Market Updates for February 28, 2020

Section Type

Dairy | Cheese

The CME saw the bears return this week to being the Block market more in line with the current environment.  Speculators are looking to see how much farther down the market will go, but feel the ceiling it hit last week could continue to be a strong resistance.

 

Last week:

Block - Down

Barrel -Up

This Week:

Block - Down

Barrel -Up

 

Dairy | Eggs

 Retail demand fairly good. Extra large and medium well balanced to close. Market steady with an improving undertone.

Last week:

Large -No Change

Medium -No Change

Small -No Change

This Week:

Large -No Change

Medium -Up

Small -No Change

Dairy | Butter

Cream supplies for butter making is readably available at low prices despite the jump in last weeks’ spot pricing; butter production is ongoing, helping to clear large volumes of cream. In general, the butter market is in a bearish state as the current supply outpaces immediate needs from buyers. Bulk butter inventories are steadily increasing as most butter processors prepare for the upcoming baking season needs.

Last week:

Butter -Down

This Week:

Butter -Down

Grocery & Bakery | Wheat

Spring wheat (pizza flour) prices are 5-10% below last year due to fully adequate North American supplies. Tight durum wheat inventories are holding pasta flour prices 15-20% above last year.

Grocery & Bakery | Soybean Oil

Soybean oil prices have declined almost 20% since the beginning of 2020. Larger vegetable oil supplies, lower petroleum prices and, most recently, coronavirus fears have all weighed on prices.

Grocery & Bakery | Sugar

Beet and cane sugar prices remain firm as processors have little uncommitted sugar to offer. Refiners with access to imported raw sugar are increasing prices as they quickly sell through available supply.

Meat | Beef

The latest Cattle on Feed report shows that placements are slowing and the number of market-ready cattle is down from last year. The markets are ignoring supply data right now, however, as traders run away from cattle futures while coronavirus threatens demand worldwide. Cattle futures have dropped 10% in the last five weeks; beef prices are 3% lower. Futures reflect what the market fears could happen to demand while cash prices are actually doing pretty good despite 5% more beef supply.

Ground Beef:

Ground beef prices are looking for a bottom as packers struggle to place product. It is not unusual to see prices find seasonal lows this time of year.

Ribs:

Choice rib prices seem to have bottomed out last week as packers cleaned up inventory backlogs at discounted prices. While prices are a little higher this week the market is still well supplied.

Briskets:

Brisket prices continue to slide as we approach St Patrick's Day; extra supply is more than corned beef demand can absorb. 

Rounds:

Inside round features have been supportive so far; prices for other round cuts continue to trend lower.

Strips:

Strip prices have flattened out as big production temporarily swamps out seasonally improving demand.

Tenders:

Tenderloin prices recently hit an 18 month lows. Prices will likely find their seasonal low in the next few weeks.

Thin Meats:

Beef slaughter has picked up, which is boosting supplies of thin meats. The usual seasonal price uptrend has stalled.

Meat | Pork

With China's imports on hold as they restart their economy extra U.S. production has been diverted into domestic channels. Packers have slowed output to 5-6% above last year allowing pork prices to settle into a shaky equilibrium.

Butts:

Butt prices have leveled out near the lows made last year at this time. Boneless butts are especially cheap but Lent may limit near-term recovery.

Hams:

Bone-in ham prices are firming as Mexico and spiral ham processor compete for product. Boneless ham prices are also starting to improve.

Bacon/Bellies:

Belly prices are at 5-year lows and, with limited freezer space available, it might take additional discounts to attract buying.

Ribs:

Spare and back rib prices are adjusting lower but are still higher than last year.

Loins:

Bone-in loins prices are finding support at the current attractive price points; boneless loins are stuck at 5-year lows.

Poultry | Chicken

Chicken production is up 8% so far in 2020, with big increases in jumbo-sized birds and also come increase in small chickens due to the new Costco plant. Small whole chicken prices are at 5-year lows as product displaced by Costco's plant looks for a home.

Breast and Tenders:

Jumbo breast meat prices are firming on good food service demand. Ground beef prices are soft which suggests QSR features may have shifted to chicken. Medium and small-sized breast meat are steady. Tender prices are at the low end of where they usually trade this time of year, but are inching higher.

Wings:

Jumbo wing prices are mostly steady we wait for basketball's March madness demand to kick in. Medium and small wing prices are strengthening.

Dark Meat:

Leg and thigh meat prices are trending lower as new jumbo chicken plants add to supply.

Poultry | Turkey

Whole turkey prices are at firm with premiums for future delivery dates. Bone-in breast prices are mostly steady.