This week started slow with not much activity.  As we approach week’s end, activity has picked up some and has shown signs of  improvement.   Retail adds as well as first of the month, has contributed to the improved activity, as helped clear up inventory on select items.

 

WOGs and whole birds are in balance and trade at current market levels.  Breast fronts and whole breasts also well supported, markets remain secure as

The Canadian demand as kept these items steady.  Cutlets are tight on mostly the smaller sizes.  Jumbo product much easier to secure.

 

Dark meat is maintaining a steady undertone.  The exception though is drumsticks and thigh meat, where markets dropped a notch to entice some activity.  Negotiations are still  under way with Russia on exports.  The industry believes this will be resolved in the very near future.  On the other hand the industry has also found other export channels to move dark meat regardless of outcome.

 

Wings seem to be holding steady, after taking some downward turns right after Super Bowl.  March Madness should keep these markets steady for a little while. 

Retail demand has picked up from last week. Supplies of large and extra large are tight. Mediums are in balance. Brown eggs have become more available.

Wholesale buyers are reported to be building inventories for Easter. This is always a difficult task with perishable product, balancing you needs against having old inventory left after the holiday. Further processors are seeking breaking stock as also. Liquid whole egg is firming as supplies are moving into shell egg channels at nice margins. Dried white demand has improved. Asking prices are firm as processors attempt to recapture costs.

The North East Urner Barry for Thursday was at $1.35 per dozen on large which is $.16 per dozen above last week. Mediums were at $1.16 per dozen which was up $.10 per dozen from the previous week.

The market is firm.

 

Packers are reported to be well supplied on live hogs for current production. Suppliers of live hogs are still light and interest could develop for deliveries into next week. Pork market is expected to be steady overall in March. Pundits are predicting the market to go up $.10-$.15 per pound overall in April.

Loins will be steady to slightly up in March. Butts will be steady and are believed to be close to the bottom for now. Spareribs and back ribs are expected to tick up gradually. Hams are still tight and prices are running above the 3 year average. Exports to Mexico are still propping up this market. Bellies are still tight. They are moving into cold storage and production is tight.

Packers were reporting a positive margin of $2.46 per head on Wednesday. Pork has been considered a real value relative to beef for some time now but this advantage has now evaporated to a large degree.

The market is steady.

 

The asking price for live cattle was $94.00 cwt. Bids at $89.00 to $90.0 were unanswered.  The current undertone for this week’s trade of live cattle is steady to slightly off. Last week’s live traded at $90.00 to $92.00 cwt.

The tone of the market is mixed. End cuts saw some discounting. Middle Meats continue strong. Strips and butts edged higher. Grinds are expected to soften a little over the next few weeks but nothing drastic is expected as trimmings continue to run above the three year average. Strips are said to be at their low point and are expected to move up as we move into the grilling season. Ribeyes are projecting up to the $5.00 level in April. They should move down into $4.50-$4.85 range in May and June and move sideways in July. End cuts should fall in March and April so there is downside potential here. The federally inspected slaughter was reported to be 11,000 head less than the previous week and with cattle continuing to run light this means a reduced beef supply. It has been reported that the beef supply per capita is the lowest it has been since 1952. This is being countered by reduced demand which is not expected to tick up until the second half of the year. One thing that is hard to figure is the high percentage of cattle that are grading choice. The harsh weather that lowers cattle weights usually lowers the grade as well but we are not seeing that. The high percentage of choice cattle actually moved the choice/select spread to even. The spread re-established at $1.75 cwt. in favor of choice on Wednesday which is still way below average so choice is a value to select right now. Packers were reporting a positive margin of $28.60 per head. One thing to watch is export demand. With supply this tight any export demand will have an immediate impact on pricing. Beef exports are projected to be up 8% in 2010.

The market is mixed now. Middles are strong, grinds are steady and end cuts are weakening.      

 

The block continues to move off slightly. It opened on Monday at $1.34, held on Tuesday and moved down to $1.32 on Wednesday. The Monday through Wednesday average was at $1.3333 which was down $.0357 from last week’s close of $1.3690. The barrel followed the same pattern opening at $1.29 on Monday, holding on Tuesday and falling to $1.2825 on Wednesday. The Monday through Wednesday average was $1.2875 which was down $.0415 from last week’s closing average of $1.3290.  Non Fat Dry Milk grade A held steady at $1.12 from Monday through Wednesday which was dead even with last week. Non Fat Dry Milk extra grade opened at $1.24 but was unable to hold. It fell to $1.12 on Tuesday and held there on Wednesday. The Monday through Wednesday average was $1.16

Which was $.08 below last week’s closing average of $1.24.

 

Canola contracts on the ICE Futures market finished Thursday's session on the defensive with the double-digit losses in CBOT soybean and soyoil values stimulating the downward price slide.  The Canadian dollar's strength early Thursday also helped to spark some of the selling interest.  The advancing harvest of record European soybean crops contributed to the weakness  also.  Talk of increased canola area this spring along with a jump in U.S. soybean plantings, also were considered undermining price influences.  The losses in canola were tempered early in the session by the gains seen overnight in Malaysian palm oil futures. Reports of Canadian canola export business to Pakistan for an unspecified delivery date also helped to generate a firm price floor for the commodity.

Soybeansand Soy Oil

CBOT soybean futures tumbled Thursday, backpedaling to their lowest levels in three weeks on broad-based commodity weakness and a lack of fresh supportive news.   CBOT March soybeans ended 22 cents, or 2.30%, lower at $9.32 1/2, and May soybeans settled 21 1/2 cents, or 2.23%, lower at $9.42.   The bearish influence of a stronger U.S. dollar, an advancing South American soybean crop harvest and limited export interest served as the underlying drivers of the day's losses.   The lack of support for the soybean futures market has contributed to the rise and subsequent decline in the soy oil market this week.   A pick up in  hedge selling during the day yesterday also contributed to the weakness of the soy oil market, as did the advancing harvest of the record sized soybean crops in Brazil and Argentina.  The soy oil market is trending up over last week, although the futures market  remains weak.

Paper and Pulp seems to be holding steady to slightly up.

 

Resin market has introduced their fourth increase in 2010.  Price pressure continues on stretch film and plastics market due to these increase.  The primary drivers for this price increase are strong, continued exports of polyethylene combined with rapidly escalating prices of ethylene, the main building component of polyethylene products. Ethylene prices are rising due to ethylene production facility shutdowns, and limited supply.

 

Foil/aluminum market is steady to up.

Canned Goods:

Demand seems to be holding steady for canned vegetables.   Potato and beet supplies continue to tighten, as been expected, but some other items are beginning to hint at pressure. Unique items like French cut and Veri-green beans, which are not ordinarily heavy volume items, are being mentioned. Corn and cut green beans are still doing well.

Canned fruits are seeing some tightening. Items like pears and apricots are already seeing some restrictions. Peaches are an item to pay attention to based on a correcting supply of canned product and, as discussed last week, the farmers’ intention to reduce raw product supply. Imported peach offers abound but the pricing is not at a point low enough to justify the quality difference and to drastically effect domestic sales. The new domestic pack should begin in June.