DTN Early Word Opening Livestock

Cattle: Steady w/Wed Futures: Mixed Live Equiv $130.82 - .43*
Hogs: $1-2 LR Futures: Mixed Lean Equiv $ 92.68 - .75**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue

GENERAL COMMENTS:

A late-week round of light trade volume could surface Friday in parts of cattle-feeding country. Yet we suspect the lion's share of cash business for the week is already in the can. Scattered bids are likely to be around $105 to $106 in the South and $168 yo$170 in the North. Late-week asking prices should be close to $107 in the South and $173 plus in the South. The Aug. 1 Cattle on Feed report will be released Friday afternoon. Average private guesses anticipate the following: on feed, up 4% to 5%; placed in July, up 6% to 7%; marketed in July, up 4% to 5%. Live and feeder futures seem geared to open on a mixed basis thanks to a combination of follow-through buying and long liquidation.

The cash hog trade should open on the defensive once again. Look for opening bids $1 to $2 lower than Thursday's closing range. With a Saturday kill of close to 132,000 head, the weekly slaughter should total about 2.33 million head, roughly 2.5% greater than last week. Lean futures are also set to begin with uneven price action linked to late-week, short-covering and commercial selling.

	BULL SIDE		BEAR SIDE
1)	Net beef export sales last week jumped to 16,600 metric tons, up 30% from the previous week and 22% from the prior four-week average. Increases were reported for Japan (4,600 MT), Egypt (3,200 MT), South Korea (2,600 MT), Mexico (1,700 MT), and Hong Kong (1,700 MT).	1)	Cattle buying caution continues to be stoked by eroding beef cutouts. Thursday, the choice and select box lost another $0.58 and $0.81, respectively.
2)	Live and feeder cattle futures opened significantly lower on Thursday but managed to close moderately higher. Many contracts settled 200 points or more above session lows. Could this be the beginning of bottom-building interest?	2)	For the week ending Aug. 12, cattle carcass weights kept growing: all cattle, 818 pounds, 2 lbs. bigger than the prior week and 6 lbs. lighter than 2016; steers, 882 lbs., 2 lbs. heavier than the week before and 5 lbs. below last year; heifers, 805lbs., 4 lbs. greater than a year earlier and only 3 lbs. lighter than 2016.
3)	Net pork export sales last week increased to 20,100 MT, up 10% from the previous week and 9% from the prior four-week average. Increases were reported for Mexico (4,000 MT), Japan (3,700 MT), South Korea (2,900 MT), Australia (2,800 MT), and Colombia (1,900 MT). At the same time, actual pork exports totaled 18,100 MT, up 5% from the previous week and 3% from the prior four-week average.	3)	The pork carcass value remained on the defensive Thursday. The belly primal lost another $6.41 with the rib primal in the red by $2.27.
4)	Deeply discounted lean hog futures may be wrong in failing to price better packer demand as two new plants open after the first of September and may need to bid for hog.	4)	Although the discount of October lean futures vis-a-vis spot country sales, the CME cash index is dropping like a stone (off nearly $5 in a week). With cash crashing like that, nearby futures are unlikely to rally anytime soon.

OTHER MARKET SENSITIVE NEWS

CATTLE:(AP) -- Amazon is moving swiftly to make big changes at Whole Foods, saying it plans to cut prices on bananas, eggs, salmon, beef and more as soon as it completes its $13.7 billion takeover next week.

Looking ahead, Amazon hopes to give Prime members special savings and other in-store benefits. The moves fit in Amazon's track record of keeping prices low to lock in customer loyalty.

It's an "opening salvo" in the grocery wars, said Neil Saunders, managing director of GlobalData Retail, and shares of other supermarkets fell on the news.

"Rivals should be under no illusion that they are now dealing with a competitor that is not afraid to damage profits and margins if it creates long-term gains," Saunders said in an analyst note.

Amazon's announcement that it plans to close the deal Monday comes a day after Whole Foods shareholders approved the deal and the Federal Trade Commission said it would not block the deal. Amazon will pay Whole Foods shareholders $42 per share, marking an 18 percent premium from its stock price the day before the tie-up was announced on June 16. They were at $41.98 on Thursday.

