- COMMODITY OIL
Produce Trends - JULY 20, 2018
The market on russets is mixed this week. Product out of Idaho is down. Product out of Washington/Oregon and Colorado is up. Supplies are steady with moderate demand.
The red potato market is mixed this week. Product out of California is steady, while product out of Eastern Shore Virginia is down.
The markets out of both Florida and California are steady. Quality is good, with moderate supply and demand.
The cabbage market is up this week, with supplies steady. Demand is steady also.
The green leaf market is up this week, with supplies normal. Quality has been good, but with the recent heat there is occasional seeder and light fringe burn. Demand is good.
The romaine lettuce market is up this week, with supplies normal. Demand continues to slowly get better. Quality has been good, but with the recent heat wave there is some fringe burn and occasional salt and pepper.
The iceberg lettuce market is up this week, with supplies slightly lower than budget. Demand is up slightly. Quality is very nice, with an occasional sign of seeder.
There are good supplies for California peeled garlic this week. Chinese peeled garlic pricing remains strong in all markets, but more supply is coming, so pricing will most likely be dropping in the coming weeks.
The jumbo yellow onion market is up this week. Product out of both San Joaquin Valley California and southern New Mexico is up. Good supplies and quality are being reported.
The cilantro market is up this week. Product out of Oxnard is up on 60’s. Product out of Central Coast California is up 30’s and on 60’s. There is moderate demand and supply.
Eastern supply is down and markets are active. Western supply is plentiful and quality is excellent.
Eastern supply is plentiful, but the growing regions are fragmented. Western supply has great quality with good pricing.
The green bean market is mixed this week. Imported haricots verts are down, while machine-picked product out of Eastern Shore Virginia is steady. Supply and demand are moderate.
Eggplant has solid supply in the East and West. Quality is good.
Eastern markets are active, and supply is expected to pick up this week. Western supply is down and quality is poor. FOB prices are high this week.
Supply is steady and quality is good.
Eastern rounds are down, as there are several growing regions with supply. Crops are leaning heavily towards the larger sizes. The West has an ample supply of rounds, and is driving the market down as well.
Cherry tomato supply is steady.
Eastern grapes are up slightly as regions are transitioning. Western grapes are also transitioning. However, Baja is still supplying strong volume. Quality is fair to good.
Large and extra-large romas are tight in the West. However, there is plenty of supply overall between Eastern and Western romas. Mediums are most available and down slightly.
The jumbo carrot market is mixed this week. Product out of California is steady, while product out of Mexico is down. There are moderate supplies and good demand out of California. There are lighter supplies, good demand, and a wide range of quality coming out of Mexico.
The celery market is flat this week. Supplies are much lighter this week, but markets are still good. Quality is good in Salinas.
The green onion market is mixed this week. Product out of Mexico is up on medium and down on small. Product out of South Carolina is steady.
The cauliflower market is down this week, with supplies much lighter. Markets are still good. Quality is good in Salinas.
The asparagus market is down this week. Product out of Mexico and Peru is down. There are better supplies, but production is slow due to the rains.
The broccoli market is down, with supplies continuing to be steady this week. The demand has been good, and the market is holding steady.
Mushrooms are in good supply and quality.
Pineapples are at the peak of their production. Volumes are expected to start decreasing next week, and will remain lower until the end of October. Fruit is expected to trend large during this period with good quality.
Banana volumes are expected to be sufficient, with high-quality fruit coming into the market.
Not much has changed. 48’s and larger continue to bog the market down. Smaller fruit continues to stay tight. Once the industry moves through the current bubble of fruit that is out there, things could change quickly. Loca is not expected to have as much size as the current crop, and will be much cleaner as well. California had extreme heat in growing areas, and a few areas were not expecting it – which could possibly force California to finish earlier than they expected to. Peru fruit is on the way, and should hit by sometime next week, bringing in more 48’s and larger to a market that is already saturated with those sizes.
The cantaloupe market is down this week. The Arizona season is officially over. All melons will be shipping from California. Excellent quality and a large crop are influencing the market. Sizing tends to be peaking on larger melons, with slightly limited supplies of the smaller sizes.
The honeydew market is down this week. As with cantaloupes, the Arizona season is officially over. All melons will be shipping from California. Excellent quality and a large crop are influencing the market. Sizing tends to be peaking on larger melons, with slightly limited supplies of the smaller sizes.
Supplies are light but consistent, and we expect improvements moving forward. Markets are steady. Quality has been good. Salinas and Watsonville are expected to ramp up over the next two weeks.
