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F.A.B., Inc. Market Report
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July 30, 2010
Duffie Watson, Category Manager, ext. 5446
Midwest Canned Vegetables
PEAS
pack completed below budget- market firm
GREEN BEANS
pack in process below slightly behind budget, quality excellent market steady
WAX BEANS
projected at full budget-market steady
CORN
pack starting next week, excellent growing conditions but wet spring will cause longer harvest time in fields- market steady
LIMA BEANS
planting complete with concerns for crop due to wet- market firm
BEETS
Crop looks good with slightly below pack estimates- market firm
CARROTS
excellent crop with budget pack- market steady
POTATOES
Wet conditions have triggered late blight, crop is precarious- market tight
John Hawkins, Category Manager, ext. 5425
Pork:
Live hog prices were up from last week and are projecting steady to slightly higher next week. Hog supply will be tight until late September. The heat is affecting how hogs are moving as well as their weights.
Fresh pork supplies are snug overall due to lower production. This is holding the market firm despite lack luster demand. The pork cutout hit its highest level since June 1 on Wednesday of this week.
Hams are steady. Trimmings are holding firm. Bellies showed the lowest storage inventories seen since 1994 this week. They are firm now but are projected to be up through August. Butts should be up next week, then steady for a couple of weeks. At some point butts should begin to move up into Labor day. Bone in loins are steady and should hold there well into August. Boneless loins are steady but may move upward as we hit the middle of August. Bone in sirloin is steady and should hold there until late August. Spareribs are steady for now but should steady out in August. Cushion should hold steady.
Suppliers margin per head is still in the black but eroded a little from last week.
Beef:
Suppliers margin per head slipped into the red this week for the first time in quite a while. This could lead to reduced production if this doesnt reverse itself soon. If this occurs the market will firm rapidly.
The demand for grinds has finally cooled off and supplies are listed as adequate. Some discounting from quick ship has been noted. This isnt expected to hold as grinds are projected to start rising as we move into Labor day. Ribs and peeled tenders are seeing some negative pressure as well. Loins and strips are short and holding firm. Rounds are still holding steady but we could see some erosion unless production is curtailed. The chuck complex is steady overall. Briskets are projecting to come off next week, hold steady for a couple of weeks then move up in late August. On the whole the prompt lists appeared to be growing on Thursday.
Live cattle traded up a little this week from the previous week in the north, on Thursday. The call is for the trade to establish at steady to slightly lower levels this week. Futures were a little off from last week , as well.
In the export market, drought in Russia will reduce the grain harvest and will affect meat production. This could open the potential for export demand in the U.S.
Davy Ard, Senior Category Manager, ext. 5431
Seafood
News on the Gulf- On Friday July 23rd
NOAA updated the area closed to fishing in the Gulf. The area of Federal Waters now closed to fishing is 57,539 square miles. The area closed is now over 31% smaller than the week before. It has not been this size since the week of May 25th
. The area closed now represents an area just smaller than the state of Florida.
Gulf Shrimp- Market is steady. Demand is listed as weak.
Black Tiger Shrimp- Market is steady. Inventory is listed as improved but supplies are still listed as tighter than normal.
White Shrimp- Market is steady. Demand on smaller sizes is listed as weak while the larger sizes are still listed in good demand.
Snow Crab- Market is firm. Inventories are listed as tight.
King Crab- Market is firm. Inventories are listed as tight while demand continues to be good. Replacement inventories are listed as limited.
Salmon- The overall market is listed as steady. The exception would be Wild Kings that have supplies listed as very short for a good demand.
Snapper- Market is listed as firming. There are some reports of higher replacement costs.
Tilapia- Market is steady. The exception would be 3-5oz fillets from China that are listed as firm because of higher replacement costs.
Oysters- Market is firm. There are reports that meat yields per oyster are at an all time low.
Flounder- Market is firm.
Cod- Market is firm. Reports show higher replacement costs.
Halibut- Market is firm.
Dairy
Eggs
Shell Eggs- Market is steady. Retail demand is listed as good. Inventories are listed as up 1% from same time previous week. Smaller sizes appear to be in better supply than the large. It was reported that the heat this week has had some impact to overall production.
Sharon Bosley, Senior Category Manager, ext. 5457
Soybean Oil
Flour
Wheat futures have risen once again, climbing since midweek last week to their highest levels since last June. After a brief decline, basis levels on high protein spring wheat moved higher this past week. Continued worries about the depleted Russian wheat crop, along with the potential of larger U.S. exports, have driven up wheat futures in both European and U.S. markets. The outlook for the wheat crop in the U.S. is much better with estimated yields at or above last years levels. According to the USDA, the condition of the spring wheat crop domestically is considered outstanding and rated at 82% good to excellent.
Laura Kelly, Category Manager, ext. 5438
Chicken
First of the week, business and activity lacked any real interest. As this week comes to a close, activity has picked up some as buyers plan for first of the month business. Processors in the south continue to deal with lower birds weights as the heat has yet to let up. With Russia opening up their export business to the US, these items have taken on renewed interest and activity.
WOGs and whole birds have continued to remain steady after the recent downturn we saw last week. Boneless and tenders are steady, but have tightened slightly as this week closes. Breast fronts and whole breasts are just basic.
Wings are steady and trade at current market levels.
Turkey
The markets are pretty much the same as in the last week or two. Institutional sized breasts A Grade are short of full needs, with some sizes nonexistent. Values trend higher. However, under grades appear to be more available based on supplier. Tenders are also tight, and have been reported as trading at premiums.
Whole bird hens remain very tight. Toms have loosened up slightly in select sizes for delivery time frames of August through September.
