US Hog Prices Gain While Pork Flounders, Create Unusual Gap
KANSAS CITY (Dow Jones)--A steep rise in cash hog prices and floundering wholesale pork values have resulted in deeply negative fresh pork processing margins. Last week alone, the Midwest direct hog markets gained from $6.75 to nearly $8.00 per hundredweight on a dressed basis, according to the U.S. Department of Agriculture"s daily market reports. The USDA"s pork carcass composite value, however, fell $1.09 for the week and on Friday hit a nine-week low, the next lowest of the year at $55.26. The Dow Jones Newswires packer margin index, an indicator of packer profitability, for Friday was at minus $19.64 per head. This was the largest negative margin figure on a daily basis since the index was initiated more than five years ago. It was also likely the largest negative margin in history, according to analysts.
STORIES OF INTEREST:
China Commerce Ministry: To File WTO Case Vs US On Poultry
BEIJING (Dow Jones)--China will file a complaint to the World Trade Organization about a decision by the U.S. Congress to restrict imports of Chinese poultry, Commerce Ministry spokesman Yao Jian said Wednesday. The U.S. Senate passed Tuesday a spending bill for the rest of the fiscal year ending Sept. 30, following the House of Representatives" approval of the bill last month. The package bars poultry imports from China.
Brazil Beef Co JBS Considers Doubling Dividend Payments
SAO PAULO (Dow Jones)--In an effort to lure investors this year, Latin America"s largest beef exporter JBS SA (JBSS3.BR) said its board of directors voted to double 2008 dividend payments. The final decision is subject to General Assembly approval, scheduled for March 30. If approved, JBS" board said it will increase 2008 dividend distributions to 102.3 million Brazilian reals ($43.5 million) compared to an initially planned distribution of BRL51.1 million.
Deadly Strain Of Bird Flu Found In Duck In Germany
BRUSSELS (AFP)--German authorities have discovered the first case of the deadly H5N1 bird flu virus this year, the European Commission announced Tuesday. The virus was discovered in a wild duck shot during a hunt near Starnberg, in Bavaria, the first case found in a wild bird for over a year, the commission said in a statement. Around 250 people have died of the human form of avian flu since 2003, according to the World Health Organization.
THE MARKETS:
CME Livestock Outlook: Hogs Mixed, Most Cattle Firm
CHICAGO (Dow Jones)--Chicago Mercantile Exchange hogs could open mixed with a firm bias Wednesday on continued U.S. stock-market gains and potential short covering after recent losses, said analysts and brokers. Pork bellies are expected to open 40 to 70 points higher on Tuesday"s $3 per hundredweight fresh belly price climb to $78 and possible reaction to CME"s weekly belly storage data. CME live cattle are called mostly firm amid positive U.S. stock-market trading and potential short covering, said analysts and brokers. Feeder cattle are seen mixed.
US Cash Cattle Pre-Open: Traders Call For Steady Prices
KANSAS CITY (Dow Jones)--Fed cattle prices in the Plains states this week were expected to be about steady with last week at $81 to mostly $82 per hundredweight on a live basis and $128 to mostly $130 on a dressed basis. Packer buyers may be tough price negotiators, however, market analysts and brokers said. Beef cutout values are up, but volumes are thin, which means packers are forcing the issue rather than having strong demand pull prices higher. Packers are controlling slaughter rates to limit beef supplies, but still they are losing money, the analysts said.
US Cash Hogs Pre-Open: Flat-$1 Lower On Weekend Kill Cutback
KANSAS CITY (Dow Jones)--Cash hog prices in the Midwest Wednesday are expected steady to $1 per hundredweight lower amid negative processing margins and reports of slaughter cutbacks for Saturday. The Dow Jones Newswires packer margin index for last Friday was minus $19.64 per head and for Monday was minus $19.34. The deeply negative returns in fresh pork operations reportedly contributed to a pullback in the Saturday slaughter and possibly some trimming of daily kills as well, analysts and livestock dealers said. The market tone early on Tuesday was near steady but bids fell as the day progressed and the afternoon market reports showed lower prices in the western corn belt and nationally.
By Curt Thacker, Dow Jones Newswires; 913-322-5178; curt.thacker@dowjones.com