Market Updates for November 1, 2019

Section Type

Dairy | Cheese

The CME Block and Barrel markets have seen some un traditional moves in recent weeks.  Speculators feel this is not due specifically to a demand element or supply element but a combination of both.  Current run-up we have seen is a combination of holiday buying and no extra product available to be taken to the market that fits the specific spec, but there is plenty of cheese to fill orders.  Traders feel there is a light at the end of the tunnel, but the length of the tunnel is still being defined.

Last week:

Block - Up

Barrel - Up

This Week:

Block - Up

Barrel - Up

 

Dairy | Eggs

 The national flock size is down. This is for the most part due to summer flock rotation. Retail demand has also increased.

Last week:

Large -Up

Medium -Up

Small -No Change

This Week:

Large -Up

Medium -Up

Small -Up

Dairy | Butter

Butter production continues to be active and inventories continue to grow; expectations are for butter pricing to stay relatively stagnant on the spot market over the next few weeks prior to the butter inventory is reset with current levels and previous inventory is ‘wiped out'. 

Last week:

Butter -Up

This Week:

Butter -Down

Grocery & Bakery | Wheat

Spring wheat (pizza flour) and durum wheat (pasta flour) prices have stabilized now that the crop is in the bin. Early reports suggest the quality of wheat harvested before snow/rain delays is very good; the rest was either not harvested or is being fed to livestock. 

Grocery & Bakery | Soybean Oil

Smaller 2019 soybean supply has boosted the soybean oil price trading range by about 3-5%.

Grocery & Bakery | Sugar

Beet processors raised offer prices on the small percentage of production they haven't forward sold. Cane sugar processors were holding their bids at a small premium to beet sugar in the East. Beet harvest is picking up steam in the Midwest; cane progress is starting at a normal pace.

Meat | Beef

Beef production has been running pretty close to last year. The percentage of cattle grading choice is running about 1-2% lower which is keeping choice beef prices 5% higher. Select beef prices are a little lower than last year.

Ground Beef:

Ground beef forward sales have been unimpressive which could limit upside until we get closer to Christmas.

Ribs:

Choice rib prices have exceeded 2018's highs. Select ribs are still 30% below choice but the gap is closing.

Briskets:

Big forward sales in late September have supported features this month, with fill-in buying supporting prices. These features should be winding down which could allow cash prices to ease.

Rounds:

Big forward sales in the last few weeks are supporting widespread features of flats and insides; prices are steady/higher. Forward prices for eye rounds are at a discount to cash; prices could slip a little.

Strips:

Off-season strip features are keeping supplies moving; prices are steady.

Tenders:

Choice tenders remain tight; prices are within a few percent of all-time highs. Selects are still at a 25% discount to choice tenders.

Thin Meats:

This is the time of year when thin meats prices start to bottom out. Most prices are close to where they were last year.

Meat | Pork

Pork production is record large and exports have not grown fast enough, so far, to keep pace. This has kept a lid on prices.

Butts:

Butts prices are very much in line with previous years like 2016 and 2017. No real evidence of big exports so far.

Hams:

Ham prices have advanced due to processor buying for the upcoming holidays; supplies are becoming more available which may signal a top.

Bacon/Bellies:

Belly prices are adjusting lower which could attract buying for upcoming features.

Ribs:

Spare and back rib prices are a little above 2018 levels now. Retailers/restauranteurs are actively booking for freezer programs.

Loins:

Loin prices continue to struggle with large supplies and cheap prices for competing meats. We may not see much price appreciation until exports get going.

Poultry | Chicken

Chicken output has been running 5% higher than last year. Small whole bird prices struggle to get much traction, possibly because of extra production from the new Costco plant.

Breast and Tenders:

Jumbo and medium chicken breast are a more balanced this week with most product trading at steady prices. Tender prices have dropped to where they were last year.

Wings:

Jumbo and medium wings prices have dropped down close to 2018 levels. Processors are still discounting to keep supplies moving.

Dark Meat:

Leg quarter prices are down to where they were in 2018 -- disappointing given expectations for more China demand. Leg and thigh meat prices are barely steady. 

Poultry | Turkey

Retail turkey ads are breaking with initial reports suggesting they are at about the same level as last year. Wholesale whole turkey prices have peaked at the highest level in almost three years.