TOP STORIES 



  Meat Stockpiles Dropped After Covid-19 Sickened Plant Workers -- Market Talk 


  1610 ET - Supplies of pork and beef in US cold storage facilities as of May 31 were down 18% from April and 13% lower than last year's level, the USDA says, showing how the coronavirus' disruption of US meatpacking plants cut into domestic meat stockpiles. Covid-19 infected thousands of meatpacking workers and killed dozens, according to labor union officials, forcing companies like Tyson Foods, JBS USA, Smithfield Foods and Cargill to temporarily close pork and beef plants across the country. Frozen poultry supplies in US cold storage facilities, which house products prior to shipment to domestic restaurants and stores as well as export markets, were down 5% from April and 4% versus the same time last year. (jacob.bunge@wsj.com; @jacobbunge) 


  China Halts Some Tyson Chicken Exports Over Covid-19(June 21) 


  Chinese authorities suspended chicken imports from a Tyson Foods Inc. facility due to what Chinese officials said were Covid-19 infections among the plant's employees. 


  The suspension issued Sunday covered products that have arrived in China or are about to arrive there, according to China's General Administration of Customs. The agency's order didn't specify how much chicken the Tyson facility supplied, or other details about the products. 


  STORIES OF INTEREST 


  Sell Kraft Heinz Stock, Says Goldman. Why Eggs Make Post a Buy. -- Barrons.com 


  Goldman Sachs analyst Jason English is looking beyond the boost packaged-food stocks have gotten from the Covid-19 pandemic. He cut his rating on Kraft Heinz shares to Sell, while upgrading Post to Buy. 


  The fact that more food is being consumed at home -- and less in restaurants -- has helped sales in the sector to increase, but English doesn't think it will last. "Industry growth will become scarce in 2021 as many companies cede recent sales gains, either due to category contraction or market share erosion to private label," wrote the analyst in a Monday research report. 


  Walmart Upgraded On Revenue Growth From New Shoppers Gained During Coronavirus Pandemic -- MarketWatch 


  Walmart Inc. (WMT) was upgraded to buy from neutral at UBS as analysts expect the retail giant will continue to see revenue gains from the new customers it acquired during the coronavirus pandemic. UBS raised its price target to $135 from $130. The research group's proprietary data shows that it is a primary shopping destination, and in the coming years, analysts expect Walmart will roll out automation technologies "to drive game-changing efficiency," UBS said. "Our thesis is that Walmart is entering an era of amplified earnings growth driven by an enhanced productivity loop, increased  e-commerce scale, and accelerated technology deployment." 


  FUTURES MARKETS 


  Livestock Finish Lower -- Market Talk 


  15:34 ET - Livestock futures on the CME finish lower, with August lean hog futures down 3.2% at 51.1 cents a pound, and August live cattle futures of 0.3% at 95.125c. For hogs, a continued sluggish demand has caused supplies to build up. Meanwhile, Friday's cattle on feed report from the USDA showed more cattle on feed and higher cattle placements, meaning despite Covid-19 closures of meatpacking plants, cattle production is coming back online quickly. "The June cattle on feed report surprised trade with higher cattle numbers," Karl Setzer of AgriVisor says. (kirk.maltais@wsj.com; @kirkmaltais) 


   CASH MARKETS 

 
Estimated U.S. Pork Packer Margin Index - Jun 22 
 
Source: USDA, based on Wall Street Journal calculations 
All figures are on a per-head basis. 
 
Date     Standard Margin       Estimated margin 
         Operating Index         at vertically - 
                             integrated operations 
 
Jun 22       +$ 73.44            +$  5.34 
Jun 19       +$ 71.21            +$  4.22 
Jun 18       +$ 70.86            +$  4.85 
 
* Based on Iowa State University's latest estimated cost of production. 
A positive number indicates a processing margin above the cost of 
production of the animals. 
 
Beef-O-Meter 
This report compares the USDA's latest beef carcass composite 
values as a percentage of their respective year-ago prices. 
 
                                  Beef 
          For Today              Choice   97.4 
      (Percent of Year-Ago)      Select  102.4 
 
USDA Boxed Beef, Pork Reports 


  Wholesale choice-grade beef prices Monday rose 34 cents per hundred pounds, to $214.06, according to the USDA. Select-grade prices rose 39 cents per hundred pounds, to $204.30. The total load count was 154. Wholesale pork prices rose 52 cents, to $64.22 a hundred pounds, based on Omaha, Neb., price quotes.