**Graphs represent data for the week ending July 23, 2010.**
July 23, 2010
Davy Ard, Sr. Category Manager, ext. 5431
Seafood
Gulf Shrimp- Market is steady.
Black Tiger Shrimp- Market is firm. Supply remains tight and replacement product is slowly arriving.
White Shrimp- Market is steady. Demand on smaller counts is listed as weak.
Salmon- Overall market is steady with a few exceptions. On Wild Salmon, Kings are firm because of short supply and a firm demand. Chilean product is listed as steady to firming.
Scallops- Market is steady.
Snow Crab- Market is firm. Inventory is listed as tight with a firm demand.
Grouper- Market is firm.
Orange Roughy- Market is steady.
Whiting- Market is firm. Inventories are listed as tight.
King Crab- Market remains firm. Inventories remain short and replacement product is listed as limited.
Sea Bass- Market remains firm. Reports show that increased activity in Asia has caused the market to tighten.
Dairy
Cheese
- The market continued to firm through the week. Reports are coming in of the hot weather starting to take its toll on milk production. Production in the northeast is reported as being down significantly. Inventories are still listed as high but concern over production and the amount being exported could keep prices up.
Eggs
Shell eggs- Market is listed as steady. Both retail and foodservice demand is reported as average. Inventory on Jumbo and extra large are still listed as tight while other sizes are listed as fair. Total egg inventories were down 4% this week versus same time last week.
Egg Products- Market is listed as steady. Demand for whites and whole egg are listed as steady.
John Hawkins, Category Manager, ext. 5425
Pork:
The live hog market is steady with futures trending upward.
Hams are steady to firm. Bellies are steady to higher. 42% trimmings are steady to higher while 72% trimmings are more available. Butts are steady. Loins have fallen but should level out in August. Boneless loins are steady but should move up in early August as well. Sirloins are steady. Ribs are steady for now but are expected to turn upwards in August. Legs have seen export interest from Russia and are up but should pull steady when that diminishes. Cushion meat is steady.
Packers have reduced the kill as the hot weather is reducing the availability of market ready hogs. Leg pricing has worked supplier margins upward from last week.
Beef:
Live cattle pricing had not established on Wednesday but the call was steady to higher than last week.
Rounds are steady. We could see upward movement in early August then we can expect rounds to even out. Chucks should follow rounds overall. Briskets, being well sold out front, should move higher into August. Loins should be steady then move up in early August but then steady out by the end of the month. Ribeyes should be steady into August. Peeled butt tenders are expected to be steady through late August. Tenders are projecting steady as well. Strip loins are steady but should move up early August then steady out again. Ground beef should be up throughout August.
In the longer view, U.S. cattle inventory is reported to be at its lowest level in 51 years. This could bring on a rough fourth quarter for availability and price.
Sharon Bosley, Sr. Category Manager, ext. 5457
Nuts
Almonds Prices have declined due to softer shipments during the last two months.
Cashews Prices should remain at current levels through fall and holiday season.
Macadamia Nuts Available product is at record levels and typically low quality.
Peanuts Todays prices are firm and trading is in a narrow range.
Pecans Pricing firm, 2010 crop potential higher than normal for off year crop.
Walnuts Pricing at high levels with product in short supply. Expected late crop harvest.
Sugar
Prices are down from the thirty year highs, but still significantly above the last five year average. The world market will become clearer as more is learned about the Brazilian and Indian sugar crops which are the largest in the world.
Soybean Oil
This market is trending higher at Thursdays close, driven by a comeback in the palm oil market, the weak dollar, and a steadier performance on crude oil also added positive tone to this commodity. The tight old crop bean situation should trigger a drawdown position, however, oil stocks continue to trend higher due to outside influences.
Malaysian Palm Oil
The market has recovered all the loss from earlier in the week. The main force behind the recovery was crude petroleum. Technical buying also lent some support. The cash market remained active also, led by buying from India.
Flour
Wheat futures rose once again, surpassing the per bushel mark on both the Kansas City and Minneapolis exchanges. While futures continued to climb, basis levels on high protein spring wheat, declined once again. The U.S. is forecast to harvest as much winter wheat this year as in 2009. Concerns about drought and failed plantings in Eastern Europe and Canada may fuel additional world demand for U.S. exports. As wheat competes with corn for livestock feed, positive news about the corn crop could add downward pressure to wheat futures markets
.
Laura Kelly, Category Manager, ext. 5438
Chicken
Demand is slow and mostly just basic. Lower bird weights continue for some suppliers with the heat still hitting parts of the country. This could possibly effect future markets.
Currently most purchasing appears to be more hand to mouth.
WOGs and whole birds are unsettled and struggle to find a bottom. Markets have continued a downward movement this week. Could possibly see this pattern continue.
Boneless breast seem to have leveled off from earlier weeks decrease.
Tenders are about steady to steady.
Export contracts are being negotiated for frozen legs and leg quarters shipping into Russia in the next few weeks.
Wings are steady with adequate supply for near term ship dates.
Potatoes
Potato prices will more than likely see increases this year as acreage reports released below show estimated production decreases for this years crop.
National Agricultural Statistics Service (NASS), Agricultural Statistics Board, United States Department of Agriculture (USDA) Crop Production: Released July 9, 2010 called Idaho acreage at 295,000 acres planted versus United Growers field count below of 292,571 acres.
The two major growing regions show the following impacts (Yields for 2010 estimated by us using 4 years average yield; weighted more heavily to recent years):
Idaho planted acres down 7.8%; Idaho production cwt estimated to be down 12.4% [Idaho is coming off a record yield year)
Washington planted acres down 6.9%; Washington production cwt estimated to be down 7.5%
Production for Idaho estimated at 2008 levels and lowest levels in 4-5 years for Washington.
