TOP STORIES 



  Poultry Workers Push to Slow Processing -- Market Talk 


  14:10 ET - Chicken-plant workers launched a legal effort to slow processing lines that they say raise the risk of injury and Covid-19 infection. The United Food and Commercial Workers International union sued the Agriculture Department in federal court over the agency's 2018 decision to allow some plants to slaughter as many as 175 chickens a minute, a productivity boost long sought by the meat industry. UFCW argues the USDA didn't follow proper steps for giving public notice or seeking input, and its lawsuit seeks to shelve the program. USDA officials have no immediate comment. (jacob.bunge@wsj.com; @jacobbunge) 


  Coronavirus Pandemic Squeezes McDonald's Profit 


  McDonald's Corp. profit suffered a deeper-than-expected drop, as the coronavirus shut restaurants around the globe and forced the chain to spend tens of millions of dollars to help keep its franchisees operating. 


  For its second-quarter ending in June, McDonald's reported earnings per share adjusted for one-time items of 66 cents per share, down 68% from the prior year's period. Analysts had expected earnings of 74 cents a share. 


  STORIES OF INTEREST 


  Nordea Drops JBS On Environmental Concerns -- Market Talk 


  0911 ET - Finland's Nordea Asset Management says it dropped its EUR40 million ($46.9 million) investment on Brazil's meatpacker JBS over the company's environmental practices. Under Brazilian law, meatpackers must make sure all their beef comes from pastures opened before 2008. But the industry has a hard time convincing authorities cattle coming from a patchwork of remote ranches on the forest's edge never spent time on newly-deforested areas. Cattle rearing is often blamed as a major driver of forest loss in the Brazilian Amazon. JBS has said in the past it has efficient tracking systems in place and that its beef is clean. (paulo.trevisani@wsj.com; @ptrevisani) 


  Australia Cattle Prices Keep Defying Gravity -- Market Talk 


  0604 GMT - Australia cattle prices continue to defy gravity and international trends, with good seasonal conditions set to keep demand from farmers wanting to increase herds high and prices elevated, National Australia Bank says. "There is a risk that the fundamentals are now largely misaligned with our export market,"it says. The Eastern Young Cattle indicator is currently just below its all-time record of A$7.71/kg set in late June. "This year has seen the biggest runup in cattle prices in Australian history, all at a time of heightened global risk and uncertainty around demand," NAB says. (lucy.craymer@wsj.com) 


  Chinese Dairy Demand May Strengthen -- Market Talk 


  0932 GMT - Demand for Chinese dairy products might strengthen as Chinese consumers become more health conscious due to the pandemic, Goldman Sachs says. It expects Inner Mongolia Yili Industrial Group and China Mengniu Dairy to deliver mid-teen percentage to 20% growth in sales in 2Q. GS expects intense promotional activity to also taper off in 2H, which could boost profit margins for both companies. GS also expects the benign price outlook for raw milk to benefit both companies. Inner Mongolia Yili shares are 4.3% higher and China Mengniu Dairy shares are up 5.6%. (yiwei.wong@wsj.com) 


  FUTURES MARKETS 


  Hog Futures Finish Lower as USD Rises -- Market Talk 


  15:23 ET - Lean hog futures on the CME finished slightly lower, down 0.1% at 50.725 cents per pound. For hogs, one reason for the decline may be following the US dollar. The USD index trading on the Intercontinental Exchange broke a seven-session decline in trading Tuesday, with traders wondering if a recovery in the USD's strength spells trouble  for commodities reliant on export demand, like pork. "US trade with China  remains key for the remainder of the year and the Yuan Renminbi is managed by Chinese officials," says Steiner Consulting Group. "Rather, it is political calculations that will determine the path of US exports to China in the second half of the year." Meanwhile, live cattle futures finished up 1.1% at $1.05 per pound. (kirk.maltais@wsj.com; @kirkmaltais) 


   CASH MARKETS 

 
Estimated U.S. Pork Packer Margin Index - Jul 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 
 
Jul 28       +$ 51.04            +$ 15.21 
Jul 27       +$ 52.74            +$ 18.86 
Jul 24       +$ 61.32            +$ 17.70 
 
* 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   95.2 
      (Percent of Year-Ago)      Select   99.2 
 
USDA Boxed Beef, Pork Reports 


  Wholesale choice-grade beef prices Tuesday rose 41 cents per hundred pounds, to $202.96, according to the USDA. Select-grade prices fell $1.81 per hundred pounds, to $188.32. The total load count was 124. Wholesale pork prices fell $1.70, to $68.81 a hundred pounds, based on Omaha, Neb., price quotes.