China’s solid demand for soybean oil combined with buying from other outside markets is expected to support the strong soybean market.  South American weather is mostly beneficial for the newly planted soybean crop adding to the idea that the crop should get off to a good start.

A lot of soybeans have gone through the drying process because of the late harvest, and much of the crop is wet and needs to be dried. The heavy use of drying equipment has caused breakdowns and delays.  There have been instances where elevators had to shut down for a day to take care of drying. If the elevators shut down, that just causes more delay. Even with the delays caused by rain, the domestic soybean crop is largely harvested. 

Wheat Futures have declined in their past two sessions.  Basis premiums have leveled for now for spring wheat; winters are now posting higher values.

Row crop harvest saga continues, although soybeans are nearly harvested, and corn is well on its way.  Stocks of wheat are large enough to lead to lower prices, yet prices are higher than at this same time last year.  Fund buying could continue to increase and support wheat prices, or the past two sessions may mark the start of a long anticipated correction toward lower prices, proceed with caution.

 

Reports on retail demand were mixed across the nation as of Wednesday. Trades were limited. Non-certified product was becoming increasingly available in the market and was being offered at discount. More product was being offered for breaking stock as we are in the post Thanksgiving market.

In the product segment dried and frozen product remained quiet. Liquid product showed the most activity.

The Northeast Urner Barry for Thursday was $1.33 for large and $1.09 for medium which was no change from the previous week.

The market is quiet.

 

The call for the live hog market was steady to slightly weaker for this week  as of Wednesday.

Hams are still strong with export interest from Mexico stoking the fire. Bellies are steady. Trimmings are firmer in response to improved demand for holiday production. Butts have weakened slightly, in the short term, as buyers are going hand to mouth. Loins are steady for now and tenders are holding steady between.

Packer margin was reported at a positive $3.46 per head at midweek.

 

Live traded at $84.00-$85.00 per cwt. last week. Packers bid there this week but had not been successful as of Wednesday. The call is for $1.00 increase on live this week.

Sellers are working hard to clear positions on insides and bottom round flats. A lot of this product is showing on prompt lists. Most other cuts are rated about steady. Grinds are seeing some pressure.

Packer margins are showing a positive $34.50 margin per head. The drop credit is $9.73 of that margin. The drop credit is the price producers get for all the by-products of beef production, like hides. They are receiving good money for these items right now. The choice/select spread is at 7.65 cwt. Cattle are still coming in lighter as producers continue to pull forward with the live market projecting to be $3.00-$4.00 below present levels in the first quarter of 2010. 

Demand still remains slow despite the season and the market is quiet overall right now.

 

The block continues to rise. The Monday through Wednesday average stood at $1.6833 which was up $.055 from last week’s closing average of $1.6283. The barrel continues to feel the effect of high inventories. It opened at $1.49 on Monday, held on Tuesday and inched up to $1.4925 on Wednesday. This put the Monday through Wednesday average at $1.4908 which was $.0159 below last week’s closing average of $1.5067. Butter opened steady at $1.520 on Monday and held there on Tuesday. It fell off on Wednesday to $1.5050 which left the Monday through Wednesday average at $1.5183 which was $.0067 below last week’s average of $1.5250. Non Fat Dry Milk grade A came in at $1.4050 for the Monday through Wednesday average which was .005 above last week’s closing average of $1.40. Non Fat Dry Milk extra grade was steady with last week as of Wednesday at $1.40.

Pinto beans are a concern as they are being reported that supplies will be limited due to weather. Rain has caused a serious issue with this year’s harvest in terms of overall quantity harvested and equally important in terms of quality of harvest. The harvest is reportedly severely limited due to rain reducing the amount of product available.  Wet beans put into storage pose shrinkage and other serious quality issues. Indications are that this year’s dry pintos and black beans are facing both scenarios.  If that weren’t enough,  Mexico is still importing with high demand due to drought. The result is higher prices for the good stuff and lower prices for the not so good.  Other varieties of dry beans are not experiencing these issues.

 

Indications are that beets are not going to achieve budget packs and it will be another tough year. Expect allocations and firm pricing.

 

Pricing has softened slightly on whole peeled tomato products with hints that it will be short lived. January and February are expected to see increases again as demand is remaining high.

 

In terms of price and supply mandarin oranges have been on a roller coaster ride recently.  It seems that things are now leveling off.  Canners overseas have been trying to push prices upwards with uncertainty of the size of this year’s crop and have even baked away from some sales to the U.S..  There have been some deals floated but now it looks like things have settled and pricing will firm.

Activity this week has been seasonal.  Foodservice has picked up a little as we enter  into holiday shopping mode.  Supply is adequate to short across most lines and holding somewhat steady  due to lack of product.

Seasonal demand has Whole birds and WOGs seeing some improvement.  Breast fronts have seen improvement with the markets taking a slight increase this week.  Cutlets and tenders are holding steady.

Trim and chunk meat have been tight with reports of breast meat purchased as an alternative. 

Leg quarters and legs are receiving additional interest and rated as steady.  Thigh meat is  also strong. 

 

Current market conditions are good and the industry is in a strong position.  Whole birds are seeing steady to up money on any spot purchases.

Drums are trading at full market as additional interest has surfaced this week.  Whole wings are in balance and are trading at steady levels.  Thigh meat is firm. 

Frozen breast trim and scapula about steady.