Cwt production well below sales on the Fry processing side.
Turkey
The turkey complex has been mostly quiet this week with activity modest.
Whole birds continue to be strong. If and when any product is secured its been at up money.
Institutional sized breasts are tight, with no additional inventory in sight for immediate ship.
Consumer sized breast activity is dull, but with limited product to sell, sellers are holding to market levels. Tom breast meat has traded at or above current market levels. Overall, white meat is tight.
Thigh meat is available, sometimes moving below market based on supplier.
Scapula and wing meat have traded at higher levels this week.
Whole wings are strong and trade at full market.
Duffie Watson, Category Manager, ext. 5446
Canned vegetables:
Across fruit and vegetable varieties the crop is still progressing well and there were no issues reported this week. Weather remains the primary factor in how the crop turns out in terms of finished product and the pricing for canned fruits and vegetables for next year. Tomato prices are already beginning to soften as predicted. Peas are not expected to be as plentiful as last year. Corn is doing well across canners. Green beans still have mixed reports depending on growing region. Pumpkin is expected to be difficult to source again this year. It is still too early for potatoes and beets. Peach canning is underway and so far things are looking well.
Imports:
With imports as well as factoring crop and tin costs, weather, transportation to ship across the oceans, the value of the dollar versus foreign currency, the time value of money, and product quality and safety play important roles in the pricing of imports. While many of these factors are currently favorable to lower pricing on some items others are seeing unfavorable conditions. Tuna, pineapple, and artichoke hearts are examples. While most of the factors are in line for lower pricing basic supply and demand and the lack of supply is causing higher prices that continue to escalate.
**Graphs represent data for the week ending July 16, 2010.**
July 16, 2010
Sharon Bosley, Sr. Category Manager, ext. 5457
Soybean Oil
This market has been steady to slightly up this week with outside markets lending support. The short supply situation in old crop soybeans gives support to the steady to rising soybean oil market. There has been little change in supply and demand, the perceived short supply situation is making everyone concerned and will keep this market steady to slightly up for the short run.
Soybeans
Soybean futures are expected to start Fridays day session higher, continuing the market's summer rally, buoyed by weather concerns and supportive outside markets. Overnight, CBOT August soybeans
were 7 cents higher at .04 1/2 and November soybeans
were 12 cents higher at .74. Analysts expect soybeans
to start 10 cents to 12 cents higher. The market is primed to follow up the strong overnight price theme, adding weather premiums to new crop contracts amid forecasts for potentially yield-robbing heat to return to the central U.S. next week. Weakness in the U.S. dollar, tight availability of nearby supplies amid strong underlying demand provides additional support to buoy prices. Weather models were in agreement Thursday morning, calling for ridging and the potential for building heat across the central U.S. in the last half of next week. The heat threat to soybean
crops as they move toward their critical development month of August are enticing traders to add risk premiums to prices. August is a critical time for soybeans
because that's when the plant sets pods and the beans
within them grow, ultimately determining the yield. The tightness of old crop inventories, the potential heat threat to 2010 crops coupled with a strong demand base opens the door for an expansion of recent gains as sellers remain cautious.
Flour
Wheat futures rose once again this past week, with the price per bushel hitting its highest point since January. After a brief uptick, Spring Wheat basis premiums had declined by mid-week. Concerns about declining wheat production due to adverse weather conditions in Russia, the Ukraine and Canada may be contributing to the market rally. Outside markets such as crude, gold, and a weak dollar may also be supporting the increase. Some believe that there is a link between the recent rally this month to short covering.
Laura Kelly, Category Manager, ext. 5438
Turkey
Whole birds are very strong with toms over the mid twenty pound weights and higher almost non-existent. If any product found, product is held at premiums, forcing the markets higher. All sizes are seeing higher quotes.
Institutional sized whole breasts very strong. Breast meat is trading at current market levels with steady movement. Wing meat, scapula and breast trim are well supported. Thigh meat is in balance. Demand for drums has slowed which is typical for this time of year. Wings, both whole and tom two joint are in close balance, to in some cases short.
Fresh and frozen MST and MSC see a downward movement in this weeks markets as suppliers are feeling the pressure to move product. Decline in Seasonal demand is evident.
Chicken
Demand remains pretty basic across most points of sale. Market is described as quiet and slow. Supply side is based more on a case by case scenario. Some suppliers are cleared as others are, or have shown some discounting to entice a sale.
WOGs and whole birds have seen a slight decrease as we near weeks end. These items have felt some pressure through the week and have had to discount to receive interest.
Whole breasts and breast fronts are in good shape. Canada remains a steady source for supplies to move whole breasts keeping these items stable. Tenders are about steady.
Davy Ard, Sr. Category Manager, ext. 5431
Seafood
Earlier this week NOAA extended the size of the area in the gulf closed to fishing in federal waters. As of July 13th
it was listed at 83,927 square miles. That represents an area larger than the sizes of the states of Kentucky and Tennessee combined.
Gulf Shrimp- Market is listed as softening. Demand is listed as down.
Black Tiger Shrimp- Market is listed as steady. Supply is listed as limited.
White Shrimp- Market is steady.
Snow Crab- Market is steady. Demand is listed as fair.
King Crab- Market is firm. Inventories remain limited.
Grouper- Market is firm.
Salmon- Market is steady.
Oysters- Pricing is listed as steady but at all time highs. Several reports show supply down by 75%.
Dairy
Cheese- The cheese market continues to firm. Some reports show concern of tighter fresh milk supplies due to the extreme heat of the past few weeks.
