LIVESTOCK HIGHLIGHTS: Top Stories of the Day
23 July 2019 - 7:52AM
Dow Jones News
TOP STORIES
Cal-Maine Sales Fall 37% In Latest Quarter
Cal-Maine Foods Inc. (CALM) swung to a loss and said sales fell
in its latest quarter as prices for eggs weakened.
Cal-Maine on Monday reported a quarterly net loss of $19.8
million, or 41 a share, compared with a profit of $71.8 million, or
$1.48 a share, a year earlier. Sales fell 37% from the year earlier
to $280.6 million.
Cal-Maine Anticipates Volatile 2020 as Feed Costs Rise -- Market
Talk
09:46 ET - Cal-Maine Foods says it anticipates volatile grain
prices in its next fiscal year, thanks to the flooding that hit the
Midwest this spring as well as "ongoing uncertainties and
geopolitical issues surrounding trade agreements." Cal-Maine
reported F4Q results, and said it saw its feed costs rise 5.3% this
fiscal year--coinciding with a 52% drop in market price for eggs.
The company reported a $19.8M loss it attributed to the wet
weather, "which resulted in higher ingredient prices at some of our
larger feed mill operations." December corn futures on the CBOT hit
a year-high of $4.74 per bushel in June, and have since fallen but
are still up 6.4% since the start of the year. Cal-Maine shares off
2.7%.(kirk.maltais@wsj.com; @kirkmaltais)
STORIES OF INTEREST
The Perils of Swine Fever Mania -- Market Talk
12:45 ET - Meat stocks like Tyson Foods, JBS and Pilgrim's Pride
have soared this year as African swine fever decimates China's hog
herds, which could boost global meat prices for years to come.
Given the meat industry's predilection toward boom-and-bust cycles,
though, Mizuho suggests caution: China may throw up import barriers
to protect its own pork industry as it recovers from the disease,
and given limited information on the scale of the loss to China's
hog farms, international meat companies could overestimate demand
and create a new meat glut. That said, Mizuho remains a believer in
swine fever's potential effect on markets: "if the numbers are real
and the borders are truly open, we are likely meaningfully
underestimating the [meat industry's] earnings power for at least
the next three years." (jacob.bunge@wsj.com; @jacobbunge)
Egg Glut Dings Cal-Maine Foods -- Market Talk
1205 ET - Egg producer Cal-Maine Foods is struggling with a glut
of eggs that has pushed down prices in key regions, including the
southeast, where average-market prices for conventional eggs
plunged 52% in its fiscal fourth quarter compared with last year.
The number of hens laying table eggs in the US rose about 1% for
the May-June period to 332M and they are getting more productive,
according to data from the Agriculture Department. Cal-Maine's
customers include restaurant chains and grocers, with Walmart
accounting for about one-third of sales during its last fiscal
year. Shares fall 2.5%. (micah.maidenberg@wsj.com,
@MicahMaidenberg)
Fast-Food Stocks Are No Value Meal -- Heard on the Street
Much like American consumers, investors can't seem to get enough
fast food. They will likely require a strong upcoming earnings
season to stay satisfied.
Shares of the largest such companies set to report quarterly
results this week have performed admirably lately. Chipotle Mexican
Grill has rallied about 75% so far this year while Starbucks and
McDonald's are up about 45% and 20%, respectively.
FUTURES MARKETS
Cattle Finishes Higher, Hogs Settle Lower -- Market Talk
15:48 ET - October live-cattle futures on the CME finish trading
up 0.6%, at $1.09150 a pound. Traders say cattle futures have been
undervalued versus cash prices, and they expect cattle futures to
continue to move up higher until they reach where cash prices are
trading at--roughly $1.15-1.16 per pound. Lean hogs, meanwhile,
fall 0.8% to 83.225c as rumors of new Chinese interest in goodwill
agricultural purchases fizzle out--a downer for hog futures that
have been reactive to developments in trade negotiations by the
Trump Administration. (kirk.maltais@wsj.com; @kirkmaltais)
CASH MARKETS
Estimated U.S. Pork Packer Margin Index - Jul 22
Source: USDA, based on Wall Street Journal calculations
All figures are on a per-head basis.
Date Standard Margin Estimated margin
Operating Index at vertically -
integrated operations
Jul 22 -$ 4.54 +$ 40.35
Jul 19 +$ 0.54 +$ 37.32
Jul 18 -$ 2.24 +$ 32.16
* 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 104.5
(Percent of Year-Ago) Select 96.2
USDA Boxed Beef, Pork Reports
Wholesale choice-grade beef prices Monday fell 10 cents per
hundred pounds, to $213.32, according to the USDA. Select-grade
prices rose 8 cents per hundred pounds, to $189.59. The total load
count was 109. Wholesale pork prices rose $1.41, to $79.17 a
hundred pounds, based on Omaha, Neb., price quotes.
(END) Dow Jones Newswires
July 22, 2019 17:37 ET (21:37 GMT)
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