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DJ LIVESTOCK HIGHLIGHTS: Top Stories of the Day

· 02/05/2021 17:03
Estimated U.S. Pork Packer Margin Index - Feb 5 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 Feb 5 +$ 37.58 +$ 44.69 Feb 4 +$ 38.16 +$ 47.47 Feb 3 +$ 22.77 +$ 35.17 * 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 111.3 (Percent of Year-Ago) Select 106.2 USDA Boxed Beef, Pork Reports

TOP STORIES

Brazil Beef Exports Fell in January as Sales to Chile Dropped -- Market Talk

1442 ET - Brazilian beef exports declined 6% in volume in January from a year earlier to 127,139 metric tons and fell 11% in terms of revenue to $549M in the period, according to the meatpackers association. China and Hong Kong together were the biggest buyers of Brazilian beef, and total exports to the two of them rose to 79,896 tons from 76,965 tons a year earlier. Chile was the second-biggest foreign buyer of Brazilian beef, but exports to the South American country fell 16.6% to 5,168 tons, while sales to third-biggest buyer Egypt fell 13.5% to 4,501 tons. Brazil was the world's biggest beef exporter in 2020 through October, according to the USDA. (jeffrey.lewis@wsj.com)

Feedlot Demand Spurs Wheat Uptick -- Market Talk

1333 ET - Wheat futures trading on the CBOT are leading grains higher, based off of livestock producers buying more wheat for animal feed purposes. "Soy/wheat futures push higher on firming cash basis and feedlot demand for new crop wheat in the Plains," says AgResource. "Remember that wheat holds a protein advantage to corn and offers 10% more ruminate feed value." Wheat futures have been on a slide in February, sinking 3.2% since February 1 -- making wheat more attractive as a feed ingredient for livestock. (kirk.maltais@wsj.com; @kirkmaltais)

STORIES OF INTEREST

US Farm Incomes to Drop as Record Federal Payments Recede -- Market Talk

1258 ET - US farm income will drop 8% in 2021 as historic government payments fade, according to a US Department of Agriculture forecast. Direct government payments, which soared to a record $46B under the Trump administration, will be cut nearly in half this year, pushing net farm income to $111B, USDA said. Those payments comprised nearly 40% of farmers' incomes in 2020 as the former administration sought to stem farmers' losses from the coronavirus pandemic. Higher production costs, particularly for animal feed, fertilizer and labor, also will weigh on farmers' earnings this year. However, sharply higher prices for major agricultural commodities are expected to help offset the drop-off in federal support, with cash receipts for corn and soybeans projected to increase by 19% and livestock receipts up by 5%. (jesse.newman@wsj.com; @jessenewman13)

Nathan's 3Q Earnings Show Easing of Pandemic Consumption Trends -- Market Talk

10:12 ET - Nathan's Famous 3Q results still show a pandemic-induced shift to more home consumption, but the hot-dog company's numbers look a bit more balanced than they did months earlier. 3Q restaurant-operations revenue declined 36% year over year, a more modest trend compared with the 52% decline in the full fiscal year to date. Meanwhile, product licensing, which includes home sales to consumers, made up 33% of Nathan's 3Q revenue, compared with 43% in the full year to date. Total year-to-date revenue is down 29% year over year, but 3Q revenue declined only 16%. Net income improves to 33 cents a share, from 29 cents a share in 3Q 2019. (matt.grossman@wsj.com, @mattgrossman)

FUTURES MARKETS

Livestock Futures Close Higher to End Week -- Market Talk

1530 ET - Livestock futures on the CME capped off trading this week with an up day--as live cattle futures gain 0.1% to $1.23775 per pound, and lean hog futures finish up 1.3% to 80.3 cents per pound. For hogs, the uptick in futures--the third time in the past four sessions--comes as hog weights have been on the decline, possibly a reaction to high costs for feedstock. "As producers look to minimize feed costs part of the offset could possibly be a reduction in feed efficiency leading to lower dressed weights and reduced pork supplies," says Steiner Consulting Group. (kirk.maltais@wsj.com; @kirkmaltais)

CASH MARKETS

Wholesale choice-grade beef prices Friday rose 33 cents per hundred pounds, to $234.58, according to the USDA. Select-grade prices rose 35 cents per hundred pounds, to $220.79. The total load count was 100. Wholesale pork prices fell $1.29, to $83.19 a hundred pounds, based on Omaha, Neb., price quotes.

(END) Dow Jones Newswires

February 05, 2021 17:03 ET (22:03 GMT)

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