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Commodities Report: Trade Agreement Uncertainty



The commodity markets were mostly under downward pressure during the mid-spring with grains leading the way.  Fading hopes of a trade deal with China along with bumper crops in South America weighed on soybeans, corn and the food oil markets. This is despite spring planting delays for corn and soybeans. Only four times, including this year, since 2000, has corn planting been under 30 percent complete as of the first week of May. But history shows that this may only temper the available corn supply slightly. 

The U.S. winter wheat crop has progressed under favorable conditions with 64 percent of the crop rated in either good or excellent condition as of early May. This marks the best ratings for the date in nearly a decade. This and expectations of a bumper crop in the Black Sea region have kept a lid on the wheat markets. So fairly attractive feed prices are anticipated to persist in the coming months, which should fuel better protein and dairy production. For most of 2019, dairy farmers have been reducing their herds because of poor margins the prior year. This is tempering milk output and dairy supplies. However, margins have improved substantially and better production and supplies are anticipated later this year. Similar story with chicken as producers have tapped the brakes on output expansion this year. But the outlook for profits is favorable. Better chicken supplies could weigh on the chicken markets in the not-so-distant future. Trade issues remain a concern for the markets. Although a new North American agreement has been reached it appears that it will be 2020 before it will be executed. And negotiations continue with various major agriculture trade partners including China, Europe and Japan. African Swine Fever has significantly reduced the hog herd in China.  Because the country is the world’s largest pork consuming country, typically accounting for roughly 50 percent of use, concerns are building that a world protein shortage could occur over the next year or two. This could underpin pork prices for the foreseeable future and might open additional U.S. export opportunities for chicken and beef down the road. Volatility is likely for the pork markets this summer. 

 

BEEF-Prices are by the pound and based on f.o.b. Omaha carlot.
5/9/19 4/4/19 Difference 5/3/18
Ground Beef 81/19 1.89 1.96 <0.07> 1.85
168 Inside Round (ch.) 1.94 2.25 <0.31> 2.25
180 0x1 Strp (choice) 7.92 6.96 0.96 7.75
112a Ribeye (choice) 8.15 8.06 0.09 8.26
189a Tender (select) 8.94 9.32 <0.38> 9.03
189a Tender (choice) 9.71 9.72 <0.01> 9.77
Veal Rack (Hotel 7 rib) 8.88 8.88 - 7.70

 

OIL AND RICE-Prices per pound based on USDA Reports.
5/9/19 4/4/19 Difference 5/3/18
Crude Soybean Oil .266 .283 <0.017> .284
Crude Corn Oil .284 .285 <0.001> .295
Rice, Long Grain .241 .240 0.001 .262

 

DAIRY-Prices are by the pound and based on USDA reports.
Cheese 5/9/19 4/4/19 Difference 5/3/18
American 1.73 1.68 0.05 1.58
Cheddar (40#) 1.76 1.77 <0.01> 1.71
Mozzarella 1.84 1.85 <0.01> 1.78
Butter(AA)
One pound solids 2.30 2.25 0.05 2.36
Class II Cream
Cream 2.92 2.77 0.15 2.85

 

PORK-Prices are by the pound and based on f.o.b. Omaha carlot.
5/9/19 4/4/19 Difference 5/3/18
Belly (bacon) 1.21 1.46 <0.25> 0.84
Spare Rib (3.5& down) 1.75 1.42 0.33 1.41
Ham (23-27#) 0.74 0.65 0.09 0.51
Bbybck Rib (2-1.75#) 2.54 2.32 0.22 2.24
Tenderloin (1.25#) 1.87 1.85 0.02 1.95

 

POULTRY-Prices are by the pound except for eggs (dozen) and based on USDA reports.
Chicken 5/9/19 4/4/19 Difference 5/3/18
Wings 1.95 2.00 <0.05> 1.47
Bnless Skinless Breast 1.22 1.30 <0.08> 1.29

Eggs
Large 0.56 0.92 <0.36> 1.29
Medium 0.52 0.68 <0.16> 1.02

 

PRODUCE-Prices are by the case and are based on USDA reports.
5/9/19 4/4/19 Difference 5/3/18
Limes (150 ct.) 39.00 29.00 10.00 39.00
Lemons (200 ct.) 29.97 25.97 4.00 28.29
Cantaloupe (18 ct.) 11.70 13.23 <1.53> 6.45
Strawberries (12 pts) 5.25 11.00 <5.75> 9.00
Avocds (Hass 48ct.) 47.25 58.25 <11.00> 38.75
Idaho Potato (70 ct.) 13.25 14.25 <1.00> 13.25
Yellow Onions (50 lb.) 9.25 12.83 <3.58> 5.44
Red Onions (25 lb.) 19.62 17.62 2.00 11.56
White Onions (50 lb.) 49.13 60.53 <11.40> 14.70
Tomatoes (5X6-25lb.) 11.70 13.20 <1.50> 6.95
Roma Tomatoes 9.22 9.69 <0.47> 8.13
Green Peppers 16.05 20.75 <4.70> 9.05
Iceberg Lettuce 8.00 9.49 <1.49> 18.01
Leaf Lettuce 8.78 8.18 0.60 18.36
Romaine Lettuce 9.13 9.40 <0.27> 8.82
Broccoli (14 ct.) 17.43 10.97 6.46 7.25

 

*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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