Canola contracts on the Canadian market were trading at higher price levels at midday on Thursday with renewed demand from the domestic and export sectors tied to the upward price movement.   A minor pull-back in the value of the Canadian dollar early Thursday was enough to stimulate fresh demand from domestic processors as well as commercial buyers.  Much of the commercial interest, was the pricing of old export business to Japan, but there were also indications that some fresh Chinese business may have been put on the books.

 

Technical buying and a better-than expected crush report are supporting gains in CBOT soybean futures.  Lower outside markets and continued strong demand are contributing to the slight increase in the soybean oil market.  The market closed Thursday at 39.09, up 19 points over Wednesday’s close.  Look for this market to remain fairly steady with a slight dip expected in the next couple of weeks.  Expect market to remain in the 38.50 to 40 cent range.

 

The undertone of the markets this week have shown improvement as compared to recent weeks.   Increased prices on competing proteins have led to additional interest on most items.  The exception to this are wings, which typically this time of year take a downturn in the markets with less interest at the buyer levels.  This year is no different other than this market continues to try and find a bottom.   Both retail and foodservice are seeing  improved conditions overall, with the current retail ads and foodservice promotions . WOGs and whole birds have seen good movement this week and have become tight.  Possibility of  seeing a market increase near term is there. Whole breasts are tight with trading at full market or better.  Breast fronts  steady.  Boneless is firm and is also influenced by the current retail and foodservice ads and promotions.  Tenders are about steady to steady. Dark meat is full steady.  Drumsticks are firm, with buyers trying to cover full  needs.  Thighs, legs and leg quarters are clearing out on a steady basis.

Retail demand is now rated fair. Discounts noted on larger sizes. Eggs for breaking are being acquired below current ranges. Whole egg, both liquid and frozen, is under downward pressure. Liquid whites are under pressure.

The fall appears to be slowing at least. Large and medium were down $.02 per dozen on Thursday compared to last Thursday on the North East Urner Barry. This is less of a reduction than we have been seeing since Easter.

 

The pork market continues to climb the victim of live hog shortages, heavy exports and now reduced production. Live hogs are at .6122 compared to .44 last year at this time. May is looking to be tighter. Spareribs are rated steady for now but there has been some talk of pro rating light spareribs in May. They could move as high as 1.75 with a .05 discount for mediums. Butts are steady for now. Bone in and boneless loins are steady this week but could also move up in May. Hams have seen some increase in availability and the call is now steady. Bellies and trim are in tight supply and the call is firm.

We may not see relief until after Memorial Day. The packers were reporting a + 6.62 margin per head on Wednesday.

 

Cattle owners are asking $100.00 cwt. to $101.00 per cwt. for the live animal. Bids of $96 cwt. -$97 cwt. were out there on Thursday. Live traded last week at $98 cwt - $100 cwt.

Grinds are firm. End cuts somewhat mixed but insides are still strong with supply still short of demand and higher pricing noted. Briskets are still coming off. Middle Meats are steady to firmer.

The cold storage report shows all 4 protein categories are down in supply compared to last year. Beef supplies are down 8%, Pork 17%, turkey 25% and chicken 4% from this time last year. This makes the retail practice of switching to the cheaper alternative less viable than in past years. Beef exports have started to kick in now along with pork.

The choice/select spread is at 3.00 cwt. The packers are reporting a + 37.95 margin per head at these levels aided by a $10.00 per head drop credit.

 

The block and barrel continued to settle this week. On the block, the  Monday through Thursday average was down $.0582 from last week’s closing average, It was reflected in the trade on the CME spot market with 46 loads recording trading through Thursday. The barrel was down $.0399 during the same time frame with 15 loads traded through Thursday. Butter continues to rise. It was up $.033 comparing the Monday through Thursday’s average to last week’s closing average on the CME. Through Thursday no trade had been recorded on the spot market of the CME. The Non Fat Dry Milk grade A was up $.019 for the Monday through Thursday’s average compared to last week’s closing average on the CME. Non Fat Dry Milk extra grade was up $.0525 comparing the Monday through Thursday average to last week’s closing average on the CME.

Cheese is down, butter and milk are up.

 

Snow crab outlook continues to be uncertain as Canada’s Department of Fisheries and Oceans has lowered this year’s quota by more than 60% in efforts to insure the sustainability of the species.  Total allowable catch is reported to be 7,700 tonnes compared to 22,400 tonnes in 2009.  Reduced quotas coupled with less favorable currency exchange rates will continue the impact supply and pricing.  Domestic shrimp  prices remain firm on most sizes as processors are depleting last season’s inventories which were down about 16 percent from prior year.  It is uncertain what impact this past winter’s unusually cold temperatures and excessive rains will have on this year’s harvest but most processors are optimistic as we approach the opening of the Gulf season.  Domestic catfish production for the month of March was 46.7 million pounds, up four percent compared to March 2009.   The average price paid to growers for live fish 78.5 cents per pound for March 2010, up two cents from the previous month and 1.2 cents above a year ago.

 

For domestic vegetables, it is planting time. So far there haven’t been any reported issues with limited acreage. Planting is underway of all the major vegetable varieties. While planting will continue for a few more weeks, weather is now the big unknown. From now through harvest weather will play a major role in crop yields and the prices that will be paid for canned vegetables from July forward. For shorter term price concerns the old supply and demand will be the determining factor for pricing as canners will be trying to balance their inventories heading into the harvest of this year’s planting. Canners for the most part don’t want to sell out of stock and at the same time need to make room for new inventories from this year’s crop. Price tips the scale in one direction or the other. Deals should begin to develop as we move closer to summer.

 

Peaches are a fruit of interest as California has finally received the much needed rain that has been missing for the last several years. Cooler temperatures, however, are extending the bloom of trees and this could reduce yields. Earlier in the year, it was reported that California peach farmers intended to reduce crops to put upward price pressure on raw product. Smaller yields from these two factors could translate through the channel as higher prices. This crop year saw a large crop and carryover of canned peaches will help end user peach prices.

There is a good chance that tomatoes like whole peeled and diced should begin seeing deals as inventories are high against a lower than last year but steady demand. Unlike last year canners have inventory and will need to make room in their warehouses.