Will Pork Sizzle or Fizzle for Tyson? -- Market Talk
12:48 ET - Some analysts wonder whether the increasingly crowded pork industry will give top US meatpacker Tyson Foods heartburn. JPMorgan analysts point out that pork processing margins have fallen sharply from record levels a year ago, and they wonder whether competitors' new pork plants in Iowa and Michigan are a factor--forcing established pork players like Tyson to spend money booking hogs to ensure their plants are well-supplied as the new plants begin buying their own animals. Tyson's the third-largest US pork processor and derives 11% of annual sales from pork. Analysts surveyed by Thomson Reuters expect Tyson to deliver a 35% jump in fiscal 4Q net income when the company reports results Monday. ([email protected]; @jacobbunge)
Chipotle Faced Spooky Traffic Numbers in October -- Market Talk
10:02 ET - Chipotle's traffic at the end of last month looked frightful, according to Cowen, which analyzed Facebook check-in data. The last week of October is usually a high traffic week for the burrito maker, which runs an annual "Boorito" promotion in which customers who show up in costume get discounted food. But Cowen found that fewer people checked in to Chipotle on Facebook this time versus the same period last year. As a result of the decelerating traffic trends, Cowen is predicting flat same-store sales for 4Q, versus the 1.5% growth other analysts, on average, are forecasting. ([email protected])
STORIES OF INTEREST
Corn, Soybean Futures Consolidate After Report
Corn and soybean futures rebounded on Friday as traders absorbed a government report projecting larger-than-expected harvests.
Traders were content to consolidate the current prices, analysts said, after futures had fallen sharply in the wake of the U.S. Department of Agriculture's Thursday report. Some analysts said they expected futures to remain tethered to current price levels for the foreseeable future.
Food Industry Outlook 'Better Than We Feared' Says JPMorgan -- Market Talk
16:06 ET - Food industry analysts at JPMorgan met with executives from Kellogg, General Mills, Conagra, Mondelez and other companies this week, and said that "overall, the general tone from companies was better than we feared." Most went out of their way to play down the idea that grocers have become significantly more contentious or difficult to deal with, said the analysts. Conagra said it is "ridiculous" how far sentiment has shifted away from food producers, and Mondelez said the death of food has been "grossly exaggerated," the analysts said. "We got a distinct sense that sales trends are improving right now, in part because of successful innovation, in part because of comparisons [to weak results a year ago], and in part because of better economic conditions," they added. ([email protected])
Livestock Futures Strained by Supply Outlook
Livestock futures ended the week sharply lower as traders reacted to softening cash markets.
Prices for physical cattle and hogs have been steady to lower this week. With supplies for both forecast to grow next year, analysts expect further pressure on cash prices ahead.
Estimated U.S. Pork Packer Margin Index - Nov 10
All figures are on a per-head basis.
Date Standard Margin Estimated margin
Operating Index at vertically -
Nov 10 +$39.95 +$ 44.24
Nov 9 +$39.56 +$ 43.90
Nov 8 +$35.54 +$ 41.64
* 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.
This report compares the USDA's latest beef carcass composite
values as a percentage of their respective year-ago prices.
For Today Choice 115.9
(Percent of Year-Ago) Select 114.1
USDA Boxed Beef, Pork Reports
Wholesale choice-grade beef prices Friday rose $1.11 per hundred pounds, to $213.85, according to the USDA. Select-grade prices fell $3.79 per hundred pounds, to $194.51. The total load count was 91. Wholesale pork prices rose 16 cents, to $80.98 a hundred pounds, based on Omaha, Neb., price quotes.