LIVESTOCK HIGHLIGHTS: Top Stories of the Day

07/08/2020 | 05:22pm



Shake Shack Faces Sales Plateau -- Market Talk

11:13 ET - Shake Shack has met a plateau on the path back to normalcy, BTIG says. Between March and May, sales rebounded to a down-42% level from a down-70% level during the coronavirus pandemic, but same-store sales have stalled at that level ever since, repeating the 42% decline in June. The first week of July saw sales down 39%, reducing hopes for a better recovery this month. Moreover, New York City same-store sales were down 58% compared with last year in the first week of July, a bad sign in the company's most important market, BTIG says. (; @mattgrossman)


Yum China Could Offset Coronavirus Impact With Cheaper Raw Materials -- Market Talk

1000 GMT - Yum China should be able to offset some of its earnings pressure from the coronavirus pandemic with declining chicken prices and solid investment gains, Jefferies says. The U.S. bank raises its target price on the stock to $59.00 from $52.50 while maintaining a buy rating. Jefferies increases its 2020 net profit forecast for the company by 21% to factor in cheaper raw materials. Chicken prices, which make up a large portion of Yum China's overall costs, have been declining and should benefit margins in 2H, Jefferies notes. Yum China also made a solid market-to-market gain from its investment in delivery company Meituan Dianping, whose shares have risen significantly in recent months, Jefferies adds. Yum China's shares last closed 0.3% higher at $50.58. (




Simply Good Beats 3Q Sales Expectations But Pandemic Rules Hamper Some Products

Simply Good Foods Co. beat sales expectations for its fiscal third quarter even though the seller of food and snack items said the Covid-19 pandemic hampered demand for some products as government officials imposed rules meant to halt the spread of the coronavirus and consumers stayed home.

Simply Good Wednesday said it generated $215.1 million in sales for its quarter that ended May 30. That is up from $139.5 million for the same quarter a year ago, but comparisons are affected by the company's acquisition of protein-products company Quest Nutrition, a deal it completed last November.


Combined Uber Eats and Postmates To Rank No. 2 in US Market Share -- Market Talk

07:53 ET - Uber Eats and Postmates would occupy 31% of the US food-delivery market share after they combine, ranking second after DoorDash, according to Wedbush estimates. Uber this week agreed to buy Postmates for $2.65B in stock. "This combination makes a lot more sense than a European provider coming in and acquiring Grubhub as it accomplishes the things that consolidation is supposed to," Wedbush says. Postmates has strong presence in Los Angeles, San Diego and Phoenix, cities where Uber is behind, Wedbush notes. (; @depsebastian)




Livestock Futures Decline Extends -- Market Talk

15:52 ET - Livestock futures on the CME close lower again, with August lean-hog futures down 1.9% and live-cattle futures finishing down 0.9%. Hog futures are now down 32% since peaking in early May, with demand still weak as the recovery from the coronavirus pandemic is unstable. "Cash hog markets have been steady-weak over these past three weeks and despite the lower carcass weight data since mid-May, there's no disagreement that hog supplies are anything but burdensome as we work through April-May missed kills," StoneX says. (; @kirkmaltais)



Estimated U.S. Pork Packer Margin Index - Jul 8 
All figures are on a per-head basis. 
Date     Standard Margin       Estimated margin 
         Operating Index         at vertically - 
                             integrated operations 
Jul  8       +$ 76.30            +$ 11.53 
Jul  7       +$ 64.61            +$  0.63 
Jul  6       +$ 71.32            +$  5.58 
* 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. 
This report compares the USDA's latest beef carcass composite 
values as a percentage of their respective year-ago prices. 
          For Today              Choice   94.9 
      (Percent of Year-Ago)      Select  101.8 
USDA Boxed Beef, Pork Reports 

Wholesale choice-grade beef prices Wednesday fell $1.47 per hundred pounds, to $203.83, according to the USDA. Select-grade prices fell $1.32 per hundred pounds, to $195.52. The total load count was 178. Wholesale pork prices rose $5.07, to $67.10 a hundred pounds, based on Omaha, Neb., price quotes.

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