TOP STORIES
WH Group's China Business Could Offset U.S. Weakness -- Market Talk
0655 GMT - WH Group's share-price slide since March likely reflected concerns over its U.S. business, Nomura says. It maintains a buy call but trims the target price to HK$10.10 from HK$11.40 to factor in greater-than-expected Covid-19 effects on the pork company's U.S. operations. However, the brokerage believes WH's U.S. business is set for gradual recovery in 2H and strong momentum in its China business could offset weakness in the U.S. WH shares slump 7.6% to HK$6.66 after its 2Q results missed market views. (martin.mou@wsj.com)
Brinker International Swings to 4Q Loss As Pandemic Hurts Restaurants
Brinker International Inc. swung to a loss for the fiscal fourth quarter as some dining rooms were still closed and people dined out less due to the Covid-19 pandemic.
For the quarter ended June 24, the parent of Chili's and Maggiano's restaurants on Wednesday posted a net loss of $49.2 million, or $1.20 a share, compared with a profit of $46.7 million, or $1.22 a share, in the comparable quarter last year.
STORIES OF INTEREST
Performance Food Books $48.8M Increase in 4Q Bad Debt Expense -- Market Talk
10:28 ET - Performance Food Group's bad-debt expense rose $48.8M in 4Q due to Covid-19, Finance Chief James Hope says, noting that many of the company's customers are still paying on schedule. The company distributes products to restaurants. Its operating expenses rose 44.2% to $864.7M due to acquisitions, an increase in personnel expenses and the bad-debt expense. "We continue to focus on managing our operating expense to match demand," Hope says on a call with analysts. (dave.sebastian@wsj.com; @depsebastian)
Lineage Logistics On A Cold Storage Buying Binge -- Market Talk
10:20 ET - Cold-storage provider Lineage Logistics is scooping up warehouses across the US, where strong grocery sales during the coronavirus pandemic are driving up demand for temperature-controlled space. Over the past 15 or so months the company added 24 locations through 10 acquisitions valued at $500M in total. The deal spree began last spring and concluded with last month's acquisition of Southern Cold Storage. In July Lineage also entered the Canadian market with an agreement to acquire Toronto-based Ontario Refrigerated Services Inc. (Jennifer.Smith@wsj.com; @JenSmithWSJ)
FUTURES MARKETS
Hog Futures Pare Losses -- Market Talk
15:29 ET - Lean hog futures on the CME dropped another 0.4% Wednesday, closing at 51.6 cents per pound. However, this is a pared-down loss from earlier today, when hog futures were down to as low as 50.55 cents per pound. Hog futures may have found a short-term low, says Michael Seery of Seery Futures. "Hog market prices are very cheap as the risk/reward would be in your favor to go long," says Seery. Meanwhile, live cattle futures rose 1.2% to close at $1.09575 per pound. (kirk.maltais@wsj.com; @kirkmaltais)
CASH MARKETS
Estimated U.S. Pork Packer Margin Index - Aug 12
All figures are on a per-head basis.
Date Standard Margin Estimated margin
Operating Index at vertically -
integrated operations
Aug 12 +$ 67.77 +$ 20.45
Aug 11 +$ 65.15 +$ 17.27
Aug 10 +$ 62.93 +$ 17.42
* 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 92.4
(Percent of Year-Ago) Select 97.7
USDA Boxed Beef, Pork Reports
Wholesale choice-grade beef prices Wednesday rose $1.01 per hundred pounds, to $209.09, according to the USDA. Select-grade prices rose 97 cents per hundred pounds, to $195.99. The total load count was 182. Wholesale pork prices rose $1.48, to $71.25 a hundred pounds, based on Omaha, Neb., price quotes.