Eggs
Shell Eggs- Market is listed as steady. Retail demand is listed as good while foodservice is listed only as fair. Jumbo inventory is listed as tighter while other sizes are listed as good.
John Hawkins, Category Manager, ext. 5425
Pork:
The pork market is steady with last week but still well above what we saw at this time last year. May was a good month for exports compared to last year but keep in mind last year we were in the throes of the HINI crisis. Export demand has been softer recently. There are mixed reports on live hog availability with some reporting ample supplies but others reporting difficulty sourcing. Live pricing was off slightly from last week on Wednesday.
Hams were weaker this week with less demand both domestic and export. The supply of trimming was tighter this week with discounting working to reduce inventories. Bellies traded a little up this week but they should steady out into August. We could see some upward spurts in August. Spareribs were unchanged. The call is for butts to hold steady then decline some in the first part of August. Bone in loins, which strengthened last week are settling down again and should steady out for a couple of weeks. Bone in sirloins should follow a similar pattern. Boneless loins and sirloins should be steady for the next few weeks. Legs are weakening with export demand cooling off.
The suppliers are still in the black at these levels. The overall market is steady to down on certain cuts. Production schedulers once again appear to be doing a pretty good job of gearing down production to post holiday demand. We may see some short lived dips in the market on some cuts but not the crash that we often see after a holiday.
Beef:
The box beef market was steady on Thursday. Live cattle moved higher with increased demand and higher futures pricing. Live cattle should tighten in August.
Duffie Watson, Category Manager, ext. 5446
Canned goods:
Fruits
Apricots are in and reports so far are that this was a good pack year. There have been no reports of issues with Apricots.
Peach pack has begun and we are a few weeks from new crop rolling out. Expectations are for another year of budget packs for canners. It is still a little early for a definitive statement on all sizes and styles of peaches but so far canners are expecting a good year.
For apples it is still very early but canners are already beginning to show a slight pessimism for this years crop. Last year saw an abundance of raw product in all parts of the country and the result was dramatic price decreases. There are signals that a smaller crop this year will result in prices moving higher than current levels.
Vegetables
Wet cool weather across the country has pushed backed or delayed crops along one or more of the planting, harvesting, processing phases. So far peas are being reported at less than full canner budget. Green beans are being reported with mixed expectations across the canners but nothing has been reported yet to cause alarm. Corn is reported as doing well.
Imports:
Tuna finishing bans in the Pacific for sustainability reasons are the big news in imports this week. The ban was extended by a full month taking it through September. Pricing for finished goods for tuna will not see relief for some time and continued prices increases are likely.
**Graphs represent data for the week ending July 9, 2010.**
July 9, 2010
Sharon Bosley, Sr. Category Manager, ext. 5457
Canola
Overnight gains in Malaysian palm oil
futures along with calls for a slightly firmer start for CBOT soybeans
were also providing some underlying support for canola. However, an analyst noted that soybeans
were not seeing the same follow-through strength as canola. He said generally favorable US crop conditions and positioning ahead of Friday's USDA supply/demand report may keep that market relatively subdued, which would limit the upside in canola
as well.
Soybeans
Soybean futures are expected to start Thursday's day session higher, following through on overnight price strength and underlying demand. The market is supported by concerns about crop conditions and strong underlying export demand. The market soared Wednesday after weekly crop ratings dropped, enticing traders into adding risk premium to prices on fears heavy Midwest rains have taken some yield potential off the 2010 crop, analysts said. Tight availability of old crop stocks in the face of solid export demand is seen keeping prices underpinned as well.
Palm Oil
Crude palm oil
futures on Malaysia's derivatives exchange Thursday pared losses after hitting an eight-month low Wednesday, buoyed by a rally in soybean
futures in Chicago on speculation that heavy rain would reduce yields in the U.S., improving demand prospects for palm oil.
Soybean Oil
Flour
Wheat futures continued their climb on all three exchanges. Conversely, basis levels have continued their decline. The dollar index is traded lower; some believe this is supporting upward movement in the agricultural markets. Corn is trading higher based on crop concerns. This adds bullish momentum to wheat. Spring wheat condition is rated significantly higher this year with 83% of the crop in key states rated good to excellent compared to 72% at this time last year. USDA Reports due Friday; most expect bullish news of declining wheat production in Canada, Europe and Russia.
John Hawkins, Category Manager, ext. 5425
Pork:
The market is pretty steady considering we just came off the fourth. The production schedulers have done a good job recovering from the down time by making up the supply a little each day thereby avoiding a lot of potential volatility.
Some say butts will hold steady others predict barely steady to weaker. Bone in loins are in tighter supply and could move higher for a couple of weeks then even out. Boneless loins are steady along with Bone in and boneless sirloins. Spareribs should show weaker for a couple of weeks then even out. Legs have garnered some export interest and are showing higher. This should not hold. Bellies are up right now but should level out before August. Cushion meat is steady but increased demand could move it up as we move through July. Trimmings are tight.
All in all, no crash after the fourth, just a little dip that should smooth out quickly.
Beef:
Live cattle traded up from previous week on Thursday. The volume of trade improved on Wednesday due in large part to scattered discounting by suppliers to create interest.
Chucks are steady. Rounds are still mostly down. Eyes and peeled knuckles are steady with the latter receiving support from foreign markets. Loin meat is steady. Top Butts, Short loins and strips could move downward before the end of the month. Grinds are steady but could also come off before August.
Davy Ard, Sr. Category Manager, ext. 5431
Seafood
Earlier this week NOAA expanded the size of the area in the Gulf closed to fishing. The area of Federal waters closed is now larger than 81,000 square miles. In comparison this represents an area larger than the size of the states of Virginia, West Virginia, Maryland, and Delaware combined.