By buying Whole Foods, Amazon is taking a bold step into brick-and-mortar, with more than 460 stores and potentially very lucrative data about how shoppers behave offline. Whole Foods, meanwhile, had been under intense shareholder pressure to improve results and retain customers who have more choices about where to get natural foods. Discount chains like Lidl and Aldi have been expanding in the U.S. as well.

Whether Amazon will succeed in the fiercely competitive grocery segment is unclear, but customers are going to benefit from the attempt, said Charlie O'Shea, lead retail analyst at Moody's Investors Service.

"Amazon can come in and price items very low," he said. "Its shareholders are agnostic about profit, and seem more interested revenue and market share. That's a competitive advantage."

Rivals have been scrambling to catch up with the e-commerce giant. Walmart, which has the largest share of the U.S. grocery market, is expanding its grocery delivery service with ride-hailing service Uber and announced Wednesday that it will join forces with Google to let shoppers order goods by voice on Google devices.

But Walmart's shares were off 2 percent, and shares of other big grocery businesses fell more. The Kroger Co. dropped nearly 8 percent. Target, Costco and Supervalu all fell.

Among other Whole Foods items getting discounts Monday: avocados, tilapia, baby kale, apples and rotisserie chicken --- all organic, according to an Amazon press release.

The company also said certain Whole Foods products will be available through Amazon.com, AmazonFresh, Prime Pantry and Prime Now.

Earlier this month, Amazon sold $16 billion of bonds in order to pay for the purchase. Its shares were down 0.6 percent to $952.45 on Thursday.

HOGS: (biospectrumasia.com) -- A new research is opening the door to a future where pigs could become a source for heart, lungs and other desperately needed organs.

Researchers in the US have created gene-edited piglets that are free of viruses that could be harmful to humans. This has cleared one of the biggest hurdles preventing pig-to-human organ transplants.

It's an exciting development, Dr. Atul Humar, the medical director of the University Health Network's multi-organ transplant program, told CTV. If researchers can find ways to safely transplant pig heart, lungs, livers and other organs into humans, "it could really dramatically change" the organ donor shortage problem, says Dr. Humar, who was not involved in this study.

The immunological concerns involve difficulties with blood-clotting and issues of our immune systems' attempts to reject the organs.

But the larger issue has involved safety -- specifically disease transmission. Humar says pigs have several retroviruses that have embedded themselves into their genomes that are difficult to eliminate.

In all, pigs have more than 25 Pervs, or Porcine endogenous retroviruses, permanently embedded in their genomes (Humans have plenty of our own endogenous retroviruses in our genomes too, as do many other animals.)

The Pervs cause no harm to the pigs but if they are introduced into humans, they could transmit new difficult-to-treat diseases, in much the way that AIDS -- also caused by a retrovirus -- was introduced into humans.

But now, researchers say have found a way to use genetic engineering to deactivate these retroviruses.

Earlier this month, scientists published a report in the journal Science in which they described how they had been able to inactivate all 25 viruses in the pig genome using a gene-editing system called CRISPR--Cas9.

Egenesis, the Massachusetts--based biotechnology start-up that led the study, said their research" represents an important advance in addressing safety concerns about cross-species viral transmission."

Dr. Humar says it will likely be a few years before the research could lead to clinical trials in humans, and years more before pig organ transplants could even begin.

But he says if the research goes well, pigs could become a new exciting source of donor hearts, lungs, kidneys, livers and more. That's in part because pigs are plentiful and would only need to be a few months old before their organs would be ready for transplant.

"It's also easy to grow pigs, to breed them, in large numbers to potentially have enough organs to meet that demand," Dr. Humar said.

He notes there are of course ethical issues with raising pigs simply for their organs. But he points out we already slaughter more a million pigs a year simply for their meat. So growing a few thousand more in sterile conditions for their organs is not that much different.

There is "definitely mixed reactions to the idea" of using pig parts in humans, he said.

"But we have so many people on our waiting lists who are so sick and who can wait for years for a suitable human donor and often pass away waiting. So that puts it in a different ethical light," he said.

John Harrington can be reached at feelofthemarket@yahoo.com

Follow John Harrington on Twitter @feelofthemarket

(BAS)

Copyright 2017 DTN/The Progressive Farmer. All rights reserved.