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Commodities Report: Ag Trading Deals Looking Gloomy



Volatile commodity markets have been the name of the game this summer led by grains and various proteins. The U.S. corn and soybean crops remain behind because of the adverse weather during the planting season. And despite the new acreage and yield numbers from the USDA, the markets will continue to question final crop sizes during the next several months.  Thus, the risk in the grain markets remain. But our general thesis remains that grain price inflation for 2020 will not be enough to greatly impact the protein and dairy supply landscape. Due to the renewed reluctance of China to import U.S. agricultural goods and the rising value of the U.S. dollar (more on both of these in a moment), grain prices are rising sharply in South America which should only encourage bigger plantings there this fall. U.S. grains could struggle with export demand, which may temper the price upside. U.S. dairy markets are losing export share as the world markets decline. This and better milk output in the U.S. could weigh on the markets here in the not-so-distant future. And better year-over-year gains in chicken output as early as this fall could weigh on the chicken complex. Solid exports to China have boosted pork prices. But obviously there are serious doubts that this will continue unless trade relations between China and the U.S. improve. It does not seem they can get any worse with the August talks breaking with the U.S. promising additional tariffs and China threatening to cut off imports from the U.S. and devaluing their currency. The Chinese yuan traded at its lowest level in over a decade against the greenback.  This shook several markets including equities, currencies and bonds. And the U.S. climbed to multi-year highs against some other agricultural trading partners currencies including Australia and New Zealand. This is not bullish for the commodity markets in the U.S., folks. 

BEEF-Prices are by the pound and based on f.o.b. Omaha carlot.
8/8/19 7/4/19 Difference 8/2/18
Ground Beef 81/19 1.86 1.99 <0.13> 1.67
168 Inside Round (ch.) 2.11 2.14 <0.03> 2.03
180 0x1 Strp (choice) 6.08 6.26 <0.18> 5.28
112a Ribeye (choice) 7.83 7.72 0.11 6.98
189a Tender (select) 8.29 9.74 <1.45> 8.60
189a Tender (choice) 9.62 9.74 <0.12> 9.15

 

OIL AND RICE-Prices per pound based on USDA Reports.
8/8/19 7/4/19 Difference 8/2/18
Crude Soybean Oil .272 .277 <0.005> .276
Crude Corn Oil .272 .268 0.004 .280
Rice, Long Grain .243 .241 0.002 .268

 

DAIRY-Prices are by the pound and based on USDA reports.
Cheese 8/8/19 7/4/19 Difference 8/2/18
American 1.79 1.83 <0.04> 1.53
Cheddar (40#) 1.91 1.94 <0.03> 1.61
Mozzarella 1.99 2.01 <0.02> 1.68
Butter(AA)
One pound solids 2.35 2.41 <0.06> 2.31
Class II Cream
Cream 3.34 3.17 0.17 3.19

 

PORK-Prices are by the pound and based on f.o.b. Omaha carlot.
8/8/19 7/4/19 Difference 8/2/18
Belly (bacon) 1.54 0.95 0.59 1.16
Spare Rib (3.5& down) 1.24 1.22 0.02 1.31
Ham (23-27#) 0.92 0.62 0.30 0.63 0.44
Bbybck Rib (2-1.75#) 2.28 2.62 <0.34> 2.29
Tenderloin (1.25#) 1.83 1.92 <0.09> 2.20

 

POULTRY-Prices are by the pound except for eggs (dozen) and based on USDA reports.
Chicken 8/8/19 7/4/19 Difference 8/2/18
Wings 1.87 1.89 <0.02> 1.42
Bnless Skinless Breast 1.03 1.15 <0.12> 1.18
Eggs
Large 0.50 0.73 <0.23> 1.07
Medium 0.38 0.44 <0.06> 0.54
Miscellaneous
Whole Turkeys (8-16#) 0.90 0.87 0.03 0.79

 

PRODUCE-Prices are by the case and are based on USDA reports.
8/8/19 7/4/19 Difference 8/2/18
Limes (150 ct.) 19.00 11.00 8.00 14.00
Lemons (200 ct.) 28.47 32.97 <4.50> 45.80
Cantaloupe (18 ct.) 4.50 6.73 <2.23> 8.09
Strawberries (12 pts) 7.50 11.00 <3.50> 6.25
Avocds (Hass 48ct.) 51.00 77.17 <26.17> 40.08
Idaho Potato (70 ct.) 19.00 15.00 4.00 13.00
Yellow Onions (50 lb.) 12.67 19.75 <7.08> 5.75
Red Onions (25 lb.) 16.75 18.58 <1.83> 16.69
White Onions (50 lb.) 29.46 30.42 <0.96> 21.72
Tomatoes (5X6-25lb.) 15.95 14.95 1.00 9.45
Roma Tomatoes 13.95 9.35 4.00 10.67
Green Peppers 15.18 13.28 1.90 16.19
Iceberg Lettuce 8.54 28.15 <19.61> 7.36
Leaf Lettuce 8.89 29.05 <20.16> 7.11
Romaine Lettuce 11.45 25.09 <13.64> 7.05
Broccoli (14 ct.) 10.13 7.83 2.30 8.89


*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


David Maloni is commodity consultant for American Restaurant Association Inc., a food commodity research, forecasting, consulting, and contract risk management organization founded in 1996 specifically advising the US restaurant and hotel industry and supply chain.

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