The strawberry market is up this week, as volume has decreased from previous weeks. Fruit size is down from previous weeks also, as warmer temperatures lead to ripening when the berries are smaller, so it’s taking more berries per clamshell to make weight. Quality is good, with a few reports of bruising and some overripe, but the field foremen are staying on the crews to keep the sub-par fruit out of the packs. Expect lighter availability and increased markets for the next few weeks.
The grape market is down this week. Black seedless, Flame seedless, Sugarones and Red Globes out of Mexico are down on Large. The Mexico season is about finished as the California season begins. The USDA is just starting to report out of California this week. Red seedless supplies are good, but quality will vary.
Central California is finishing up and will transition to the Northwest. Supplies are expected to be limited. Markets are higher with good quality.
Supplies remain limited, but they are seeing gradual improvements. Transition between Mexico and domestic harvest has been rough, and supplies are lighter. California production is improving. We expect the Salinas and Watsonville areas to continue to increase and reach peak by mid-July. The market is currently steady.
Lemons are in a demand-exceeds-supply scenario. Quality is poor. This is expected to remain through the month of July.
Valencias have good availability of 88’s, 113’s and 72’s, but 138’s still remain tight. There is good availability of 113 blood oranges this week. Chilean fruit has started to arrive.
The lime market has jumped up, with weather impacting supply. Quality is fair to poor.
APPLES & PEARS
Gala and Golden Delicious markets are steady to slightly down this week, depending on the growing region. All other varieties are stable. Demand is moderate and quality is good.
The pear market remains stable. Green and red D’Anjou and Bosc are available. The small end of pears remains tight, while 90 ct. and larger remain constant.
Beef Trends - JULY 20, 2018
Cash cattle traded on average between $1.09 and $1.11, $2 to $4 higher than the previous week, and cattle feeders are asking steady money this week, with no offers taking place from beef suppliers.
Federally Inspected Slaughter totaled 650K head last week, and this week we expect the production levels to be steady to slightly down from last week’s levels.
GROUND BEEF 81/19:
Blended grinds fell modestly with lack of support from buyers, but grinds are reporting steady money thus far this week. It is not out of the question that the retail sector could move in, with retail ads that could change the direction of the market back up.
Ground chuck traded steady money from the previous week. The market looks to be firm this week, but this is not expected to last, with retracement expected until mid-August.
All grades of knuckles reported modest increases, with the Select grade taking the largest increase as demand continues to be strong. The market has turned firm, and is expected to inch higher into early August.
All grades moved up in price, with slight increases. The market is expected to slowly increase in price until mid-August.
BOTTOM ROUND FLATS:
All grades of bottom round flats reported a small increase, and for this week we are seeing some weakness in cost. We do expect the market to continue to see modest increases through the summer months.
EYES OF ROUND:
Eyes of rounds reported a slight uptick in price, and we are seeing a softer market this week. We still believe that we will see slight to modest advances throughout much of the remaining year.
It is the same old story, with all grades of striploins declining substantially on adequate supply. We continue to see the same trend this week on all grades. Striploins will succumb to declines through most of the summer and early fall.
All grades of top sirloins reported slightly lower again from the previous week. We are seeing a rebound this week, but this should be short-lived, as the sirloins will continue to be under pressure, and are vulnerable to declines in late July and August.
All grades of tenders continue to decline, with supplies outpacing demand. All grades of tenderloins are showing signs that it will again be lower this week, with expectations they will decline into late July/early August.
All grades of light ribs continue to decline, with complete slowdown to demand. The market will continue to weaken, with declines anticipated into late July before rebounding in advance of Labor Day. All grades of heavy ribs saw another week of declines with ample supplies. We do expect more modest to moderate declines ahead into early August.
All grades of chuck rolls again reported modestly higher to last week’s costs. The market remains firm, assisted by export sales. Chuck rolls are still expected to move slightly higher into late August, before turning sideways into late summer.
All grades of Teres Majors reported down, with the Select grade taking the blunt of the cost deduction. The market is expected to ease into fall.
All grades of briskets continue to decline, with ample supply available. The market remains weak, and is expected to ease lower into fall.
All grades of ball tips reported modestly higher. The market is firming up, and we expect higher costs ahead, as activity is in place with retail ads.
Flap meat continues to decline moderately from the previous week. Out front, the market most definitely will see weakness, with slight to modest declines expected into late fall.
Flank remains fickle. The market took a back seat last week on all grades reporting moderate declines. The market has soft undertones. Flank is still expected to move lower seasonally into the fall time frame.