Gulf Shrimp- Market has become more stable as the demand has become weaker and the supplies have increased.
Black Tiger Shrimp- Market remains firm. Larger count shrimp are reported in short supply.
White Shrimp- Market is listed as steady
Salmon-Market is listed as steady.
Snow Crab- Market is firm. Supplies are listed as tight while demand is listed as heavy.
King Crab- Market is firm. Supplies are listed as tight while replacement product is listed as limited.
Tilapia-Market is firm. Inventory levels are listed as low.
Lobster- Market is steady.
Dairy
Butter- Market remains firm. Churning activity last week was listed as improved from previous weeks activity. Overall demand is listed as trending down.
Eggs
Shell Eggs- Market is firming. Retail demand is listed as good. Promotions are still active but lighter than the past few weeks. Larger sizes are listed as tighter while mediums are listed as steady. Total egg inventories are listed as down 5% from previous week.
Egg Products- Market is steady.
Laura Kelly, Category Manager, ext. 5438
Chicken
Markets this week seem to be more mixed as far as demand as well as supply. Conditions related to the heat on the east coast continue to affect both suppliers and buyers on their approach on out front negotiations.
WOGs and whole birds are holding at current market levels, more so due to supply as demand is just average.
Breast fronts and whole breasts trade at current levels and are well supported. Tenders are balanced with demand not as aggressive as recent activity.
Dark meat is just average with most activity coming from retail, mostly on drumsticks. Thighs and leg quarters are rated as about steady to steady.
Duffie Watson, Category Manager, ext. 5446
Canned Goods:
Tuna, pineapple, and weather are the hot topics in canned goods for the week. Supplies of tuna and pineapple are continuing to constrict and sourcing difficulty is leading to continued higher pricing. Domestically, excessive rain is causing some issues with vegetables for canning in terms of planting and harvest delays. Delays in either area create a situation of less than budgeted crop yields which ultimately lead to sourcing issues and higher prices for the finished product.
**Graphs represent data for the week ending July 2, 2010.**
July 2, 2010
Sharon Bosley, Sr. Category Manager, ext. 5457
Soybean Futures
Soybean futures are expected to begin Thursday's day session firmer, stabilizing after Wednesday's setback on residual support from higher grain futures and dryness concerns in the U.S. Delta. Firmer overnight prices serve as an early signal of price direction. Overnight, Chicago Board of Trade July soybeans
were 1 1/2 cents higher at .50, and November soybeans
were 1 1/2 cents higher at .04. Analysts expect soybeans
to start 2 cents to 3 cents higher.
Soybean Oil
This market has been quiet this week, overall trending lower due to outside market influence. Continuing concerns about European economic recovery plans, jobless claims, and overall weak outside markets led to the sharp downward trend on Wednesday. Market opened stronger on Thursday and should see slight increase. Dont expect big move in soybean oil. Market should hold steady to down through holiday weekend.
Malaysian Palm Oil
Davy Ard, Sr. Category Manager, ext. 5431
Seafood
Earlier this week NOAA expanded the size of the area closed to fishing in the Gulf to include 80,228 square miles. This represents an area the size of the state of Kansas.
Gulf Shrimp- Market is firm. Good catch rates have been noted in western parts of Louisiana and has helped improved some inventories. Demand has eased slightly and pricing pressures are expected to ease on some sizes.
Black Tiger Shrimp- Market is firm. Supplies are still listed as tight and short.
White Shrimp- Market is listed as steady.
Snow Crab- Market is firm. Demand is listed as good while supplies are listed light.
Salmon-
The Chilean market is listed as steady with supply looking better for only a fair demand.
The European market firmed across the board as inventories are listed as tight.
Wild Salmon markets are listed as weak.
Mahi- Market remains steady.
Dairy
Eggs
Shell Eggs- Market is listed as steady to firming. Retail demand has picked up across the country. Foodservice demand is still listed as active. Overall inventories dropped versus the previous week by 8%. Demand has increased on the larger sizes and has caused inventories to tighten.
John Hawkins, Category Manager, ext. 5425
Pork:
Live hog pricing was steady to weak as holiday needs appear to be covered. Futures also weakened slightly. The slaughter was also down slightly from last week. Hog weights dropped slightly from last week. Supplier margin, while still positive, did erode somewhat.
The call is for Butts to decline for a couple of weeks and then pull steady. Loins both boneless and bone in should hold fairly steady for the next two to three weeks. Bone in sirloins should hold steady for the next three weeks or so also. Spareribs should come off over the next couple of weeks then steady up although you can expect them to trade in a wide range from supplier to supplier dependant on how well they sold up for the fourth. Bellies should be steady for the next 3 weeks or so. The call on cushion meat is down for the next couple of weeks and then steady until late July. Asking prices for ham was slightly higher on Wednesday and Thursday but the call is mostly steady in the short run at least. Trimmings were trading mixed on Wednesday afternoon. 42% trim was unchanged while 72% was discounting, supply being readily available. The call is for the trim market to be soft for awhile.
JBS Swift has expressed an interest in purchasing Smithfield. If this were to happen, they would control 40% of the hog slaughter. The federal regulatory agencies would probably have something to say about this as they did with their attempt to purchase National in the beef industry. Time will tell.
Beef:
Live cattle traded mostly steady with the previous week. Cattle weights held fairly steady with last week.
