Pilgrim's Pride Could Soar on Chicken Demand, Better Margins -- Market Talk
13:05 ET - BMO says it's no longer a question of if, but when, China's African swine fever epidemic will lift the US chicken market, and sees the effect mostly in 2020. Despite US/China trade tension, BMO sees protein demand, particularly in Europe, causing the US to backfill other countries. Analysts also point to a current beef production shortage in the wake of Tyson Foods' beef plant fire, which should further support chicken prices. Besides stronger market fundamentals, BMO says Pilgrim's Pride management is focused on increasing margins, which should become "more appreciated (and contribute to higher valuation) by the market." BMO lifts Pilgrim's Pride to outperform from market perform and its price target to $36 from $31. Shares gain 5.2% to $30.68. (email@example.com)
STORIES OF INTEREST
Corn, Wheat Prices Fall, While Crop Growth Lags
Corn for December delivery fell 1.5% to $3.68 3/4 a bushel on the Chicago Board of Trade on Tuesday, as rain hit some growing regions in the Midwest.
Soybeans for November delivery rose 0.2% to $8.68 1/4 a bushel.
Wheat for December delivery fell 1.2% to $4.66 1/2 a bushel.
Insects Not a Big Issue for Young Crops -- Market Talk
09:27 ET - Insect infestations have not been a big issue for corn crops in Indiana and Ohio, says Brian Grete of Pro Farmer. "Insect pressures [arent] heavy at all," says Grete, who says that crops are looking young, roughly a month behind from normal schedule. The Pro Farmer Crop Tour is running through Thursday. (firstname.lastname@example.org; @kirkmaltais)
Illinois Corn Yield Drops by Roughly 30 Bushels an Acre -- Market Talk
15:58 ET - Illinois corn yields appear to be roughly 30 bushels per acre lighter than last year, according to preliminary data from Tuesday's leg of the Pro Farmer crop tour, which traveled from Indiana into Illinois. Yields are roughly averaging 160 bushels per acre, down from Pro Farmer's average of 190 bushels in comparable Illinois districts last year. Pro Farmer will release its official data for the day tonight. (email@example.com; @kirkmaltais)
Livestock Rally Continues; Chinese Demand Drives Hogs -- Market Talk
16:52 ET - Lean-hog futures on CME keep rallying, finishing 1.5% higher at 64.975 cents a pound. African swine fever and China's need for pork in the wake of the disease is fueling this move higher. "Chinese pork prices continue to skyrocket and we are at extremely competitive levels globally," says Craig VanDyke of Top Third Ag Marketing. Meanwhile, live cattle also gains 1.8%, finishing at $1 per pound. It's the first time in nearly a week that cattle has traded at the $1 level. (firstname.lastname@example.org; @kirkmaltais)
Estimated U.S. Pork Packer Margin Index - Aug 20
This report reflects U.S. pork packer processing margins. The margin indices
are calculated using current cash hog or carcass values and wholesale pork
cutout values and may not reflect actual margins at the plants. These
estimates reflect the general health of the industry and are not meant to
be indicative of any particular company or plant.
Source: USDA, based on Wall Street Journal calculations
All figures are on a per-head basis.
Date Standard Margin Estimated margin
Operating Index at vertically -
Aug 20 +$ 19.89 +$ 46.63
Aug 19 +$ 20.40 +$ 49.21
Aug 16 +$ 22.90 +$ 52.63
* 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.
This report compares the USDA's latest beef carcass composite
values as a percentage of their respective year-ago prices.
For Today Choice 113.0
(Percent of Year-Ago) Select 105.9
USDA Boxed Beef, Pork Reports
Wholesale choice-grade beef prices Tuesday rose $2.57 per hundred pounds, to $241.70, according to the USDA. Select-grade prices fell 25 cents per hundred pounds, to $214.27. The total load count was 94. Wholesale pork prices fell $1.20, to $82.09 a hundred pounds, based on Omaha, Neb., price quotes.