Outside skirt moved modestly lower from the previous week, and is showing signs of more upside to cost this week, with demand in place keeping supply very tight. The market is expected to decline as summer progresses.
Pork Trends - July 20, 2018
The USDA-reported hog harvest last week was at 2.285 MM head, almost 4% higher than last year at this time, and higher than the previous week. Harvest levels are hovering near their annual lows, and should begin to slowly ramp up over the next 45 days, as packers realize cheaper hog costs.
The USDA released pork export information for the month of May. Despite the increasing trade turmoil, May continued to be record-setting for pork exports. The rally in exports was likely driven by buyers looking to front-load inventories out of precautionary measures for the increased tariffs that went into effect in early July.
Prices on the loin complex were steady to lower last week, with the bone-in loins continuing to find support and the boneless loins trending lower. Bone-in pork chops continue to be the best value for the consumer, but as promotions wind down until Labor Day, so should price. Boneless loins will follow suit.
Pork tenderloin prices continued to move slightly lower for the third week in a row, a good indication that prices and demand have peaked. Pork tenderloins still remain a great value compared to previous years, so promotion from a large retailer could rally prices.
Pork butt prices continued to accelerate lower last week, due to fading demand. Demand is expected to weaken through early August, and with that should come lower prices. Reported forward sales and export sales also indicate a lower market.
Pricing on the rib complex continues to move lower, as peak season demand for fresh product has now passed. Sparerib prices continue to drop at an aggressive rate, while backribs are coming off much slower, due to tighter supply of sized backribs. Pricing is forecasted to hit bottom for the spareribs in the coming week, and backribs are forecasted gradually lower through October.
Belly prices continue to increase, due to strong bacon demand. Belly prices typically peak in mid-July, so prices are forecasted to stabilize rather quickly and start moving lower.
For the third week in a row, ham prices moved counter-seasonally lower. Typically, ham prices move higher through mid-July, due to increasing demand from processors for deli meats and grinds, but fear of the growing trade war is beginning to infuse price volatility into the market. Prices are decreasing to levels that generally begin to spur demand.
Trades on pork trimmings continued to decrease last week, now that timing is officially past peak demand. Prices are still near peak levels, and will likely continue moving lower at a rapid pace.
Picnic prices continue to move lower, due to decreasing demand. With trimming prices moving lower, boneless picnics must move lower as a grind substitute. Bone-in picnics are also seeing softness at the retail channel.
Turkey Trends - July 20, 2018
BONELESS, SKINLESS TURKEY BREASTS
Turkey breasts were flat this week. We should expect this market to trend flat to upward in the near term.
WHOLE FROZEN TURKEYS
Whole turkeys were flat this week, as we move closer to the holiday season. We expect this market to trend flat to upward in the near term.
Chicken Trends - July 20, 2018
The effects of heat and humidity continue to show in the number of processors experiencing lower-than-expected live weights. The small bird market continues to have supply issues in some categories, as processors try to manage lighter live weight birds. This trend is not expected to last long-term, as processors will quickly make adjustments to ensure live weights return to targeted ranges for plant profitability. An ample supply of jumbo and medium size boneless breast is showing up in the markets at discounts.
Boneless chicken breast demand continues to be off slightly from seasonal patterns. The lack of demand for boneless chicken breast is primarily due to competition with lower-priced proteins this year. The lackluster demand has put pressure on this segment, sending pricing lower. The current market increases on wings are a combination of short-term increased further processed demand for the upcoming fall season and lower live weights. Currently, export demand on items such as boneless breast, leg quarters, thigh meat and leg meat remain at normal seasonal levels, but domestic sales of leg quarters have fallen off slightly. Whole birds/WOG prices have started to level out; however, we should expect a flat to upward trend for the near term.
BROILER-TYPE EGGS SET IN THE UNITED STATES UP 1%
Hatcheries in the United States weekly program set 228 million eggs in incubators during the week ending July 14, 2018, up 1% from a year ago. Average hatchability for chicks hatched during the week in the United States was 83%. Average hatchability is calculated by dividing chicks hatched during the week by eggs set three weeks earlier.
Note: Starting in 2018, the 19-State totals have been discontinued.
BROILER-TYPE CHICKS PLACED IN THE UNITED STATES UP 2%
Broiler growers in the United States weekly program placed 186 million chicks for meat production during the week ending July 14, 2018, up 2% from a year ago. Cumulative placements from the weeks ending January 6, 2018 through July 14, 2018 for the United States were 5.14 billion, up 2% from the same period a year earlier.
