DTN Early Word Opening Livestock

 
Cattle: Steady-$1 HR Futures: Mixed Live Equiv: $140.76 + .54* 
Hogs: Steady-$1 HR Futures: Mixed Lean Equiv: $ 73.07 +1.29 **
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue

GENERAL COMMENTS:

Expect Tuesday's cash activity to be typically slow and poorly defined. More specifically, don't look for definite bids and asking prices for several more days, probably not until Thursday or Friday. Live and feeder futures should begin with mixed price action as opinions remain unsettled about late-week feedlot business.

Hog buyers are anticipated to resume work Tuesday with steady/firm bids. Follow-through selling should be checked by firming carcass value to some extent. Lean futures seem geared to open mixed tied to long liquidation on one hand and stronger carcass values on the other.

	BULL SIDE		BEAR SIDE
1)	Beef cutouts opened the week with decent gains as wholesalers and retailers moved beyond the seasonal turkey focus. Early-week box movement was described as "moderate to fairly good."	1)	New showlists distributed in feedlot country Monday were generally larger than the prior week with only Kansas offering tighter fed supplies.
2)	For the week ended Nov. 20, noncommercials reversed the downward trend of the previous six weeks, adding mostly from the long side to increase their net-long position in live cattle futures by 2,900 to a total of 70,500.	2)	The structure of the live cattle futures market provides just modest support at best to producer efforts to resist lower bids from the packers. December becomes the spot contract next week.
3)	The pork carcass value exploded higher on Monday (i.e., up $1.26), especially supported by a $7.98 jump in the belly primal.	3)	Hog slaughter levels are expected to resume this week at the upper levels of capabilities with possibly a new record level in a few weeks. Such late-year tonnage will clearly challenge the strength of early-winter pork demand.
4)	China will adjust its rules on controlling the spread of African swine fever to keep pork supplies stable, said an official on Friday, even as the country reported the first cases of the disease to be discovered in its capital. The highly contagious disease was found on two farms in a southwestern district of sprawling Beijing. Furthermore, China's agriculture ministry confirmed a new African swine fever outbreak in Hubei province on Monday.	4)	On the other hand, the severe weather conditions across much of the Midwest left some plants scrambling to get workers and live inventory as the workweek began. Now is not a good time to backup market hogs.

OTHER MARKET SENSITIVE NEWS

CATTLE: (Bloomberg) -- China, a nation of pork lovers, has developed an appetite for overseas beef that could see it buying record amounts this year.

The biggest consumer of global commodities boosted beef imports by almost 80 percent in October from a year earlier to 92,435 tons, customs data showed. That brings this year's shipments to more than 830,000 tons, on pace for an annual record. Meanwhile, pork purchases fell 2.2 percent last month, with beef imports eclipsing pork for a third month.

"Beef imports this year are set for a record high as more Chinese shift to high-quality meat," said Zhu Cong, a researcher with the Chinese Academy of Agricultural Sciences in Beijing. "The country has opened its market to more countries."

Overseas suppliers may be unable to meet China's robust appetite for beef as constraints on the expansion of domestic herds limit home-grown production, said Pan Chenjun, analyst with Rabobank International in Hong Kong.

HOGS: (AP) -- Chinese pig farmers, already reeling from rising feed costs in Beijing's tariff fight with U.S. President Donald Trump, face a new blow from an outbreak of African swine fever that has sent an economic shock wave through the countryside.

First detected in August, the disease has killed 1 million pigs, prompting authorities to restrict shipments of most of China's 700 million swine, even though nearly all are still healthy. That has disrupted supplies of pork, China's staple meat, to big cities while prices collapsed in areas with an oversupply of pigs that farmers are barred from shipping to other provinces.

"I can only manage to break even at the current price," said a breeder on the outskirts of Shenyang, northeast of Beijing, where the first case was reported Aug. 3. She said she was rearing about 100 pigs and would give only her surname, Yan.

"Unless we see a higher price for pigs, all my work this year would have gone for nothing," Yan said.

African swine fever doesn't affect humans but is highly contagious in pigs, making it a serious threat to farm areas.

On Friday, the first cases were reported in Beijing, the capital. Authorities said 86 pigs at two farms in suburban Fangshan district died.

Also Friday, Xiamen Airlines, a midsize Chinese carrier, announced it was suspending use of pork on in-flight meals.

The outbreak adds to a swarm of challenges for Chinese leaders as they grapple with Trump over Beijing's technology policy and try to shore up cooling growth in the world's second-largest economy.

The cost of raising pigs spiked after Beijing retaliated for Trump's tariff increases on Chinese goods by imposing 25 percent duties on imported U.S. soybeans used as animal feed.

American farmers supplied about one-third of China's imports of 96 million tons of soybeans last year, while its own farms produce about 15 million tons a year.

Soy prices have risen by as much as 4 percent and 5 percent per month since then in some areas.

Importers are buying more soy from Brazil and Argentina, the other major exporters. Authorities have encouraged breeders to look at other protein sources such as canola.

Since the first swine fever case in August, sick animals have been found in areas from Jilin province in the northeast to Yunnan on China's southern border with Vietnam. Authorities responded by banning shipments of all pigs from any province with one case. Authorities have found 73 outbreaks in domestic pigs and one infected wild boar in 47 cities in 20 provinces, according to an Agriculture Ministry official, Feng Zhongwu. "The task of prevention and control is still very arduous and the work is extremely urgent," Feng said at a news conference Friday. It wasn't clear how the virus reached China but it was found to be genetically similar to versions in Russia, Poland and the country of Georgia, said another official, Huang Bao. Huang said genetic testing showed the virus in the wild boar in Jilin province was unrelated to that in domesticated pigs.

John Harrington can be reached at harringtonsfotm@gmail.com

Follow John Harrington on Twitter @feelofthemarket

(BAS)

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