Cattle: Steady w/Tues Futures: 100-200 HR Live Equiv $136.80 + $1.08*
Hogs: Steady Futures: 50-100 LR Lean Equiv $ 86.09 -$1.40**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
Cattle buyers wasted little time this week in completing procurement chores before the Thanksgiving break. Trading turned at least moderate in most areas on Tuesday. While early biz in the South were $1 lower than last week (i.e., $119), late sales in the North looked nearly $1 higher. We could see clean-up action through the day, our guess in that cash activity is essentially done for the week. Live and feeder futures should open substantially higher, supported by follow-through buying and cash premiums.
The cash hog trade should open with generally steady bids. Saturday kill plans are estimated to total close to 345,000 head. Lean futures seem set to begin under pressure tied to residual selling and sharply lower carcass value.
|BULL SIDE||BEAR SIDE|
|1)||Cattle futures closed sharply higher on Tuesday, removing much of the bearish sting from Monday's post-on feed report sell-off. Feb and April renewed enough buying interest to close back above their 40-day moving averages.||1)||Yesterday's short-covering rally in cattle futures changed little in the technical picture. With this month's market decline, the short-term trend has shifted to neutral, while the longer-term trend in the continuous chart continues to point downward.|
|2)||Northern cattle buyers steadily firmed bids through yesterday's session, and by the end of the day top sales (i.e., 120.50 live) were nearly $1 higher than last week's weighted average basis Nebraska.||2)||Judging by the especially large surge in national feed receipts seen over the last four to six weeks, we can only assume that November placement activity continues to run substantially above the late fall of 2016.|
|3)||Given hard evidence that hog slaughter through the first half of the fourth quarter was smaller that the September 1 inventory implies, it may be reasonable to assume the same friendly reality will persist through the second half of the quarter.||3)||Easy come, easy go. The pork cut-out closed sharply lower on Tuesday, taking back all on Monday's gain and then some. While bellies continue to shoot higher, bacon sizzle wasn't enough to off-set softening demand for fresh cuts and hams.|
|4)||Despite yesterday's pull-back in lean futures, the long-term market trend remains positive as does the structure of the market||4)||Lean hog futures stumbled badly on Tuesday, pretty much erasing the price progress scored on Monday. Spooked by the potential bearish combination of late year tonnage and faltering demand, spot December acts like it wants to lead cash lower.|
CATTLE: (Bloomberg Finance) -- Russia banned pork from Brazil at a time that imports from the Latin American country, the biggest foreign supplier of the meat, have been rising and as the Kremlin has sought to encourage its own farm industry.
The government barred Brazilian pork and beef imports from Dec. 1, saying testing had found the muscle growth stimulant ractopamine, which is prohibited in Russia. A Brazilian lobby for the industry said the feed additive isn't used in production of the exported meat, which adheres to Russian rules.
Total imports of pork to Russia are rising for the first year in four and may reach 300,000 metric tons, according to Russia's National Pig Farmers Union. Supply from Brazil, which make up 90 percent of the shipments, are competing with local producers on price, the union said.
"Brazil was left alone as a major supplier," Yury Kovalev, head of the union, said in Moscow. "They were reminded that we have certain requirements."
Miratorg Agribusiness Holding and Ros Agro Plc are among Russian producers that stand to gain from import curbs. Miratorg's President Viktor Linnik told the RBC newspaper last month that Brazil sells almost $1 billion of meat to Russia every year. As of Nov. 12, pork imports had risen about 13 percent from the same period a year earlier, the Agriculture Ministry said on its website, citing customs data.
Russia imported 230,395 tons of Brazilian pork this year through October, about 40 percent of the Latin American country's total shipments, figures from Brazil's Agriculture Ministry show. It also imported 131,083 tons of beef, about 11 percent of the total.
JBS SA, Brazil's largest meat exporter, and BRF SA, its largest chicken and pork exporter, declined to comment on the ban. Brazil beef exporter Minerva SA will maintain shipments to Russia through units in Paraguay, Uruguay and Argentina, it said in a statement. Marfrig Global Foods SA said Russia makes up just 3 percent of its Brazil beef exports.
"The industry is confident about the characteristics of its product, and ensures that shipped pork production does not use ractopamine," the Brazilian Animal Protein Association lobby said in a statement.
Russia, the world's biggest wheat exporter, is seeking to start sales of grain, vegetable oil and fish to Brazil, Russian Agriculture Minister Alexander Tkachev said last month when he met his counterpart Blairo Maggi last month. Brazil sells more than it buys in the trade, he said. Brazil is seeking to expand sales of beef, pork and soybeans to Russia, Maggi said.
HOGS: (NFU) -- Farmers and ranchers take home just 11.4 cents from every dollar that consumers spend on their Thanksgiving dinner meals, according to the annual Thanksgiving edition of the National Farmers Union (NFU) Farmer's Share publication. The popular Thanksgiving Farmer's Share compares the retail food price of traditional holiday dinner items to the amount the farmer receives for each item they grow or raise.
"This holiday season, it's important for us to take time to recognize and thank the family farmers and ranchers who provide our Thanksgiving meals," said Rob Larew, NFU's Senior Vice President for Public Policy and Communications. "If you don't live on a farm or work in agriculture, you probably don't realize the tremendous difference between the price you pay for food at the grocery store and the prices farmers end up receiving for these products. While consumer holiday food costs have declined recently, incomes for American farm and ranch families have dropped precipitously. We're in the midst of the worst farm economic downturn in 30-40 years, and we're hopeful these numbers can help illustrate that fact to the general public."
On average, farmers receive 17.4 cents of every food dollar consumers spend, while more than 80 percent of food costs cover marketing, processing, wholesaling, distribution and retailing. For the 15 items NFU tracks for the Thanksgiving version, farmers received just 11.4 cents of the retail food dollar.
Turkey growers, who raise the staple Thanksgiving dish, receive just 5 cents per pound retailing at $1.69. Wheat farmers averaged a meager 6 cents on 12 dinner rolls that retail for $3.49. And dairy producers received only $1.47 from a $4.49 gallon of fat free milk.
Thanksgiving presents an opportunity to raise awareness about food production, including misconceptions about food costs, Larew explained. "Farmers and ranchers play the most valuable role in actually producing the food that is served at holiday dinners, yet they make just pennies on the dollar for their products."
The Farmers' Share is based on calculations derived from the monthly Agriculture Prices report produced by the U.S. Department of Agriculture's National Agricultural Statistics Service, and compared to price points of common grocery food items at Safeway supermarket. The figure farmer's share of retail turkey sales is reported by the Contract Poultry Growers Association of the Virginias, as national data on farm prices for turkey does not reflect the amount turkey growers receive.
John Harrington can be reached at firstname.lastname@example.org
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