Note: Starting in 2018, the 19-State totals have been discontinued.
WHOLE CHICKEN & CUT-UP PARTS
Small bird demand is still strong and supply continues to be tight. We can expect this trend to continue through 2018.
BONELESS, SKINLESS BREASTS & CHICKEN TENDERLOINS
The select/small boneless breast market was flat this week. This market continues to be well-supported by the YTD headcount deficit in the small bird category. We can expect the select/small market to trend flat to upward in the near term. The jumbo boneless breast market was down this week, as further processors have fulfilled their inventory targets, and jumbo boneless breast supply has increased. We can expect this market to trend flat to downward in the near term. The medium boneless breast market was down this week; we can expect this market to trend flat to downward in the near term, following the same direction as the jumbo product.
The select/small tenderloin market was slightly down this week. This market is receiving a mixed call from further processors, as their value added frozen inventories are being fulfilled. The continued overall lack of small bird supply will help keep this market stable to tight. We can expect this market to trend flat to upward in the near term. The jumbo tenderloin market was down this week, due to decreased demand from further processors. We can expect this market to trend flat to downward in the near term.
The small wing market was slightly down this week, as demand has not developed yet. We should expect this market to trend flat to upward in the near term. The jumbo wing market was up this week, with both fresh and further processors demand improving at a steady pace. This will continue as wing promotions and frozen inventories are increased for the fall season. We can expect this market to trend flat to upward in the near term.
BONELESS, SKINLESS THIGHS
The boneless, skinless thigh market was flat this week, and we can expect this market to trend flat to upward in the near term. As seasonal and export demand ramp up, labor shortages will heavily come into play.
SOY, CANOLA & PALM OIL Trends - July 20, 2018
Monday’s updated crop condition report put the soybean crop at 71% good to excellent – unchanged from last week, but still well above the five-year average of 67%.
Current weather forecasts continue to look mostly favorable for crop development.
The soybean complex fell to new lows last week (meal being the exception) as the U.S./China trade war continues to dominate the news cycle, with no clear path to resolution in sight, and no current weather threats to the developing U.S. soybean crop.
Spot soybean futures traded down to their lowest price level since 2008.
Renewed strength in the U.S. dollar index and a setback in the crude oil market were also considered negative price inputs for the soybean oil market.
- The August soybean oil market has now fallen over 850 points, or 24%, from the high of $.3615 posted in early November of 2017. Spot oil share of product value has dropped back below the 30% mark. Domestic soybean oil demand remains solid from all sectors, but the market simply cannot raise its head under the weight of the Chinese trade war concerns (lower soybeans) and record crush rates. From a purely technical perspective, the next area of support would come in between $.2675 and $.2700 on the weekly charts.
- New-crop soybean oil ending stocks were raised just 60 million pounds, as higher production from a record crush pace was mostly offset by demand increases for biodiesel, food use and exports.
- Canola oil basis levels continue to move higher, as traders fear that China will be a larger buyer of Canadian canola this year to partially replace and crush what they don’t buy in the way of U.S. soybeans, due to the potential tariff situation.
- Statistics Canada projected their 2018 canola acreage at 22.74 million acres, down from 23 million in 2017, but still above the average trade estimate of 21.88 million acres.
Spot palm oil futures traded to their lowest level in three years, as lower-than-expected production over the last few months has been more than offset by declining exports and falling soybean oil prices. Malaysia’s official palm oil stocks number rose for the first time in six months in June.
Weekly soybean oil export sales for the 2017/2018 marketing year were reported at a net 27,500 tons. The number was near the high end of the range of trade expectations between 10,000 and 30,000 tons.
Dairy Trends - July 20, 2018
Butter pricing is starting to weaken, and we are now in line with 2016 market levels. Production across the country is reported as active. Buying is considered fair to good from retail and foodservice, as inventories continue to increase due to seasonality.
The market continues to be unsettled, due to trade concerns, cold storage levels, and inconsistent barrel demand. Milk supplies are adequate for cheese production needs. Demand is steady, with cheddar demand stable with grilling season. Domestic sales are steady. Sellers are looking for new markets to offset declines from tariffs.
MILK & CREAM
Production across the country is mixed, due to high temperatures in the West. For June: FMO and California markets were all up for Class I and II. Increased pricing should be expected.
The 4th of July holiday that caused prices to rally off the recent lows has slowed down the past few weeks, and allowed shell egg inventories to pick back up. Markets have come back down, due to retailers walking away from promotional activity. With production continuing to outpace the previous year, and expectations for that to continue through 2018, we could see another significant drop in shell egg prices in the coming weeks.
