LIVESTOCK HIGHLIGHTS: Top Stories of the Day

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TOP STORIES

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Chicken Processors Lift Wages to Draw Workers -- Market Talk

15:13 ET - Sanderson Farms (SAFM) is among meat companies boosting wages to attract and keep workers as employment rates have climbed. CEO Joe Sanderson tells investors that in response to tight labor availability in Texas, where the company runs three plans processing nearly 4M chickens weekly, Sanderson Farms in January boosted wages across all of its slaughter plants. Other meat companies similarly face labor difficulties, and Tyson Foods (TSN) in April said it plans to lift wages at some chicken plants and expanding training, as the industry grapples with low unemployment levels and competing rural employers like manufacturing plants. (jacob.bunge@wsj.com; @jacobbunge)

Investors Bet Dean Foods Trimming Costs -- Market Talk

10:10 ET - Milk giant Dean Foods (DF) undershot Wall Street's 1Q expectations partly due to higher-than-expected costs, but investors anticipate better performance ahead for the company as expense-reduction efforts take hold later on this year and the company anticipates collecting a few more cents in profit on each gallon of milk. Shares rise 2.5%, recently changing hands at $19.57, though some analysts wonder whether Dean will be able to wring that much more in profit from each gallon of milk sold as overall milk consumption keeps ticking lower. (jacob.bunge@wsj.com; @jacobbunge)

Cash Hog Trade Strengthens -- Market Talk

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9:23 ET - Cash sales for hogs are expected steady to $1 higher as the market continues to firm. Packers will likely slaughter 442,000 head today, though Saturday's lower estimated kill of 89,000 could be further evidence of an ongoing supply pinch that is helping support higher prices. Wholesale pork prices rose almost a dollar on Monday to $78.46 per 100 pounds. The cash cattle trade, however, is quiet ahead of Wednesday's Fed Cattle Exchange auction. A little under 2,000 cattle are listed, an increase from last week but still below recent levels. (benjamin.parkin@wsj.com; @b_parkyn)

STORIES OF INTEREST

Dean Foods' View into Milk Prices Cloudy -- Market Talk

9:54 ET - For top US milk processor Dean Foods (DF), the fluctuating cost of raw milk is unavoidable, and the company tells analysts it's through trying to predict it. "We learned our lesson back in 2014," says CFO Chris Bellairs on 1Q conference call, referring to a punishing year in which spiking fluid milk costs that drove losses for Dean. "The market was volatile and it remains that way today." Lately it's moving against Dean again, with raw milk costs up 18% in 1Q versus 2016 levels and 15% higher for the current quarter so far. Despite reporting lower-than-expected 1Q profits, Dean retains its full-year earnings guidance of $1.35 to $1.55 a share. DF up 2.4% at $19.55. (jacob.bunge@wsj.com; @jacobbunge)

USDA Expected to Forecast Ongoing Grain, Soybean Surplus

CHICAGO -- Traders are bracing for pressure on grain and soybean futures as large production and stockpiles continue into next year.

Analysts surveyed by the Wall Street Journal expect the U.S. Department of Agriculture to show a surplus of grain and oilseed extending into the 2017-2018 crop year in its monthly supply-and-demand report.

FUTURES MARKETS

Cattle Futures Reverse to Close Lower

CHICAGO--Cattle futures closed sharply lower on Tuesday, reversing course as a rally continued to lose momentum.

Futures opened higher in Tuesday's session only to do a U-turn after contracts fell through technical support indicators. The combination of lighter-weight cattle and soaring beef prices helped push prices higher in the recent futures trade, but analysts questioned whether levels had now outpaced demand.

CASH MARKETS

Zumbrota, Minn Hog $2.00 Higher At $42.00 - May 9

Barrow and gilt prices at the Zumbrota, Minn., livestock market today are $2.00 higher at $42.00 per hundredweight. Sow prices are steady. Sows weighing under 450 pounds are $43.00-$45.00, 400-450 pounds are at $43.00-$45.00, 450-500 pounds are $43.00-$45.00 and those over 500 pounds are $47.00-$49.00.

The day's total run is estimated at 100 head.

Prices are provided by the Central Livestock Association.

Estimated U.S. Pork Packer Margin Index - May 9

This report reflects U.S. pork packer processing margins. The margin indices

are calculated using current cash hog or carcass values and wholesale pork

cutout values and may not reflect actual margins at the plants. These

estimates reflect the general health of the industry and are not meant to

be indicative of any particular company or plant.

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

*

May 9 +$20.55 +$ 42.82

May 8 +$20.36 +$ 38.82

May 5 +$21.72 +$ 36.74

* 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 118.9

(Percent of Year-Ago) Select 114.8

USDA Boxed Beef, Pork Reports

Wholesale choice-grade beef prices Tuesday rose 72 cents per hundred pounds, to $242.16, according to the USDA. Select-grade prices rose 14 cents per hundred pounds, to $223.03. The total load count was 118. Wholesale pork prices rose $1.86, to $80.32 a hundred pounds, based on Omaha, Neb., price quotes.

(END) Dow Jones Newswires

May 09, 2017 18:33 ET (22:33 GMT)