The round complex continued under pressure with discounting seen. This should steady out after the fourth. Middle meats are mixed. There was some scattered reductions noted on Rib meats on the trade levels on Wednesday. The call is for them to fall some after the fourth then steady for a couple of weeks. Strip loins are well supported and firm for now. They may fall after the fourth then be steady to down for the next couple of weeks. Briskets are well sold and steady. Might see some short lived reductions after the fourth but then it should steady out. The chuck complex was down on trade at the end of the week. This should hold until after the fourth then it should steady out. Grinds were steady this week. With a short production week next we can expect some increases through the fourth. After the pipe line refills the market should go steady on grinds..
Laura Kelly, Category Manager, ext. 5438
Chicken
The heat in the south continues to put a damper on live bird weights. Birds continue to come in light therefore less product availability. Demand appears to be basic with offerings limited. Majority of plants will be closed on Monday in observance of the holiday. With last weeks announcement of the Russian ban lifted, (although no date set yet) dark meat seems to have a renewed interest. Export markets little by little are starting to inquire about future ship dates. This could influence future steadier market levels.
WOGs and whole birds are steady and trade at market. Whole breasts and breast fronts are in balance. Tenders and cutlets remain full steady with limited product availability.
Wings are well supported and continue to see market increase this week. Leg quarters, legs and thigh meat have cleared and have become steadier as
June 25, 2010
John Hawkins, Category Manager, ext. 5425
Pork:
The kill was up slightly from last week but still below this time last year. Weights on live hogs are about even with last year
Hams were steady on Wednesday with limited availability. Bellies and trimmings were unchanged with limited trade. Loins were steady to higher at midweek and Butts were firmer. Spareribs are steady.
Suppliers are making money at these levels so kills should hold. The call for the market overall is steady to up through July 4th
and steady to weaker on some cuts after that. Frozen pork inventories are at their lowest levels since Dec. 2007 so which items fall should vary based on inventory positions.
Beef:
Live cattle traded steady with last week. Live steer weights are up from last week but still below this time last year. Pundits had been predicting that live cattle would hit the low point for the year in August in the upper .00 cwt range but recently they have revised this and are calling for the low to come in late July.
A major supplier raised their price on strips, short loins, Ribeye and export ribs by $.10 a pound Wednesday afternoon reflecting a well sold position through the 4th
. Most middle meats will be firm through the 4th
reflecting increased retail demand. Grinds are steady but could see some upward spikes before the 4th, then level off quickly after the pipe line refills. Rounds are off overall but should stabilize over the next few weeks. Chucks should be steady with perhaps some weakness after the fourth. Briskets retained a well sold out front position.
Sharon Bosley, Sr. Category Manager, ext. 5457
Sugar
The white sugar
premium paid over raw sugar
prices has hit a record high but should begin to ease as more raw sugar
enters the market. The sharp rise in the white sugar
premium this year has been driven by a disconnect between the fall in the raw sugar
futures market and domestic sugar
markets, which have remained stubbornly high. While raw sugar
prices have fallen in anticipation of a return to a small surplus in the 2010-11 season, white sugar
prices have risen and remain firmly rooted in the present spot supply problems. The combination of the two has prompted the white premium to rise to record levels. White sugar
prices remain stubbornly high because refineries have run down their inventories as a result of a supply shortfall in 2009-10 and are struggling to meet demand.
Flour
Recently, bushel values have appreciated while mill feed values have declined. All forces have led to increased flour pricing. The current rally in the wheat market is related to a lower US dollar, fueling short covering by commodity funds. High protein spring wheat basis levels have increased once again the past several weeks after a temporary decline. Wheat futures prices are also back to their early-May levels. Canadas wheat producers have been dealing with soggy weather and flooded fields, leading to as many as 3 million acres of cropland intended for wheat to go unplanted.
Soy Oil
Laura Kelly, Category Manager, ext. 5438
Chicken
Summer officially started this week and the heat has already started to effect the market. Excessive hot and humid conditions in the south have hampered live birds weights with average weights not meeting their targets. This has caused most lines to be firm although demand is just average. Some items are tighter than others, mostly in the front half of the bird, where white meat items are limited in supply.
WOGs and whole birds rated as full steady. Whole breasts and breast fronts trade at market. Boneless and tenders have seen increases this week and could continue based on next weeks temperatures. Cutlets well cleared.
Wings have tightened up and saw a slight increase at weeks end. Dark meat is rated as about steady.
Davy Ard, Sr. Category Manager, ext. 5431
Seafood
Thru mid week this week the total area closed to fishing in the Gulf has remained pretty much the same. On Thursday NOAA announced that it was opening another 8,000 square miles that had been previously closed.
Gulf Shrimp- Market remains firm.
Black Tiger Shrimp- Market remains firm. Reports still show limited imports and delays in oversea shipments.
White Shrimp- Market remains firm. Larger sizes are still listed as tight.
Snow Crab- Market is firm. Demand is listed as good.
King Crab- Market is firm. Replacement inventory is listed as very limited.
Salmon- Market is steady. Demand still appears to be soft.
Mahi- Market is steady.
Chilean Sea Bass- Market is listed as steady. It was noted however that overseas pricing is firming and more product is moving in those directions.
Dairy
Eggs
Shell Eggs- Market is listed as steady. The market leveled off this week after sliding downward for 3 straight weeks. Inventory at the start of the week was up slightly as compared to the previous week.
Duffie Watson, Category Manager, ext. 5446
Canned Goods
Imports:
Tuna:
Authentic skipjack tuna from third party audited sources are carrying prices for overseas arrival that are significantly higher prices than the product that is already in the country. Tuna prices in the States have adjusted to much higher levels. Other species of fish are being sold in the market with very attractive prices but the quality is not the same. Again this week and going forward vigilance in regards to quality standards should be considered.
