Demand for U.S. soybean supplies  started strong in this week’s market.    However, later in the week CBOT soybean and soyoil futures pushed lower, which in turn took canola off its highs and sparked some selling that took most contracts down.  At some point expected record production in Brazil and Argentina, combined with the estimated record production in the U.S. should bring the market back around.

                                                                                               

Extended duty free imports of raw sugar has calmed sugar prices, and the reaction has been felt at various commodity markets with spot prices easing for the fifth day in a row.   Consequently, the stocks of sugar manufacturers are also heading southwards.

 

Grain futures closed lower on the Chicago Board of Trade as most equity markets around the globe posted losses and the dollar made strong gains this week.   Corn futures fell slightly, but found support from higher prices for corn in China.  Wheat prices dropped early, recovering with reports of adequate moisture for the winter wheat crop, now dormant in planted fields. Soybean prices fell with the dollar index up 1.07 percent.

Demand is reported to be good on shell eggs across the country. When completed, trades show premiums to existing quotations. Overall supply is close. Total shell egg inventory reduced by 10% last week. This was 8% lower than this time last year. The dried and frozen sectors are quiet. Sellers edged pricing up but have found little interest.

The Thursday Urner Barry for the North East was up $.11 per dozen on large from the previous Thursday and $.14 per dozen for medium from the previous Thursday.

The market is full steady to firm.

 

As of Wednesday, there was ice reported in the mid-west and the front was moving eastward. The live hog market was projecting flat to maybe weaker as most packers had booked their needs into next week. The anticipated heavier kills last week to fill voids in the supply did not materialize for the most part.  Climbing pork prices are starting to meet demand resistance. Commodity pork is still in tight supply and was steady to firmer on Wednesday with availability still being an issue at midweek. Butts and loins inched up this week but loins may start backing off next week. Boneless sirloins are still short with Canada still buying in.

Packers were reporting a positive margin of $14.38 per head at these levels.

Some industry notes:

John Morrell announced the closing of their Sioux City pork plant. Exports in November totaled 383.2 million pounds. 11.3% above last year at this time and the largest monthly total since October 2008. 2009 exports were down compared to 2008 but last year was still the second best year ever for U.S. pork exports. .U.S. pork exports in 2010 are projecting to be close to the 2008 record year.

 

Opinions varied on the beef market at midweek. Some were calling for prices to hold firm well into February. Others point to increased production and flat demand. As of Wednesday packers were discounting slightly. The discounts varied from packer to packer with chuck and rounds leading the pack. Ground beef was steady at midweek. Middle Meats were mixed as of Wednesday with PSMO’s showing some reductions on trade levels. There is still not a lot of product showing up on prompts yet however. One key to this will be if the scattered trade level reductions prevent inventory back up.

Owners were asking $87-$.88 cwt. for live cattle on Wednesday. Bids at $83.00-$84.00 cwt. were not renewed on Wednesday. The call is full steady to $1.00 higher on live this week. Last week live traded at $84-$85 cwt. Packers were reporting a $50.00 per head margin on Wednesday and at this level of profit it is unlikely that packers will quibble about $1.00 per cwt. on live. They will want to crank it out while they are in the black. The choice/select spread was at $5.10 cwt. at midweek.

The slaughter last week was at 652,000 head, up 5.7% compared to this time last year.

 

The Chicago Mercantile Exchange gave no quotes on Monday but the block opened at $1.455 on Tuesday and moved up to $1.4650 on Wednesday. The 2 day average was at $1.46 which was up $.047 from last week’s closing average of $1.4130. The barrel opened at $1.48 on Tuesday and moved up to $1.49 on Wednesday which left an average of $1.4850. This was still up $.04 from last week’s closing average of $1.445. Butter opened at $1.50 on Tuesday and slipped to $1.49 on Wednesday. The 2 day average as still at $1.4950, up $.093 from last week’s closing average of $1.4020. Non Fat Dry Milk both grades were at $1.30 steady for Tuesday and Wednesday. This was down $.0420 on the grade A product from last week’s closing average of $1.3420. Extra grade was down $.05140 from last week’s closing average of $1.3510.

Trade has been mostly light this week. Some production facilities were closed Monday due to the holiday, which is keeping available product and inventory low on some items.  Front half of the bird continues to receive the most interest.

 

Whole birds and WOGs are holding steady for the most part. Whole breasts are full steady with majority of product moving into Canada.  Breast fronts as well are moving in this market, with quotes possibly going higher.  Trim meat and chunk meat is tight and short of buyers needs.  Tenders are mixed as far as trade and availability.

 

Dark meat is steady with markets holding.  Legs, leg quarters and drums are steady.  Wings are starting to ease up just a little.  Industry is waiting for results of the discussions this week between US and Russia to see how markets will be effected on dark meat.

 

Look for increases in commodity nuts in the near future and beyond. Pecans and pine nuts are the two of greatest concern but all nuts will probably be affected. Heavy rains are being blamed for crop issues which alone would spark increases. The weak dollar is also contributing as it is being reported that China has bought and bought heavily, further straining the domestic supply.

 

It is being reported that the USDA has purchased 27,000 metric tons of white rice for immediate shipment to Haiti for relief. While this might ordinarily trigger upward pricing by itself it is still a little too early to know which way the pricing will go. Haiti was already a large user of US rice, and this may result in a  shifting of the distribution channel rather than a jump in usage. It is still too early. The US demand has been low.  The pricing was fairly soft prior to the earthquake as exports had slowed. There is the thought that export demand will increase to the Philippines , Iraq, and possibly others and futures could respond accordingly.