DTN Early Word Opening Livestock
Cattle Futures Staged for Mixed Opening as Traders Wait for Late-Week Cash Verdict
GENERAL COMMENTS:
Cattle: Steady-$2 HR Futures: Mixed Live Equiv: $139.78 - .24*
Hogs: Steady/Firm Futures: 50-100 HR Lean Equiv: $ 73.29 + .70 **
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue
The cash cattle trade will develop sometime Friday between late morning and late afternoon. Look for opening bids around $180 to $183 on a dressed basis in the North and $115 to $117 on a live basis in the South. Asking prices are likely to be renewed in the neighborhood of $187 plus in the North and $120 plus in the South. Live and feeder futures seem set to open with uneven price action with nearbys probably holding up better than their deferred counterparts.
Hog country should open Friday with steady/firm bids. Given the aggressive chain speed this week (including plans for a Saturday kill as large as 207,000), the weekly slaughter total will no doubt have little trouble chinning 2.6 million head. Lean futures seem geared to open higher, supported by follow-through buying and ongoing African swine fever worries.
| BULL SIDE | BEAR SIDE | ||
| 1) | For the week ended Nov. 17, steer carcass weights dropped to 900 pounds, 4 lbs lighter than †he prior week. Scale tickets seem close to inking a seasonal top. | 1) | December live cattle tends to decline in early December and then rally in mid-December, before dropping lower into the end of the year. Most live issues remain well below their early October highs. February will run into overhead resistance in the $122 to $123 area, and then again toward the contract highs near $124. |
| 2) | The continuing spread of African swine fever through China's pig population has the potential to reshape global beef markets. Given China is already an important and growing importer of beef, depending on how pork production and prices develop, there could be increased demand from China for beef imports over the coming months. | 2) | Most of live cattle contracts continue to hover near their respective 40-day moving averages and in the lower end of the trading ranges that had been in place from mid-September into late October. While rebounding from mid-November lows, the market is nearing some overhead technical resistance areas. |
| 3) | China may soon buy pork for its state reserves to support farmers struggling to sell their pigs amid an African swine fever epidemic that has ravaged the nation's hog herd, according to people who attended a government meeting this week. | 3) | The forward lean hog futures curve is providing a bleak outlook for a positive margin hedging situation for the remainder of the fall, and even start of 2019. Cash hog markets have been below breakevens for longer than expected and the futures markets have attempted to find a premium-to-cash forecast but continually fail to maintain any bullish sentiment. |
| 4) | Pork export sales last week were large to Mexico and Japan, as well as China. Indeed, China was the third largest buyer of U.S. pork last week. This tends to confirm that the (African swine fever) situation in China is far worse than what has been reported. | 4) | Although the possibility of "good" news coming out of the G-20 summit regarding trade discussions between the U.S. and China has sparked some optimism in lean hog futures, the track record of trade negotiations over the last year has been anything but positive and constructive. |
CATTLE: (The New Daily) -- In the relentless contest of "world's biggest animals", a 194cm-tall [6.36 feet] Aussie bovine has dramatically raised the steaks.
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Residing on a property at Myalup, Western Australia, the seven-year-old Holstein Friesian steer is more than twice the size of the other cows in his herd.
He was first discovered by news outlets in October, but the beast's udderly ridiculous stature only began to go viral earlier this week when the story caught international attention.
Since then, dozens of sources have been looking for inventive ways to fit the discovery into their regular coverage -- some attempts more successful than udders. Every major news outlet around the globe seems to have become enamoured with the steer and have been mooved teport on it, from the Daily Mirror to New York Magazine.
No bull, owner Geoff Pearson told Perth Now that Knickers' impressive stature should save him from becoming mince meat -- as he is simply too big for the local abattoir.
"It was too heavy. I wouldn't be able to put it through a processing facility," he told Perth Now.
"So I think it will just live happily ever after."
Naturally, cow fans on social media began milking Knickers for all he was worth.
HOGS: (Oklahoma Farm Report) -- NPPC Chief Vet Liz Wagstrom Says Threat of Foreign Animal Disease Entering the US is As African Swine Fever becomes increasingly more concerning for the US and global pork industry, with the recent outbreak that has nearly fully saturated China's pork infrastructure, Radio Oklahoma Ag Network Associate Farm Director Carson Horn sat down with Dr. Liz Wagstrom, chief veterinarian for the National Pork Producers Council, to talk about the seriousness of the threat this disease poses to the US pork industry.
According to Wagstrom, the first reported outbreak of ASF in China occurred sometime around the first of August and has since spread to nearly every province of the Asian country. She says the disease has slowly worked its way across Europe with cases showing up sporadically over the last decade.
"The concern we have as it's gotten into China, is that we get a lot of ingredients and supplies with a lot of international travel back and forth from China," Wagstrom said. "So, we're working really hard just to try to keep it out of the United States. We've never had it and we really want to keep it that way.
Citing the investigations that veterinarian researchers on the ground in China have conducted, the contagion was probably in the country a couple weeks before it was actually identified. The fact that it went that long without being notified gave the disease ample opportunity to spread rapidly given the extensive movement of livestock there. Wagstrom says the disease has been traced back to its source at a packing facility where patient zero likely exposed thousands of hogs to the disease. She suspects China's common practice of "swill feeding" and its culture of selling off sick animals as soon as they are identified, probably did not help the situation.
"There is a lot of things they're doing over there that could have contributed to its spread," she remarked. "So, we're working very closely with both the USDA and customs and border protection. They're targeting flights coming from ASF positive countries for illegal meat or citrus products as well as manifest cargos. We're also working with USDA to try to make sure that we could identify cases early - that we would have a surveillance program.
"The feed and pork industries are working closely together as well to try to (monitor) feed ingredients coming from China that could potentially be contaminated."
John Harrington can be reached at harringtonsfotm@gmail.com
Follow John Harrington on Twitter @feelofthemarket
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