TOP STORIES 



  New Zealand Farm-Gate Meat Prices May Temporarily Rebound -- Market Talk 


  0627 GMT - New Zealand farm-gate meat prices will likely see a temporary rebound as the impact of the drought fades and peak supply passes, says Nathan Penny, Senior Agri Economist at Westpac. He adds, however, the longer-term outlook for meat prices is mixed, with the impact of the global recession balanced by supply disruptions such as the ongoing African swine fever. "If anything, we expect beef prices to come under more pressure than lamb prices as U.S. beef production will eventually recover," it says. (lucy.craymer@wsj.com) 


  The Future of Fast Food Has Arrived Ahead of Schedule -- Heard on the Street 


  Big restaurant chains have done an admirable job navigating the coronavirus crisis. As a result, the future of the industry might look a lot like the present. 


  The spread of the coronavirus, coupled with government-mandated lockdowns, wreaked havoc on the U.S. restaurant industry. Darden Restaurants, which operates sit-down chains like Olive Garden and LongHorn Steakhouse, said Thursday that comparable sales fell nearly 48% from a year earlier in the quarter that ended May 31, and are down by a third so far in June. Many smaller independent businesses, meanwhile, have been hit even harder. 


  STORIES OF INTEREST 


  Albertsons Goes Public as Coronavirus Pandemic Upends Grocery Business 


  Supermarket chain Albertsons Companies Inc. started trading publicly after years of unsuccessful attempts, buoyed by strong demand for groceries as consumers cook more at home during the coronavirus pandemic. 


  The initial public offering of the nation's second-largest supermarket chain comes as food retailers are thinking through how to overhaul their businesses to protect workers and customers while meeting higher demand driven by the pandemic. Albertsons, owner of Safeway and Jewel-Osco, is seeking to capitalize on changing shopping behavior by selling more fresh food and higher-quality items from a wider network of suppliers. 


  FUTURES MARKETS 


  Lean Hogs Finish 6% Lower -- Market Talk 


  15:15 ET - Lean hog futures on the CME finished trading Friday down 6.2%, closing down at 48.125 cents per pound. It's the lowest lean hog futures have traded at since late April, with the contract driven lower by concerns that Covid-19 will delay the return of food service businesses to consuming their normal levels of meat. "There is still considerable uncertainty in the US economy," says Steiner Consulting Group. Live cattle futures fell slightly Friday, dropping 0.1% to 96.025 cents per pound. (kirk.maltais@wsj.com; @kirkmaltais) 


  US-China Tensions Ratchet Up and Pressure Grains -- Market Talk 


  13:58 ET - Tensions between the US and China continue to rise, with Chinese leaders threatening to cut off its increased farm good purchases if the US continues to pressure China with sanctions for things like the mass detention of Uighur Muslims in China's northwestern Xinjiang region. The uptick in tension isn't sitting well with grains traders. "The Phase 1 Trade deal is ongoing but could become strained without a change in US political rhetoric towards China," AgResource says. Grain futures fall, led by wheat, which is down 3.3%. (kirk.maltais@wsj.com; @kirkmaltais) 


   CASH MARKETS 

 
Estimated U.S. Pork Packer Margin Index - Jun 26 
 
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 26       +$ 71.96            +$  6.87 
Jun 25       +$ 68.74            +$  4.52 
Jun 24       +$ 77.94            +$ 11.51 
 
* 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   94.6 
      (Percent of Year-Ago)      Select  101.0 
 
 
USDA Boxed Beef, Pork Reports 


  Wholesale choice-grade beef prices Friday fell $1.09 per hundred pounds, to $207.17, according to the USDA. Select-grade prices fell $1.08 per hundred pounds, to $198.85. The total load count was 135. Wholesale pork prices rose $1.09, to $64.93 a hundred pounds, based on Omaha, Neb., price quotes.