CBOT soybean futures are on the defensive, retreating from earlier gains. The strengthening of the U.S. Dollar and bearish South American crop outlooks served as catalysts to attract selling interest.   Declines are limited by firm cash market prices amid the absence of farmer selling.   Futures remain in a consolidative mode, chopping around in range bound activity as traders eye outside markets for direction.   Soy product futures stumble with soybeans, but soyoil gains product value share on spreads as strength in crude oil futures offer support. May soybeans are 6 cents lower at $9.55, May soyoil is 8 points lower at 39.15 cents per pound, and May soymeal is $4.20 lower at $270.00 per short ton.  The sharp rally in the soybean futures market has led to increased case sales and is reflected in a strengthening of the carry in the futures spreads as commercial traders hedge purchase.

The U.S. Department of Agriculture now expects U.S. farmers to plant 77 million acres of soybeans in 2010.   2009 U.S. soybean planted acreage was 77.5 million. The USDA will issue a more detailed outlook for grain and oilseed crops later today.   USDA's weekly export sales report, normally released on Thursday, will be postponed until 8:30 a.m. EST Friday due to Monday's Presidents Day holiday.   Options on March soy futures expire Friday.

In overseas markets, crude palm oil futures on Malaysia's derivatives exchange weakened Thursday to close at a key support level as declines in crude oil and soyoil futures weighed on sentiment.  European soybean prices were lower while soymeal prices were steady to lower. European vegetable oil prices were mixed.

Things are very quiet in imports from China as the Chinese New Year is now underway and business has come to a halt for the celebrations.  As expected, news from Thailand is with higher prices being quoted for raw materials on pineapple. The expectation should be for higher prices of canned pineapple sold here in the summer. There is quite a bit of peach activity with interesting quotes coming from South Africa.

 

Peaches are picking up activity domestically. An abundant supply has helped to keep prices lower and more stable than in the previous year but there are hints that things could change.  Current demand is not causing pricing pressure on end users and distributors but it is to the farmers.  It has been reported by the California Farm Bureau Federation that California farmers have reduced the acreage of cling peach trees 16% from 2009 levels in an effort to align supply and demand from their perspective. This could bring higher pricing for finished product this summer when the fruit is processed. If there are weather or other issues that could affect the yield coming from this reduced amount of trees, higher prices are almost certain.

 

Retail demand for shell eggs has improved somewhat. Some short term promotional thrusts were noted. Completed transactions support  existing quotations. Supplies are reported adequate for current requirements.

Live hogs sales remain low. Packers are reported to be well supplied. The live hog market is rated steady. Export demand has been ameliorated by the relatively strong U.S. dollar. Cushion meat is still flowing into Asia but that is about it.

Hams are steady to slightly firmer. Bellies were up early in the week but were reporting steady Thursday morning. Trimmings were unchanged with supplies varying packer to packer. Loins are in balance and are holding steady. Butts are showing renewed interest and premiums have been noted. Lite ribs are up with BBQ season nearing. Medium ribs are also showing strength.

Packers margins while still positive have dropped to $3.92 per head.

 

Live cattle moved up this week. Asking prices were $91.00 cwt-$92.00 cwt. on Thursday. Pundits are calling the market full steady now. Last week trade established between $87-$89.50 cwt. Cattle weights continue to run light. This has been going on for a while now and it is counter to the trend the industry has seen for years now. Lighter cattle mean a lower supply of beef assuming an even kill. Last week it was estimated that 22,000,000 pounds was the amount of aggregate supply reduction that came from lighter cattle. In addition the kill was down about 5000 head last week also.

With supply being tight and retail domestic demand ticking up packers are advancing prices. Round cuts led the way. Middle Meats have firmed up also with beef tenders being a notable exception. Grinds remain in the tight supply with reduced production.

Packer margin was at $5.30 per head at midweek, as with pork, still positive but greatly reduced. The choice/select spread was at a scant $2.01 cwt. on Wednesday with 63% of the kill grading choice. As with pork, the relatively strong U.S. dollar has kept a lid on export demand. With Lent coming soon this could work to counter low supply as we move into March.

 

The cheese markets moved lower last week. The block opened at $1.48 on Tuesday and was at $1.4275 on Thursday. The Tuesday through Thursday average was $1.4508 which $.0482 lower than last week’s closing average $1.4990. The barrel mirrored this opening Tuesday at $1.425 and dropped to $1.3875 on Thursday. The Tuesday through Thursday average was $1.4092 which was $.0558 below last week’s average of $1.4650.  Butter moved up slightly. It opened at $1.33 on Tuesday and was at $1.38 on Thursday. The Tuesday through Thursday average was at $1.3483 which was $.0063 above last week’s closing average of $1.3420. Non Fat Dry Milk grade A opened at $1.105 on Tuesday and moved up to $1.12 by Thursday. The Tuesday through Thursday average was $1.115 which was $.013 above last week’s closing average of $1.1020. The Non Fat Dry Milk extra grade opened at $1.24 and held straight through to Thursday. This was dead even with last week’s closing average.

WOGs and whole birds are in balance with markets mostly steady.  Breasts and breast fronts also steady with markets holding at current levels.

Chunk and trim meats are full steady and can be harder to find.  Cutlets and tenders are steady to about steady.

 

Wings, have started to feel the pressure with markets taking a downward trend this week.  Could possibly see this continue.

 

Dark meat is about steady, with leg quarters in balance.  Thigh meat is about steady.