DTN Early Word Opening Livestock
Meat Futures Staged to Open Moderately Lower on Thursday
GENERAL COMMENTS:
Cattle: Steady Futures: Mixed Live Equiv: $142.43 - .94*
Hogs: Steady-$1 LR Futures: 50-100 LR Lean Equiv: $ 77.70 -1.33**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
Once again, it appears that the cash cattle trade will not fully develop until the tail end of the week. Look for opening bids around $180 dressed in the North and $113 in the South. Asking prices should be restated close to $182 to $185 in the North and $118 in the South. Live and feeder futures are expected to open moderately lower Thursday as traders cautiously await reliable signs of late-week cash potential.
Challenged by record hog numbers and fears of inadequate pork demand, buyers will resume procurement chores with bids steady to $1 lower. Needless to say, packers have attractive leverage and margins. This helps explain ambitious Saturday kill plans that should approach 250,000 head. Lean futures seem likely to open under pressure as well, curtailed by residual selling and shaky cash optimism.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
| BULL SIDE | BEAR SIDE | ||
| 1) | Nearby December live cattle was the only contract showing a gain of 67 cents on Wednesday, closing a little over a dollar above the one-day moving average. The front-end contract is near par with last week's cash cattle market, not far from "average" for the second week of November. | 1) | Midweek wholesale beef demand seemed quite discouraging with cutouts quoted significantly lower and box movement described as no better than light. |
| 2) | China's agriculture ministry said on Wednesday it had confirmed a new outbreak of African swine fever in the central province of Hubei. The disease killed four out of 821 pigs in Luotian county, the Ministry of Agriculture and Rural Affairs said on its website. | 2) | Recent declines in December live cattle open interest and increases in open interest in the 2019 contracts have been indicative of heading into the "official" index roll, when index funds roll December longs into mostly February and April. |
| 3) | For the week ending Nov. 5, U.S. hatcheries set 215 million eggs in incubators down slightly from a year. At the same time, broiler growers in the placed 174 million chicks for meat production, down 1% from a year ago. | 3) | The pork carcass value got clobbered on Wednesday with eroding demand noted in the loin primal as well as ham and belly cuts. |
| 4) | Although there's little reason to doubt that fourth quarter pork production will finish at record levels, one could certainly argue that the extreme board discount represents an unjustified exaggeration. | 4) | For the week ending Nov. 3, Iowa barrows and gilts averaged 283.5 pounds, .1 lb heavier than the previous week and but .7 lb lighter than 2017. |
CATTLE: (NCBA) -- The announcement that R-CALF will be allowed to expand its activist-funded crusade against state beef councils is a disappointment to countless beef producers and NCBA members across America. The phony allegations being perpetuated by R-CALF and its activist legal partners are without merit and only serve to divide beef producers and distract beef councils from the important work of building demand for our products.
"The simple fact is that regular audits of the beef checkoff and NCBA have found both to be compliant with the laws governing the checkoff. Two audits conducted by USDA's Office of the Inspector General have also come back clean. R-CALF's accusations to the contrary are false," said Kendal Frazier, NCBA Chief Executive Officer. R-CALF has become nothing more than a front group for activists seeking to divide the industry, lessen beef demand and drive producers out of business."
Accusations that dollars invested in the Federation of State Beef Councils are being misused are equally false. NCBA has a longstanding commitment to the beef checkoff and the state beef councils, whose collections and demand-building work pre-date the federal checkoff. NCBA is firm in its commitment to defend both the checkoff and state beef councils against outside attacks. The volunteer cattlemen and cattlewomen who serve on state beef council boards are committed to improving the beef business and demand for our products and they do not deserve the attacks being leveled by these activist groups.
It has been repeatedly demonstrated that these attacks by R-CALF are being aided by allies at the Humane Society of the United States, Food and Water Watch, Public Justice and other activist organizations that stand against cattlemen and women. These groups know that beef demand is increasing in the United States and abroad, in part due to work funded by the checkoff. These achievements make the beef checkoff and other agriculture industry self-help mechanisms a target for organizations and individuals driving a vegetarian agenda.
"It's unfortunate that R-CALF has chosen to become a puppet in the war being waged by animal rights activists and the vegetarians seeking to drive beef producers out of business. Let's be clear, though, the groups aligning with R-CALF are choosing a future with shrinking beef demand, less opportunity and more government involvement," said Frazier. "That's not the future NCBA members choose, so we will defend the beef checkoff and cattle producers against these attacks."
HOGS: (FDA) -- "We're committed to supporting the development of novel animal drug products that are safe and effective, and we're encouraged to see innovations that provide additional benefits to animals, people and the environment," said Steven M. Solomon, M.P.H., D.V.M., director of the FDA's Center for Veterinary Medicine. "Thursday we're announcing the approval of the first animal drug that reduces ammonia gas emissions from an animal or its waste. These ammonia gasses can come from many sources and can affect the health of people, animals and the environment. Novel animal drug products such as these also support One Health approaches to public health."
The U.S. Food and Drug Administration announced Thursday the approval of Experior (lubabegron Type A medicated article), the first animal drug that when fed to beef cattle under specific conditions results in less ammonia gas released as a by-product of their waste.
Ammonia gas emissions can come from many sources, including the manure of beef cattle. Ammonia gas emissions are a concern because they have been implicated in atmospheric haze and noxious odors. High concentrations of ammonia can cause irritation of the eyes, nose and throat in both humans and animals. Additionally, ammonia gases can contribute to a process called eutrophication, in which bodies of water become enriched with excess nutrients, especially nitrogen and phosphorous. This nutrient enrichment in the water causes algae blooms, which block sunlight to aquatic plants, and eventually results in the death of aquatic animals due to a lack of oxygen in the water. Studies of Experior indicated that the product partially reduces ammonia gas emissions from manure from an individual animal or a pen of animals in semi-controlled conditions in enclosed housing. However, the studies did not measure ammonia gas emissions on a herd or farm scale.
Multiple studies showed that Experior is safe to feed to beef cattle and that meat from cattle treated with Experior is safe for people to eat. More than 4,000 cattle were studied, and the results showed a low incidence of health issues overall, and no difference between control animals and those receiving Experior. In a simultaneous yet separate review, the Veterinary Drugs Directorate (VDD) of Health Canada has also reviewed Experior. This underscores the continued collaboration between the FDA's Center for Veterinary Medicine and VDD, aimed at facilitating access to veterinary drugs across both countries.
The One Health Initiative recognizes that the health of people, animals, and the environment is intertwined. The Initiative advocates for a comprehensive approach to health and environmental problems and aims to promote, improve, and defend the health and well-being of all species.
The FDA granted approval of Experior to Elanco.
The FDA, an agency within the U.S. Department of Health and Human Services, protects the public health by assuring the safety, effectiveness, and security of human and veterinary drugs, vaccines and other biological products for human use, and medical devices. The agency also is responsible for the safety and security of our nation's food supply, cosmetics, dietary supplements, products that give off electronic radiation, and for regulating tobacco products.
John Harrington can be reached at harringtonsfotm@gmail.com
Follow him on Twitter @feelofthemarket
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