Market Updates for July 29, 2022

Section Type

Dairy | Eggs

Large - Down

Medium - Up

Small - No change

 

 

 Retail demand fair. Supplies of extra large and large readily available. Market weak here.

 

 

 

 

 

 

 

 

 

 

 

Dairy | Butter

Butter- Up

 

Butter inventories remain tight and producers are saying that labor shortages are causing production runs lower than normal, and many think these labor issues are the new normal; retail consumption seems to be slowing a bit due to high prices, but demand remains seasonably steady for those using for production like ice cream.

 

Dairy | Cheese

Barrel - Down

Block - Down

The current fundamentals don’t represent the current downturn in the Block Market.  The microeconomics are providing pressure on the downside.  Food service hesitation has also been influencing the markets.  Current cheddar production has been light providing a supply element to restrict how low the market will move.

 

 

Grocery & Bakery | Flour

Pricing has dropped back to pricing similar to 5 months ago prior to the Russia/Ukraine war and continues to fluctuate day to day based on news of the Black Sea corridor opening for Ukrainian grain to ship out of the country and as the US Spring wheat crop rates 70% good to excellent. Winter wheat crop is still fairly low capping the downside price risk. Supply is still average which offers little chance of a large further slide but also less risk of large limit ups in pricing. 

Grocery & Bakery | Sugar

Beet sugar remains unavailable for both 2022 and 2023 for purchase beyond what we have booked for the new crop starting in October 2022. Cane availability is still a bit scarce and pricing firm on spot and into 2023 as we await crop results for this year. Imported cane sugar from Mexico should slowly start to enter the market in the next month or so but pricing continues to be at highs unseen in 30+ years. 

Grocery & Bakery | Frying Oil

After a sharp fall in futures values dating back to early June, the market has settled and been stuck in a sideways pattern since mid-July. Hot, rising temperatures heading into the critical pod-setting period for the soybean crop are pointing to higher prices. If the heat continues we can expect yield estimates to decline. After South America's shortfall earlier this year the rest of the world is depending on the US crop to materialize and at a minimum produce trendline yields. 

On the other side of the price equation, global economic pressure is mounting. Large companies are reporting a mixed bag when it comes to earnings and the Fed is meeting again to potentially raise interest rates another 75 to 100 basis points. The "R" word has been tossed around a lot lately and is underpinning the market.

By mid-August we should have a better idea of how weather has impacted the new crop and break the trade away from the tug-o-war between the two speculative force pulling on the market.