Market Updates for December 6, 2019

Section Type

Dairy | Cheese

The CME Block and Barrel markets have seen some untraditional moves in recent weeks.  Speculators feel this is not due specifically to a demand element or supply element but a combination of both.  Current run-up we have seen is a combination of holiday buying and no extra product available to be taken to the market that fits the specific spec, but there is plenty of cheese to fill orders.  Traders feel there is a light at the end of the tunnel, but the length of the tunnel is still being defined.

Last week:

Block - Up

Barrel - Up

This Week:

Block - Up

Barrel - Up

 

Dairy | Eggs

 The national flock size is down. This is for the most part due to summer flock rotation. Retail demand has also increased.

Last week:

Large -No change

Medium -Down

Small- No Change

This Week:

Large -Down

Medium -Down

Small -No Change

Dairy | Butter

Butter production continues to be active and inventories continue to grow; expectations are for butter pricing to stay relatively stagnant on the spot market over the next few weeks prior to the butter inventory is reset with current levels and previous inventory is ‘wiped out'. 

Last week:

Butter -Down

This Week:

Butter -Down

Grocery & Bakery | Wheat

Despite weekly ups and downs spring wheat (pizza flour) prices have been trending down since summer and currently are below last year. Smaller North American supplies have pushed pasta prices above last year.

Grocery & Bakery | Soybean Oil

Soybean harvest is wrapping up with soybean oil prices slipping as processors ramp up output.

Grocery & Bakery | Sugar

With 9% of U.S. sugar production lost in the Upper Midwest, the market is waiting to see how much the duty-free Mexican sugar import quota is raised. Cane sugar prices are currently being quoted 20% above levels available 60 days ago; beet sugar is unquoted because virtually all of remaining production is already contracted.

Meat | Beef

Tyson's Kansas beef packing plant is restarting after fire closed it in August. This should add a little more supply which could help moderate prices.

Ground Beef:

Ground beef prices are easing after features switched to other items.  Prices may head higher again as holiday shoppers frequent QSR restaurants.

Ribs:

Rib prices are adjusting lower as holiday buying winds up over the next few weeks.

Briskets:

Brisket prices have been mostly sideways for the last 6 weeks, but there is a seasonal tendency for them to inch higher in December.

Rounds:

Clods and round cuts have been cheaper to use in ground beef formulas than imported beef. Prices will probably track ground beef values into the new year.

Strips:

Strip prices are muddling along at seasonal lows.

Tenders:

Tender prices have topped out and are headed lower. Select tender prices will ease more slowly than choice. 

Thin Meats:

This is the time of year when thin meats prices start to trend higher. Most prices are about where they were last year.

Meat | Pork

Pork output surges along 5% above last year's record, but prices are higher -- a sure sign that this extra pork production is going offshore. 

Butts:

Boneless butt prices have been firm on increased exports to South Korea and other Asian destinations. Bone-in butts are a reluctant follower as tight plant labor limits how many are converted to boneless.

Hams:

Ham prices hit 5-year highs as processing for Thanksgiving wrapped up. Prices have plenty of room to adjust lower from here.

Bacon/Bellies:

Belly prices are back down in the area which often triggers buying for features. We are already seeing national ads for bacon-topped hamburgers.

Ribs:

Spare and back rib prices have peaked and are adjusting back closer to 2018 levels.

Loins:

Boneless loin prices are working higher as consumers switch away from pricey ground beef. Bone-in loin prices are stabilizing but still struggle as limited boning labor forces packers to sell more loins as bone-ins.

Poultry | Chicken

Demand for rotisserie chicken has improved as holiday shoppers look for on-the-go meal solutions. Buyers forced to pay a little more in some instances.

Breast and Tenders:

Jumbo and medium chicken breast prices remain well supported as the QSR sector shifts away from more expensive ground beef.

Wings:

Wing prices are steady as processors seem to be getting enough business to keep supplies moving.

Dark Meat:

Frozen leg quarter prices are higher due to export interest; leg and thigh meat prices are firm. 

Poultry | Turkey

We will be watching post-holiday booking prices to gauge how good Thanksgiving clearance was.