TOP STORIES

Cargill Profit Drops on Trade, Flooding Challenges -- Update

Cargill Inc. is altering its global food trading to navigate production problems and trade disputes that have cut deeply into the agricultural giant's profit.

The Minnesota-based company is shipping more farm commodities to Europe and the Middle East due to China's tariffs on U.S. goods like soybeans and ethanol, said David Dines, Cargill's chief financial officer. Cargill is also boosting international sales of beef and poultry, as a hog disease sharply reduces into China's pork production.

After adjusting for one-time costs and events, Cargill said the company earned $476 million, versus $809 million in the same quarter last year. For the full year, Cargill's net profit fell 17% to $2.56 billion, the lowest level since 2016, and revenue declined 1% to $113.5 billion.

No New Pork Export Sales to China -- Market Talk

09:13 ET - USDA data released this morning shows no new export sales of pork to China, which may be a blow to the recent rally of hog prices on the CME. Net sales of pork were low this past week, according to the USDA's export sales report, totaling only 11,300 metric tons for 2019, down 52% from the previous week. Traders have been looking for indicators of increased Chinese purchases of US pork, especially considering that the African swine fever issue in China is far from being resolved. Hog futures on the CME have rallied 7.5% in the past two days. Meanwhile, US beef export sales totaled 21,500 tons, up 15% from the previous week. (kirk.maltais@wsj.com; @kirkmaltais)

STORIES OF INTEREST

Farmers Stockpiling Corn in Response to Tough Growing Conditions -- Update

A costly tug of war has broken out over what is usually one of the Farm Belt's most ubiquitous commodities: corn.

Agribusiness companies, including Cargill Inc., Archer Daniels Midland Co. and Smithfield Foods Inc. are dangling hefty premiums to buy bushels of corn in places where unrelenting rain this spring prevented farmers from planting millions of acres.

USDA Report Shows Effect of Weather on US Crops -- Update

The latest data from the U.S. Department of Agriculture is showing a more complete but mixed picture of how farming in the U.S. has been affected by the record-setting level of precipitation in the Midwest this spring.

The biggest surprise for the monthly World Agricultural Supply and Demand Estimates (WASDE) report was with wheat supply and demand, which showed lower ending inventories and higher yields and production. Wheat ending inventories are now forecast at 1 billion bushels, down 72 million from last month, while production is projected 18 million bushels higher.

Planting Delays Bite Into Soybean Inventory Projections -- Market Talk

12:14 ET - US stockpiles of grains have declined somewhat in the wake of the wettest 12-months on record for the US Midwest, with soybean inventories for 2019/20 expected down to 795 million bushels from 1.045 billion bushels forecast last month. However, corn stockpiles for 2019/20 were forecast up to 2.01 billion bushels, from 1.675 million bushels forecast in June. Wheat stockpiles were forecast at 1 billion bushels, down from 1.072 billion bushels last month. (kirk.maltais@wsj.com; @kirkmaltais)

FUTURES MARKETS

Hog Futures Rally Hits a Wall -- Market Talk

16:04 ET - The rally of hog futures -- up 7.5% over the past two days -- has hit a wall, with the August CME contract finishing down 3.1% at 79.175 cents per pound. Because of a lackluster export sales report and WASDE, hog futures spent only limited time above 80 cents per pound -- a threshold it had not crossed in roughly three weeks. However, August cattle futures turned it around, finishing up 0.2%. The cattle contract has maintained a generally positive trend since late June, rising 5.5% since June 21. (kirk.maltais@wsj.com; @kirkmaltais)

CASH MARKETS

 
Estimated U.S. Pork Packer Margin Index - Jul 11 
 
All figures are on a per-head basis. 
 
Date     Standard Margin       Estimated margin 
         Operating Index         at vertically - 
                             integrated operations 
 
Jul 11       -$  1.61            +$ 22.42 
Jul 10       -$  2.28            +$ 21.34 
Jul 9        +$  5.59            +$ 25.58 
 
* 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  103.1 
      (Percent of Year-Ago)     Select   96.8 
 
USDA Boxed Beef, Pork Reports 
 

Wholesale choice-grade beef prices Thursday fell 65 cents per hundred pounds, to $213.77, according to the USDA. Select-grade prices fell 10 cents per hundred pounds, to $190.79. The total load count was 148. Wholesale pork prices rose 50 cents, to $70.83 a hundred pounds, based on Omaha, Neb., price quotes.

(END) Dow Jones Newswires

July 11, 2019 17:28 ET (21:28 GMT)