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LIVESTOCK HIGHLIGHTS: Top Stories of the Day

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05/28/2020 | 05:58pm EDT

TOP STORIES

 

Beef, Pork Processors Unlikely To Return To Normal Soon -- Market Talk

12:27 ET - Sanderson Farms' CEO says beef and pork processors aren't likely to return to previous levels of production anytime soon. "I think they've made some progress but I kind of believe it's going to be a while," Joe Sanderson says on an investor call covering quarterly results. Prices for those proteins remain elevated at grocery stores, he says, and Sanderson is shifting production to meet stronger demand from retailers. Amid that changeover, the chicken producer expects to produce 5.9% fewer pounds in F3Q than it projected earlier this year. Shares fall 1.6% to $137.99. (micah.maidenberg@wsj.com; @MicahMaidenberg)

 

09:28 ET - Poultry producer Sanderson Farms says that it expects feed grain prices in 2020 to stay lower than they were in 2019 for the rest of the year. "There are ample supplies of both corn and soybeans worldwide, and the pandemic has had a material impact on demand for feed grain, especially corn used for ethanol," the company says in its earnings release. Sanderson cites the USDA crop progress reports as evidence of this--with corn planting progress at 88%, up from 55% at the same time last year. CBOT futures are mixed this morning, with corn up 0.4%, wheat gaining 0.5%, and soybeans down 0.3%. (kirk.maltais@wsj.com; @kirkmaltais)

 

STORIES OF INTEREST

 

Chicken Giant Sees Slow Restaurant Recovery -- Market Talk

12:25 ET - Sanderson Farms CEO Joe Sanderson doesn't expect a rapid rebound in restaurant traffic or sales, which represent around 60% of the poultry processor's sales. Sanderson says on his company's quarterly call that only 50% of restaurants are now open, and just 46% of consumers want to go out to eat right now. Following the 2008-2009 economic crisis, Sanderson says, it took nearly a decade for restaurant traffic to fully recover. Sanderson is considering switching over one of its foodservice-oriented plants to supply to supermarkets, he says. (jacob.bunge@wsj.com; @jacobbunge)

 

Order Sizes Growing for Uber Eats -- Market Talk

09:38 ET - Uber Eats says its food delivery business continues to grow in May due to the pandemic, including larger order sizes. "People are home more, ordering for their families," Pierre Dimitri Gore-Coty, head of Uber Technologies' Uber Eats division says at an investor conference. Average basket sizes of orders in the US grew 14% in April compared to February, he says. The company is looking to add more breakfast and lunch options and cater to more families as it seeks to boost its Eats business. (heather.haddon@wsj.com; @heatherhaddon)

 

FUTURES MARKETS

 

Hog Futures Close Day Nearly Limit Down -- Market Talk

15:57 ET - Lean hog futures on the CME finish the day off 6.2%, or 3.65 cents per pound--close to the 3.75 cents per pound limit for the July contract. Hogs closed at 55.65 cents per pound, making it the lowest the contract has ended since April 30. The main drivers for the hog drop includes the big decline in pork cutout prices, as well as tensions between the US and China shaking trader hopes that China will continue to buy greater amounts of pork exports from the US this year. "A decline in wholesale values applied pressure to livestock futures today as well, even though the spread between futures and cash remains historically wide," says Karl Setzer of AgriVisor. Cattle futures finish trading up 0.5% to $1.01175 per pound. (kirk.maltais@wsj.com; @kirkmaltais)

 

CASH MARKETS

 
Estimated U.S. Pork Packer Margin Index - May 28 
 
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 
 
May 28       +$102.96            +$ 57.26 
May 27       +$99.03             +$ 56.17 
May 26       +$116.51            +$ 74.89 
 
* 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  165.3 
      (Percent of Year-Ago)     Select  163.9 
 
USDA Boxed Beef, Pork Reports 

Wholesale choice-grade beef prices Thursday fell $8.21 per hundred pounds, to $369.56, according to the USDA. Select-grade prices fell $6.11 per hundred pounds, to $344.09. The total load count was 149. Wholesale pork prices ros3 51 cents, to $88.37 a hundred pounds, based on Omaha, Neb., price quotes.

Stocks mentioned in the article
ChangeLast1st jan.
CBOT ETHANOL FUTURE (EH) - CBR (FLOOR)/C1 0.83% 1.09 End-of-day quote.-20.73%
CORN FUTURES (C) - CBR (FLOOR)/C1 -1.65% 342.5 End-of-day quote.-11.67%
FEEDER CATTLE?FUTURES (GF) - CMG (ELECTRONIC)/C1 0.76% 135.9 End-of-day quote.-7.19%
LIVE CATTLE (LE) - CMG (ELECTRONIC)/C1 0.65% 100.05 End-of-day quote.-21.73%
SANDERSON FARMS, INC. 0.35% 111.5 Delayed Quote.-36.73%
SOYBEAN MEAL FUTURES (ZM) - CBE (ELECTRONIC)/C1 -0.20% 292.9 End-of-day quote.-2.13%
THE NEW HOME COMPANY INC. 0.63% 3.2 Delayed Quote.-31.33%
UBER TECHNOLOGIES, INC. 0.82% 30.68 Delayed Quote.3.16%
WHEAT FUTURES (W) - CBR (FLOOR)/C1 -1.75% 490 End-of-day quote.-12.30%
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