Pineapple:
It is very difficult to source product. The product is not readily available. El Nio is to blame for the small crop harvest in Thailand. It is expected to be the smallest harvest in 5 years. Summer is from May through July in Thailand and the harvests so far reported from the summer crop and the forecasts going forward from the Thai Food Processors Association are for greatly reduced crops. Higher temperature and lack of rain from El Nio is delaying the crop and is to blame for a 50% less crop for May and June versus last year. These delays further compound things as the rainy season will be delayed pushing back the November/December winter crop.
Domestic
:
Apricots will be coming available within the next few weeks. Tomatoes are still in the air in terms of pricing. Peas, green beans, and corn are being harvested and processed now. Beets and potatoes are allocated or completely withdrawn with all canners.
**Graphs represent data for the week ending June 18, 2010.**
June 18, 2010
John Hawkins, Category Manager, ext. 5425
Pork:
Live hog pricing moved up some at midweek. It had been virtually unchanged from last week. The market is largely unchanged. July 4th
demand has not kicked in yet on most cuts.
Hams moved a little lower despite healthy sales to Russia and Mexico. Butts were supposed to start firming but it hasnt happened yet. We may see some upward pricing for a week or so and then we will be in the post 4th
slump. Cushion is steady. Bellies are unchanged. Trim is mixed with 42% being available and weaker and 72% holding steady. Bone in loins are unchanged while boneless ticked up. Spareribs are staring to increase in response to the 4th
. This should fade around the 4th
however.
Demand for fresh pork is still weak overall. While margins eroded somewhat this week they are still in the black.
Beef:
The price of live cattle is down slightly again this week and the call is barely steady for next week. There is little change from last week as suppliers wait for the 4th
of July demand to kick in.
Grinds were on prompt earlier in the week but firmed up by midweek. This should continue through the 4th
. Strips have stabilized but tenders showed some weakness this week. Ribs are steady. Rounds should be up slightly and level off moving into the 4th
. Chucks and briskets are well sold out front and should see upward pressure.
Packers margins have dwindled dangerously close to break even. Cattle weights are steady with last week but below last year
Davy Ard, Sr. Category Manager, ext. 5431
Seafood
As of June 17th
NOAA has updated the area closed to fishing in the Gulf to include 33.4% of the Federal waters. This is down from the 37% from just over a week ago.
Gulf Shrimp-Market remains firm. Demand remains strong.
Black Tiger- Market remains firm. Reports show Vietnams production running behind.
White Shrimp-Market remains firm. Larger count remain tight.
Tilapia- Market is steady.
Snow Crab- Market is firming. Supplies are tightening as demand has increased.
Salmon- Market is listed as softening. Supplies have increased as demand has fallen.
Grouper- Market is steady.
Mahi- Market firmed slightly earlier this week.
Lobster- Market is firm. Fathers Day is reported as being the busiest time of the year for retail sales.
Dairy
Cheese- The market leveled off this week after experiencing a few weeks of softening. Pricing remains above same time last year but well below the numbers seen in 2008. Production continues strong and inventories are reported as increasing with some manufacturers. Cheese exports were listed as record amounts for both March and April. However, export interest should slow if the dollar continues to build strength.
Eggs
Shell Eggs-Market remains weak. Demand in Retail is listed as fair while Foodservice is listed as steady. Supply appears to be larger than current demand. The market is expected to level out over the next few weeks as retail demand is expected to improve
.
Egg products- Market is steady. Inventories are reported as higher compared to same time last month but still well below same time last year.
Ron Doyle, Category Manager, ext. 5406
Non Foods
Pulp pricing continues to be strong some 25 points over same period a week ago and 40% higher than a year ago. This will keep napkin, tissue, and all paper board items up.
Resin is starting to soften, cup (PS-CHH) cutlery (PP-HIGP) market still holding , but liner and film wrap (PE-LLD) took a six point drop compared to last week. That is still 19 points higher than same period a year ago. Pricing will remain firm until further declines.
Sharon Bosley, Sr. Category Manager, ext. 5457
Nuts
Peanuts
- 2008 crop was a record crop resulting in a large carry over. 2009 crop production declined by about 28%. Market strengthening now that the carryover has been shipped.
Pecans
- Weather for 2010 crop development has been favorable thus far. The potential exists for this to be a better than average short crop due to good pollination, dry spring weather and good rainfall in late May and early June.
Walnuts
- The CASS final harvest report was for 436 thousand in shell tons. Most growers are cautiously optimistic this crop will be larger than last year as all varieties look good.
Macadamias
- Shipments continue to be late from all origins. Packers in Australia report disappointing yields and volume from early shelling.
Soybean Oil
Outside markets continue to have strong influence on soybean oil, slight dip in market based primarily on poor export sales, higher jobless claims and the Senate decision not to pass biodiesel subsidy bill. Look for this market to remain choppy for the short term. Continued talk of possible smaller than expected acreage in the June 30 report could keep buyers interested in the new crop soybean market.
Duffie Watson, Category Manager, ext. 5446
Canned Vegetables:
All eyes are on the weather. The converse of the last few years is occurring this season, as many vegetable growing regions are dealing with rain rather than a shortage of water. Too much rain can delay the planting and harvesting phases as well as affect the grade of finished product through size, color, and defects. In the last few weeks some areas have experienced heavy rains and some slight delays to plantings and harvest have occurred. Peas so far seem to be progressing well. Green beans, corn, and tomatoes are having weather related issues but none are being reported as harmful to the overall budget yet. No canner yet has expressed the possibility of shortages due to the rain. It is a mixed bag of forecast with the ultimate result of it being too early to tell.
Imports:
June 11, 2010
June 4, 2010
John Hawkins, Category Manager, ext. 5425
Pork:
Live prices were down from last week although they are still up significantly from this last year at this time. Futures are trending upward.
