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.

 

 

Soybean futures are expected to start Friday’s 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 $10.04 1/2 and November soybeans were 12 cents higher at $9.74. 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.

 

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.

 

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 week’s markets as suppliers are feeling the pressure to move product.  Decline in Seasonal demand is evident.

 

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 week’s 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.

 

Wings are rated full steady.  Markets have continued slight increase this week as wings have gained some additional strength.  Legs and leg quarters are about steady to steady.  Thighs and drumsticks have most interest at the retail level.

 

 

 

Earlier this week NOAA extended the size of the area in the gulf closed to fishing in federal waters.  As of July 13^th 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%.

 

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.

 

 

 

Butter-Market remains firm.  Cream supplies remain tight.  The higher summer temperatures relate to more cream going to ice cream and putting a further strain on the market.

 

 

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.

 

Egg Products- Market is steady.  Some reports show pricing inching up.

 

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 H1N1 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.

 

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.

Choice beef showed increased demand  with Canada coming in to buy choice short loins to cover shortages in their own AAA supply. Grinds should stay steady through July and move up in August. Tenders are down a little but they should steady out then move upwards in August. Loins and Butts are steady into August.  Ribeyes are projected to be weaker through July and moving to steady in August.  Chucks are steady and some are saying that we will not see the traditional fall on end cuts that we usually see this time of year. Brisket are projecting steady then upward in August . Rounds should be steady.  As with pork we are seeing a fairly steady market overall but the choice/select spread should start to widen if we keep seeing shipments of choice product that we did this week. Suppliers are still making money so we shouldn’t see any production cuts.

 

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 year’s 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.

 

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.

 

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.   

Pineapple is still of concern from the previously reported El Nino weather events. A short crop with early plant closings and the expected surge in demand with the beginning of the  Winter season crop should continue to push “for arrival” of finished goods prices higher.