Listed below are several industry Websites that provide valuable market related information that will help you stay abreast of ever-changing market conditions in the foodservice industry.

http://www.ams.usda.gov/
http://www.foodservicedairy.com
http://www.cme.com/wrappedpages/misc/cheese.html
http://www.foodservice.com/
http://www.catfishnews.com/markets.htm
http://tonto.eia.doe.gov/dnav/pet/pet_pri_gnd_dcus_r30_w.htm

December 21, 2009

Canola Canola values were narrowly mixed with values pretty steady. Canola was pressured down by weakness in the US soy complex, the continued uncertainty about export sales to China and the large canola supplies in western Canada. However, balancing that off and accounting for prices being little changed was the weak Canadian dollar, slow farmer selling, friendly technical signals and profitable crush margins. Crushers were notable buyers during the week with routine exporter buying noted. Speculators were good buyers also. The selling came from commercials with steady elevator company selling noted as farmers did price some contracts. Demand for canola is still brisk, despite China's embargo against purchases of Canadian canola.
Corn and Soybeans Chicago corn and soybean prices were mixed with soybeans modestly lower and corn a bit higher. The firm US dollar weighed on prices. Soybeans were pressured down by speculative profit taking. There was little fresh news and speculators were getting tired and wanting to take profits ahead of the holiday break. Losses were modest as demand from both exporters and the domestic market remain quite strong. Corn fell early in the week on slow exports and profit taking. However, as the week wore on corn bounced back to small gains as a strong 2 day winter storm hit the corn belt catching 12% of the corn crop unharvested and ending the harvest in many areas. It was estimated that about 1.2-1.5 billion bushels of US corn were still to be harvested when the storm hit. Now some of that will be combined, but traders feel that 600-700 million bushels will be left through the winter. US agronomists indicate that between 30%-37% of corn left over winter is lost. This would mean that about 200 million bushels would be lost. While this does not seen huge, it is a significant number. USDA forecast that US 2009-10 soybean ending stocks will be 255 million bushels, a bit higher than traders expected, but down from the November estimate. The main reason for the reduction from November is that China continues to take more and more of the US supply. However, in the US trade there is concern that some of the US soybean sales being made to China will ultimately be switched to South America who's record large crop will ultimately result in lower prices. As a result, the oilseed markets do look like they will be facing severe weakness in the later spring as South American soybeans come in. The only thing that could halt this would be production problems in South America.
Wheat US wheat futures saw moderate losses as the firm US dollar weighed on prices. The large global and US wheat supplies also prompted selling with bearish technical signals encouraging speculative selling which also pressured the market down. For wheat, the USDA report had no good news as they raised the US 2009-10 ending stocks to 900 million bushels, above trade estimates and the November forecast. Globally, they pegged the 2009-10 wheat ending stocks at 190.9 million tons, up from their November estimate of 188 million tons. All of this suggests poor wheat prices and yet values hang in well above US$5.00/bushel and not the US$3.00/bushel everybody expects.

Eggs Retail demand is rated mixed across the nation. The Southeast appears to have the weakest demand and the Northeast appears to be the only region that is meeting expectations. Selling interest is now ahead of buying interest. Completed trades are limited. Supplies are variable with the size of the product and the region of the country but overall supply is clearly exceeding demand. Brown eggs are still reporting good movement and are generally supporting existing quotations.
Eggs for breaking are not being aggressively sought and when trades are completed they are at discount to current ranges. The product market is still showing some good movement on liquid product. This is largely due to sellers forcing product through before New Years. Both liquid and frozen whole eggs are under pressure now. Non certified whites are lightly tested but are trending higher. Dried products are quiet right now but sellers are holding their prices citing interest from foreign buyers.

Pork Live hogs moved up as packers sought to fill up the pipe line and are gearing up for a large kill on Saturday as well.
Ham values continued to erode as holiday demand is now over. Bellies are receiving support from Chicago Mercantile exchange trading. Fresh trimmings are barely steady to weak as processors needs erode in lieu of post Christmas demand. Loins are firm with availability being fairly thin. Butts were being offered on Wednesday well off the trade. We may be seeing some more availability. Butts are still well above what is normal for the fourth quarter however. Spareribs are still firm as buyer interest holds firm. Back ribs listed as a value last week having moved upward with export interest from Japan cited as the reason. Tenderloins are the only cut that is still rated as a value right now.
Packers were showing a positive margin of $12.30 per head at midweek which is a nice improvement for them. One vendor polled said he is seeing the makings of a firmer market in 2010 citing reduced supply with Smithfield cutting back their sow herd an a major hog producer going out in 2009. If export trade comes back to 2008 levels then we could see a stronger year for pork in 2010. HINI is what will probably be the controlling factor on export business along with the world supply of pork.

Beef The asking price on live cattle was at $82.00 cwt. on Wednesday with bids of $79.00 cwt. out there. Last week live traded between $79-$80 cwt. The call is for $1.00-$2.00 higher this week.
Rib values continued to slide. As predicted the post Christmas crash is coming early especially on this cut. End cuts continue firm. If you missed the low point on insides last week it is definitely past us now as the trades were up about $.20 a pound on Wednesday from that low with no product on prompts. Top Butts were showing new strength at mid week. Bottom round flats are moving up with insides. Grinds are firming as is typical this time of year with the short kill weeks approaching.
Packers continued to show strong margins of $43.90 to $46.90 per head at midweek. The choice/select spread was at $7.00 cwt. on Wednesday.
Beef production is projected to be down 2.6% in pounds for 2009, The forecast right now is for a 1.45 % reduction in pounds for 2010 with the heavier reductions coming in the first half of the year.

Dairy Steady as you go in the dairy world this week. The block opened at $1.70 on Monday and held through Wednesday. This was dead even with last week’s closing average. The barrel opened at $1.46 on Monday and held through Wednesday, which was also even with last week’s closing average. Butter was off slightly. The Monday through Wednesday average was $1.4333 which was $.0047 below last week’s closing average of $1.4380. The market opened at $1.45 on Monday, held on Tuesday but was unable to sustain and dropped to $1.40 of Wednesday. Non Fat Dry Milk grade A opened at $1.38 and held straight through Wednesday which was off $.012 from last week’s closing average of $1.3920. Extra grade opened at $1.40 on Monday and held there through Wednesday which was even with last week’s closing average.

Chicken Most suppliers are tight on inventory pretty much across all lines. Demand is normal for this time of year, with most buyers continuing a hand to mouth buying pattern. Short production weeks during the holidays may keep inventories at current levels or even tighter than what has been seen this week. Possible chance of seeing some items inch up in pricing due to the lack of supply.
WOGs and whole birds are moving well in the fast food segment, causing these items to be short and sellers have inched up their asking prices all week.
Breasts are about steady as well as breast fronts. Tenders and cutlets vary depending on who you talk to as far as asking prices and inventory levels.
Dark meat overall is in good shape. Leg quarters moving well into export channels and are rated as steady. Leg and thigh meat well supported and are full steady.
Wings remain tight and short of needs. Asking levels inched up every day this week.