs after a 110-day pregnancy in April. The Robotics Institute at Nankai University in Tianjin headed the study on cloning pigs derived from somatic cells, in cooperation with the Animal Husbandry and Veterinary Research Institute. The technique involved is called somatic cell nuclear transfer, a classic technique used for improving the variety of crops. It transfers the cell nucleus of a somatic cell into an egg without a nucleus. The advantage of this method is that it guarantees the quality of the egg. However, the low rate of success limits the development of this technique. Based on this technique, the research group invested an in-situ microanalysis micromanipulator that combined all the functions of testing, analysis, and operation into one instrument. This robotic instrument made a great contribution in the process of removing a nucleus. The key challenge is avoiding destroying the delicate cells during the process. Researchers analyzed how much force was applied to cells by the instrument and then adjusted it to make sure the smallest possible force was applied when moving cells and removing nucleuses. The deformational degree of cells decreased from 30~40 mm to 10~15 mm afterward, which remarkably improved subsequent development of cell. Group leader Zhao Xin said the research built a connection between cell micro operation and cell development and can help others make more achievements. The research has broad implications, and can be applied to assisted reproductive technology, plants and animals species improvement, family practice, animal production systems, and other areas.
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John A. Harrington can be reached at john.harrington@dtn.com
John Harrington can be reached at feelofthemarket@yahoo.com
Follow John Harrington on Twitter @feelofthemarket
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