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Commodities Report: Feed Markets Likely to Remain Volatile



The commodity markets have remained erratic during the last month, driven by uncertainties around trade and the persisting crop challenges in the U.S. Late in June, the USDA updated the U.S. domestic corn and soybean acreage numbers. The 91.7 million number for corn was well above expectations, but the USDA noted that a record 15.3 million acres were left to be planted due to the wet, cold spring.  Soybean plantings were estimated at 80 million, the smallest in six years. Perhaps more importantly a record 33 million acres were left to be sowed. Given that rain continued throughout the eastern corn belt during June, it’s unlikely that all the corn and soybeans were planted.  

The USDA will resurvey farmers in late July with the updated numbers expected to be published August 12.  Until then, the feed markets are likely to remain volatile at a minimum. Our biggest concern remains with corn supplies, but make no mistake, with the smaller plantings, soybean supplies are vulnerable as well.  At this point, it appears that feed supplies will tighten considerably for the 2019-20 crop year (September 1, 2019 to August 31, 2020) but it is not anticipated that prices will be sustained at high-enough levels to greatly impact protein and dairy production. Consequently, solid chicken, pork and milk production gains are forecasted for 2020. But in the case of chicken and milk, output could remain tempered at least through the summer, which should underpin the chicken and dairy markets. 

Beef production is forecasted by the USDA to grow less than 1 percent next year. The USDA’s output number may be understated, but some of the best pasture conditions in years are certainly conducive for herd expansion to intensify. And assuming this occurs, it could limit the amount of heifers sent to slaughter in 2020.  

Adding uncertainty to the available protein supply in the U.S., next year will be African Swine Fever in Asia and the potential for stronger U.S. exports. But at this point there have been minimal signs of a world protein supply shortage. 

 

BEEF-Prices are by the pound and based on f.o.b. Omaha carlot.
7/4/19 5/9/19 Difference 7/5/18
Ground Beef 81/19 1.99 1.89 0.10 1.68
168 Inside Round (ch.) 2.14 1.94 0.20 1.99
180 0x1 Strp (choice) 6.26 7.92 <1.66> 7.83
112a Ribeye (choice) 7.72 8.15 <0.43> 8.11
189a Tender (select) 9.74 8.94 0.80 8.55
189a Tender (choice) 9.74 9.71 0.03 9.42

 

OIL AND RICE-Prices per pound based on USDA Reports.
7/4/19 5/9/19 Difference 7/5/18
Crude Soybean Oil .277 .266 0.011 .2722
Crude Corn Oil .268 .284 <0.016> .2955
Rice, Long Grain .241 .241 - .2689

 

DAIRY-Prices are by the pound and based on USDA reports.
Cheese 7/4/19 5/9/19 Difference 7/5/18
American 1.83 1.73 0.10 1.61
Cheddar (40#) 1.94 1.76 0.18 1.71
Mozzarella 2.01 1.84 0.17 1.96
Butter(AA)
One pound solids 2.41 2.30 0.11 2.31
Class II Cream
Cream 3.17 2.92 0.25 2.98

 

PORK-Prices are by the pound and based on f.o.b. Omaha carlot.
7/4/19 5/9/19 Difference 7/5/18
Belly (bacon) 0.95 1.21 <0.26> 1.46
Spare Rib (3.5& down) 1.22 1.75 <0.53> 1.46
Ham (23-27#) 0.62 0.74 <0.12> 0.62
Bbybck Rib (2-1.75#) 2.62 2.54 0.08 2.46
Tenderloin (1.25#) 1.92 1.87 0.05 2.22

 

POULTRY-Prices are by the pound except for eggs (dozen) and based on USDA reports.
Chicken 7/4/19 5/9/19 Difference 7/5/18
Wings 1.89 1.95 <0.06> 1.39
Bnless Skinless Breast 1.15 1.22 <0.07> 1.13
Eggs
Large 0.73 0.56 0.17 1.01
Medium 0.44 0.52 <0.08> 0.72
Miscellaneous
Whole Turkeys (8-16#) 0.87 0.85 0.02 0.81

 

PRODUCE-Prices are by the case and are based on USDA reports.
7/4/19 5/9/19 Difference 7/5/18
Limes (150 ct.) 11.00 39.00 <28.00> 13.00
Lemons (200 ct.) 32.97 29.97 5.00 33.30
Cantaloupe (18 ct.) 6.73 11.70 <4.97> 8.09
Strawberries (12 pts) 11.00 5.25 5.75 5.50
Avocds (Hass 48ct.) 77.17 47.25 29.92 35.42
Idaho Potato (70 ct.) 15.00 13.25 1.75 14.00
Yellow Onions (50 lb.) 19.75 9.25 10.50 7.13
Red Onions (25 lb.) 18.58 19.62 <1.04> 12.27
White Onions (50 lb.) 30.42 49.13 <18.71> 16.69
Tomatoes (5X6-25lb.) 14.95 11.70 3.25 16.45
Roma Tomatoes 9.35 9.22 0.13 8.30
Green Peppers 13.28 16.05 <2.77> 12.28
Iceberg Lettuce 28.15 8.00 20.15 17.08
Leaf Lettuce 29.05 8.78 20.27 7.28
Romaine Lettuce 25.09 9.13 15.96 7.15
Broccoli (14 ct.) 7.83 17.43 <9.60> 10.14

*Covered party (as defined below) shall not be liable for any direct, indirect, incidental, special or consequential damages of any kind whatsoever (including attorney’s fees and lost profits or savings) in any way due to, resulting from, or arising in connection with the Monthly Commodity Report, including its content, regardless of any negligence of the covered party including but not limited to technical inaccuracies and typographical errors.  “Covered Party” means the American Restaurant Association Inc. and the employees of.  © 2019 ArrowStream


Market information provided by David Maloni of ArrowStream.  ArrowStream is a foodservice supply chain technology company that helps clients capitalize on data to improve their business.  Learn more at ArrowStream.com

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