Seafood Trends - July 20, 2018
(WHITES AND BROWNS):
Shell-on Browns: Inventories are adequate. The new season should begin soon. Shell-on Whites: The markets are steady to down, with shrimping in full swing; high demand with tighter inventory could cause pricing to firm up. The season is here now.
The current landings have been producing mid-size puds; we are starting to see inventory building up on 60/70’s -90/110’s.
(BLACK TIGER AND WHITES):
Production on tigers continues to be very low. Larger sizes are extremely tight.
Farmed Asian White shrimp are showing some signs of getting stronger in pricing.
(MEXICAN BROWNS AND WHITES):
We are now about two months away from the 2018 season. As we approach that time, we will see packers start level-setting inventory positions.
Inventory of frozen fillets is in very good shape, as well as fish in the ponds. We don’t foresee any shortages this summer and early fall.
We are seeing stable pricing on imported catfish. New season fish is starting to hit the US. The long-term outlook is still uncertain.
ATLANTIC FARMED SALMON:
Both fresh fillets and frozen portions are heating up. We are now seeing the growth of fish in Chile becoming too large for small-size portions. This could have a direct impact on 4 oz. portions over the next 6-8 weeks.
Inventory is in good shape, with lower pricing than we saw in 2016 and 2017. The quality of the product from Central and South America is very good. Mahi tacos are still a good trend!
Pricing has turned steady, but we will see some downward pricing on Harbor Banks Dry Scallops thru mid-August. Expectations are for a good yield of U-10’s and 10-20’s – especially on 10-20’s. 20-30’s catch has been low, and pricing is stable on that size.
Pricing has turned steady overseas.
Inventory in the US seems to be good. Demand is increasing with other species struggling. Pricing seems to be stable, and we should not see any price increases for the summer season!
Pricing remains high, and inventory on 5-7’s and 7-9’s is very tight. Inspection of imported product is a slow process, causing delays on product moving out of cold storage. Pricing continues to increase. Many distributors are out of product. A great alternative is the 7 oz. Alaskan Pollock (APN 9890469) that was recently launched in the Spring Scoop™. Ask your rep about this highly abundant and cost-effective product.
We expect the overall market to remain very firm, with short inventory and high prices. We expect the trend to continue, especially as we get into Q4.
The fishery for Pacific pollock has produced only smaller fish, just 2-4 oz. fillets. This could cause an inventory issue for frozen loins if they don’t start catching larger fish. Larger fillets of 4-6 and 6-8 oz. are very tight.
Pricing on skin-on fillets and skinless loins is starting to see increases. We expect pricing to continue to increase, following high demand, especially as we get into Q4.
Product from China remains tight across all sizes. We expect to see higher pricing in July and to have challenges with inventory.
(FROZEN STEAKS & LOINS):
Tuna pricing is starting to firm up, and we anticipate increases in the near future.
Swordfish pricing is very stable. Inventory levels are in very good shape.
(RED & GOLDEN):
Product is very short in the marketplace across all sizes. The outlook is for pricing to be higher, with lower inventory. This pipeline will be very empty through the fall.
(BLUE & RED, PASTEURIZED):
Blue swimming crab pricing remains at very high levels. The extremely high prices we have been living with are definitely starting to cause many operators to remove the product from their menus. Demand is slowing on the large sizes, which is now starting to force packers to review pricing. We could see some slight relief as the summer continues, depending on what demand does.
Red swimming crab pricing will be moving up for next week. Inventory is becoming nonexistent, and we expect to see this continue through the summer season.
Mexico blue crab season is in full production, with stable pricing. Inventory positions are very good at this time with the exception of claw meat.
All vendors are currently off the market. Low inventory levels were caused by lower quotas.
Fishing in Canada is now underway in all zones. Pricing continues to move up, as sales are strong by buyers trying to fill the gap from the 2017 season. Outlook is for pricing to remain at these levels or a bit higher for the next few weeks. Time will tell once we start hitting quota restrictions. More fishing areas have been closed due to whale sightings.
NORTH AMERICAN LOBSTER:
The spring Canadian season is now finished. Overall, the season was a bust. Pricing on tails remains elevated while inventory is still tight. Larger sizes will be tight until the Maine season opens up.
LOBSTER TAILS WARM WATER:
Supply on warm water tails is in a good place; however, pricing is heating up as the shortages in the cold water market continue to put pressure on larger sized warm water tails.
We are seeing some poor quality meat on the market. Markets are still uncertain. Buyer beware on something that seems “too good to be true.”