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Wed, May. 28, 7:30 AM
- An outbreak of a deadly pig virus at a farm in Indiana has rekindled fears the disease will reduce the U.S. hog population.
- The incident was a secondary outbreak which raises concerns that affected pigs aren't developing full immunity to the virus.
- Hog futures are up 26% since the PEDV first hit last summer.
- Related stocks: TSN, HRL, HSH, SEB, PPC
- Related ETFs: UBC, COW, LSTK.
Tue, Apr. 29, 7:15 PM
- U.S. government forecasters predict a more than 65% chance for an El Niño weather phenomenon by the end of the year, a development that threatens to drive up prices for food and other staples.
- El Niño has a reputation for triggering sharp run-ups for prices in markets as diverse as nickel, coffee and soybeans, and commodities investors, traders and analysts are bracing for impact at a time when global supplies of many raw materials already are stretched.
- Global food prices - which at the start of 2014 were expected to be largely flat this year - could easily climb 15% to record highs in as a little as three months after an El Niño occurs, says World Bank economist James Baffes.
- But Société Générale analysts say it is miners, not farmers, who have the most to worry about; since 1991, nickel prices rose the most (13.9%) during El Niño years among commodities the bank tracks.
- ETFs: DBA, CORN, DBC, JO, JJC, RJA, JJG, WEAT, SOYB, DJP, SGG, DBB, COW, NIB, GSG, RJI, CAFE, BAL, GCC, DAG, USCI, JJA, GRU, CHOC, CANE, JJN, RGRA, AGA, JJT, RGRC, CPER, AGF, GSP, BOM, RJZ, JJU, GSC, LSC, FUD, DJCI, USAG, BOS, SGAR, JJM, DEE, BDD, UCI, LD, WEET, UAG, DYY, DIRT, BCM, CMD, DDP, NINI, JJS, CTNN, TAGS, UBC, CUPM, FOIL, UCD, ADZ, RGRI, LEDD, UBM, CMDT, BDG, SBV, USMI, DPU, LSTK, CSCB, GRWN, HEVY, CSCR
Thu, Feb. 6, 9:33 AM| 1 Comment
Sun, Jan. 12, 7:10 AM
- The U.S. pork industry is attempting to cope with a virus that has killed thousands of piglets since first appearing in April and has boosted prices in the $9B hog-futures market.
- Porcine epidemic diarrhea (PED) virus is only fatal to young pigs and is not harmful to humans, but it could cause the loss of 2-3M head, or as much as 3% of the industry's total.
- Hormel Foods (HRL) has already warned that FY 2014 earnings could suffer the effects of "potentially volatile hog costs" because of the virus. Tyson Foods (TSN) is also a pork producer.
- Still, the USDA has predicted that pork output will increase 2% this year to 23.6B pounds, due to heavier hog weights.
- ETFs: UBC, LSTK, COW
Oct. 5, 2013, 8:25 AM
- The U.S. government shutdown and the resulting lack of official statistics are prompting traders to shun agricultural commodities due to concerns about the vacuum of information and fears of a data dump that will hit markets hard when the shutdown ends.
- Likely to fall victim to the shutdown is the USDA's monthly Wasde crop production report, set for Oct. 11, which affects prices of grains and other agricultural commodities around the world.
- Analysts say concerns over a delay could lead to additional short-covering as speculative shorts look to take risk off the table; once the USDA resumes operations, a torrent of backlogged data could trigger a highly volatile reaction.
- ETFs: MOO, CROP, PAGG, VEGI, JJG, GRU, CORN, WEAT, SOYB, COW, UBC, JJA, RJA, AGF, DBA, FUD, UAG, DAG, AGA, ADZ, JJS, TAGS, USAG, RGRA.
Aug. 12, 2013, 3:29 AM
- This time last year, the U.S. was suffering from a severe drought that hit production and sent corn prices (CORN) to a record high of $8.31 a bushel.
- Now, the harvest is expected to rise to at least 14M bushels from 10.8M in 2012, causing prices to sink to $4.65 a bushel. Soybean is down by over 20% from a year ago.
- While the drop in prices - which is forecast to continue - is hurting farmers, it's providing relief for meat producers and other food companies.
- Relevant livestock ETFs include COW and UBC.
Sep. 25, 2012, 6:22 AMThe drought-induced rise in corn-feed costs led farmers to up the pace of hog slaughtering to 73.3M pigs from Jan-Aug, the most in 3 years, although farmers are making steep losses as pork prices fall. The increased slaughtering has prompted the USDA to estimate that pork supply will next year fall to the lowest per capita since 1975. That may well cause prices to rebound, although it will still be cheaper than beef. | Comment!
Apr. 25, 2012, 2:53 AMSouth Korea will halt customs clearance of U.S. beef imports after the first U.S. case of mad cow disease in six years. South Korea was once the third-largest buyer of U.S. beef but began restricting shipments in 2003. Live cattle futures rebound after yesterday's beating; +0.3% as of 12:15p.m. Tokyo time. | Comment!
Apr. 24, 2012, 3:18 PMLive cattle futures -2.75% on news of a dairy cow in California infected with mad cow disease. "USDA remains confident in the health of the national herd and the safety of beef and dairy products." Tyson Foods (TSN +1.3%) bounces back after initially diving on the news. Chicken producer Sanderson Farms (SAFM) +3.6%. MCD -0.9%. | 2 Comments
Nov. 30, 2011, 4:30 AM
Sep. 30, 2011, 11:35 AMFertilizer stocks are hit after the USDA reports corn stockpiles are 150M bushels larger than expected. Mosaic (MOS -6.9%) shares hit a 52-week low; CF Industries (CF -7.3%) also slides. But chicken producers Sanderson Farms (SAFM +4.3%) and Tyson Foods (TSN +4.3%) gain, along with pork processor Smithfield (SFD +4%), benefiting from lower animal feed prices. | 7 Comments
Aug. 2, 2011, 9:05 AM
Jun. 9, 2011, 12:12 PM
Jun. 8, 2011, 12:35 PMThe grain complex is sharply higher ahead of tomorrow's USDA report, expected to confirm a steep decline in reserves. Needing a perfect growing season to rebuild inventories, wet weather in some regions is preventing farmers from getting the crop planted and dry weather elsewhere will pinch yields. JJG +2.8%. | 3 Comments
May. 27, 2011, 3:05 PMA decision is expected within days on whether Russia will lift its ban on grain exports. Deputy PM Zubkov, expecting a bumper crop, says "there is a large probability" the embargo will be lifted. Domestic traders have been accumulating cheap product in the hopes the ban will be lifted and they can sell it overseas at far higher prices. | Comment!
May. 12, 2011, 3:08 PMIf Goldman Sachs has it right, cattle operations and pig farmers should take advantage of the recent break in corn prices to pick up some feed. Analysts are skeptical of the USDA's prediction of expanded U.S. supplies, and with stocks ultra-tight, a weather event could send prices soaring. | 5 Comments
COW vs. ETF Alternatives
The Dow Jones-UBS Livestock Subindex Total Return is a sub-index of the Dow Jones-UBS Commodity Index Total Return and reflects the returns that are potentially available through an unleveraged investment in the futures contracts on physical commodities comprising the index plus the rate of interest that could be earned on cash collateral invested in specified Treasury Bills. The index is currently composed of two livestock commodities contracts (lean hogs and live cattle) traded on U.S. exchanges.
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