Hams values were a little weaker at midweek. Sharp declines were noted on bellies but the call is that they will settle out and remain steady into July. Fat trimmings were unchanged but lean trimmings were firm. Loins are steady with some weaker offers from suppliers with surplus quantities. They should move up into the fourth. Butts have shown renewed interest and should move up into the 4th
. Cushion meat should follow Butts. Ribs are steady for now but should follow butts soon in the climb towards the 4th
of July.
Suppliers are still in the black at these levels so kills should hold.
Beef:
Live cattle prices were down from last week but are still well above what we saw this time last year. Futures which had been slipping are showing a little strength now.
Grinds appeared on prompts this week and values are down temporarily. This should evaporate quickly as we move into July. Knuckle and rounds traded slightly lower at midweek. Knuckles should hold steady the rest of the month. Insides should move downward some as we approach the end of June. Chucks are steady. Brisket are well sold out front although steady right now they should move up some as we approach July. Ribs are holding but should start up as we approach the 4th
. Loins were thought to be at the bottom but they have continued to weaken. The call is that these will move up with the approaching holiday as well.
The % of kill grading choice came off a little more. The packers are still making money at these levels aided by higher drop credits than last year. Production should hold.
May 28, 2010
John Hawkins, Category Manager, ext. 5425
Pork:
Live hogs are trending lower. There is poor demand due to reduced production. Fresh pork prices have been falling all week. Hams quoted higher with limited production. Bone in loins vary from supplier to supplier. Boneless loins ,Butts and spareribs are all weaker. The overall market is falling. Pork suppliers are still making a little money at these levels. We should see some upward movement after the holiday moving up into the 4th
of July.
Beef:
Live cattle traded lower this week. The futures market has been down for a few weeks and this is now filtering into the live market. Cattle weights are still coming in light compared to last year. With the short kill next week grinds and outside cuts should remain firm. Loins are weak. All major cuts in the loin section of the carcass traded lower on Wednesday. Butts are falling off as well. Middle meats in general dominate the prompt lists. Brisket, chucks and flats are still weld sold out front.
Davy Ard, Sr. Category Manager, ext. 5431
Seafood
Gulf Shrimp- Market is very firm. Supplies are light and pricing continues to push upward.
Black Tiger Shrimp- Market is firm. Supplies remain tight.
White Shrimp- Market is firm. Supplies on larger sizes remain tight while smaller sizes are listed as steady.
Salmon- The market firmed up this week with many suppliers starting to allocate product. Several suppliers are not taking new business at this time as they try to take care of current customers.
King Crab- Market is firm. Supplies are listed as short while replacement product is limited.
Snow Crab-Market remains steady.
Oysters- Market is firm. Supplies continue to tighten and reduced yields are being reported.
Grouper- Market is steady.
Mahi- Market is reported as steady.
Dairy
Cheese
Block Market- The market continues to inch up. Seasonal trends point towards some possible market relief over the next few weeks.
Barrel Market- The market moved up slightly for the 5th
straight week. Reports point towards relief after Memorial week.
Butter- The market softened slightly again this week. If seasonal trends are any indicator we should continue to see the market hold steady for the next few weeks before it starts the seasonal climb.
Eggs
Shell Eggs- Egg pricing inched up again this week. Market is listed as firming. Seasonal trends would point towards a firmer market over the next few weeks.
Egg Products- Market continues to firm as reports of lower supply versus a higher demand have been reported.
Sharon Bosley, Sr. Category Manager, ext. 5457
Flour
Wheat futures have been trending down for the past two weeks. This week, U.S.D.A. rated U.S. winter wheat crop 66 percent good to excellent. This is up from last years 45 percent. Corn and wheat prices have moved closer, raising the chances of increased wheat feeding. Basis premiums for high protein spring wheat were higher this week. Look for market pricing to increase based on increased basis strength. Recent rumors of China building corn stocks is being watched closely; for the first time in a decade China has become a net importer of corn.
Soybean Oil
Strong outside markets continue to influence the soybean oil market. The market is trending up this week due to higher crude and other energy commodities that are trending higher. This market should end the week higher based on renewed buying interest in futures and export sales.
Laura Kelly, Category Manager, ext. 5438
Chicken
Activity has been just fair and movement mostly flat majority of this week. Buyers appear to be in hand to mouth buying pattern for the most part. Inventory levels appear to be mostly balanced.
WOGs and whole birds are no more than steady. Whole breasts and breast fronts are in good position and trade at market. Tenders seem to have tightened up and getting hard to secure.
Dark meat items domestically has seen more activity, as holiday retail ads helped with this movement.
Wings are fair and remain about steady.
Duffie Watson, Category Manager, ext. 5446
Canned
Imports:
Right now long range planning for imports is a guessing game. The Euro which is a key driver of import pricing is on a roller coaster ride. Almost across the board can prices to the manufacturers are increasing. Crop yields and catches are shrinking due to weather and other factors but demand is relatively unchanged. A quick look at what is happening with some of the more popular imports:
Pineapple: Thailand is experiencing price pressure due to significant raw material cost increases and can cost increases. Other countries of origin are also experiencing cost increases. Prices are expected to increase. Sourcing is difficult between packs.
Tuna: prices are expected to stay at current levels or increase as raw material costs are driving prices upward for skipjack, Tongol, and albacore. Fishing restrictions and weather are the culprit.
Mandarin Oranges: There is no indication that there is excess supply of mandarin oranges from this years crop. Pricing is expected to remain steady.
Mushrooms: China had a very short crop and India has had production problems of their own. Firm pricing is expected to continue for mushrooms.
Canned Vegetables
Domestic:
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