Soy in Action

Soy in Action

BEEF As expected, beef pricing for middle meats is moving lower. Strips, ribeyes and tenderloins all coming off a bit from pre-holiday highs. I expect we will see this continue right to the end of the month. Grinds on the other hand are keeping prices high and will be moving higher. Ground beef is still the value in the beef complex even with advancing prices. Chucks and rounds will be coming off a bit, but don’t expect too much from these primals as far as discounting. Beef production during the holiday shortened week was 458K head down from the prior week’s 537K head and down compared to last year’s holiday when the harvest was 474, keeping beef tight and expensive. Thin meats are a mixed bag; declines in briskets and sirloin flap while flank still has support pushing higher. With inventories tight, I’d recommend staying ahead of your needs, but you will see better pricing over the next few weeks.  POULTRY We’ll start talking about poultry with avian flu. Our good run has come to an end. Only one case reported, but it is 1.2 million egg layers in Utah removed from the food supply. Talking about current chicken market, wings are on fire moving up strongly for next week. Randoms and tenders are holding steady at least for next week. Production continues strong but demand is pushing this market. I don’t expect chicken to take a big run up we should see a pretty steady market through the summer.  GRAINS China is back to purchasing soybeans after the protracted tariff disruption, booking 132K metric tons with commitment to purchase 25M metric tons through 2028. Shooting started again with Iran; both those events turned a promising decline in soy oil right around with prices inching higher every day.  Corn closed up at $4.48/bushel over last week’s $4.31 close. Wheat is up across the board too. Though we have so much corn we’ll not see much effect from this latest move higher, wheat could push flour pricing up. Right now, the action is in soy.   PORK Pork bellies finally showing some direction closing at $132 up from last week's $119. We’ll keep watching to see if this is an event or a trend, I’m betting trend, but I’ve been fooled a couple times this year, so let's see it play out. If this is the expected belly summer climb, now it when to buy bacon. Butts and ribs holding steady and a good value, loins actually moving a few cents lower makes a great value in protein.  DAIRY The CME closed today with the block up 8, the barrel up 4 and butter moving down 2. This is the most active we’ve seen this trade in quite a while.   Savalfoods.com [https://www.savalfoods.com/?utm_source=podsav&utm_medium=players&utm_campaign=mtttracy&utm_id=podcast] | Find us on Social Media [https://www.instagram.com/savalfoods/?hl=en&utm_source=podsav&utm_medium=players&utm_campaign=mtttracy&utm_id=podcastig]: Instagram [https://www.instagram.com/savalfoods/?hl=en&utm_source=podsav&utm_medium=players&utm_campaign=mtttracy&utm_id=podcastig], Facebook [https://www.facebook.com/SavalFoods?utm_source=podsav&utm_medium=players&utm_campaign=mtttracy&utm_id=podcastfb], YouTube [https://www.youtube.com/channel/UCF4jULNg7FD0hEEgMk18Q0g?utm_source=podsav&utm_medium=players&utm_campaign=mtttracy&utm_id=podcastfb], Twitter [https://twitter.com/SavalFoods?utm_source=podsav&utm_medium=players&utm_campaign=mtttracy&utm_id=podcastfb], LinkedIn [https://www.linkedin.com/company/284655/admin/?utm_source=podsav&utm_medium=players&utm_campaign=mtttracy&utm_id=podcastfb]

The Summer of the Pork Belly

BEEF Beef production last week was 537K head, up from 526K the week prior. We are still in that zone of keeping supplies tight to keep pricing up. The animals that are processed have been in the feed lots longer, growing larger; current cattle are running almost 50 pounds heavier than this week last year. This trend will continue. We are at the big summer holiday. I do expect beef prices to settle once we get past Independence Day and a short production week. I do expect grinds to lead the beef complex this summer; demand will be strong and pricing will be supported by that demand. Another week and let's see if the middle meats will behave like they should in summer and move a bit lower. Thin meats, briskets, sirloin flap, skirts will be the wild card as it takes a lot of animals to fill one case; tight supplies just keep pressure on the pricing, but we could see some reset on thin meats if demand does not hold. All in all, stay ahead of your needs, but I wouldn’t go too far out as I do think we’ll see more favorable prices in the next few weeks.  POULTRY Chicken production continues to outpace last year, but I do think we’ll see a bit of a slowdown in production, not a pullback, but we’ve been running about 2% ahead of last year and I’m seeing some pullback to about 1% over last year. Enough to get some push under the market to keep prices supported. Wings are seeing good support and moving higher next week. Boneless skinless randoms up again next week, while tenders are lower again. A few weeks ago, tenders were well over the cost of random breasts; next week that flips as tenders decline and random breasts increase. Still, plenty of chicken and favorable pricing.  GRAINS Corn continues in its narrow trading ban closing at $4.31 up from last week $4.19. We are finally seeing breaks in soy oil pricing; lower prices should be arriving in the next couple weeks to break this recent run up. Wheat is a mixed bag but mostly lower.  PORK The great summer of the pork belly continues, closing today at $119. Up $3 from last week but still great pricing for this time of year. Butts, ribs and loins are all down a bit again as pork is ready to replace beef demand, but consumers have made the choice for chicken. Still pork is there and an excellent protein value.  DAIRY Barrel and block both took the holiday off both moving less than ½ cent for the week, while butter took to moving higher, up 13 for the week. Markets will be closed on Friday, July 3.  Savalfoods.com [https://www.savalfoods.com/?utm_source=podsav&utm_medium=players&utm_campaign=mtttracy&utm_id=podcast] | Find us on Social Media [https://www.instagram.com/savalfoods/?hl=en&utm_source=podsav&utm_medium=players&utm_campaign=mtttracy&utm_id=podcastig]: Instagram [https://www.instagram.com/savalfoods/?hl=en&utm_source=podsav&utm_medium=players&utm_campaign=mtttracy&utm_id=podcastig], Facebook [https://www.facebook.com/SavalFoods?utm_source=podsav&utm_medium=players&utm_campaign=mtttracy&utm_id=podcastfb], YouTube [https://www.youtube.com/channel/UCF4jULNg7FD0hEEgMk18Q0g?utm_source=podsav&utm_medium=players&utm_campaign=mtttracy&utm_id=podcastfb], Twitter [https://twitter.com/SavalFoods?utm_source=podsav&utm_medium=players&utm_campaign=mtttracy&utm_id=podcastfb], LinkedIn [https://www.linkedin.com/company/284655/admin/?utm_source=podsav&utm_medium=players&utm_campaign=mtttracy&utm_id=podcastfb]

The Dog Days of Summer

BEEF We hit Independence Day next weekend and the start of the “dog days of summer." Once we get clear of the holiday I do expect we will see a market reset, especially on middle meats. I’m not looking for a crash, but I do expect we will see a steady decline over the month of July possibly right into August. There is some data to suggest ground beef is hitting a bit of a ceiling for customer acceptance. I do think we will push past that resistance, but it will be slowly inching higher; if consumer push back is strong enough, we could see grinds settle out where they are. We’ll keep watching but in my opinion we will see moderate increases continue into August. With production last week only 526K head just up from 524K the week prior, inventories will continue to be tight. Stay ahead of your needs. Looking at New World Screw worm, eight new cases, one sheep, one goat, and six head of cattle. Expect the southern border to remain closed to live animal imports through the rest of this year, and most likely well into 2027.  POULTRY Chicken production continues strong, they are not letting up. Demand for boneless skinless random breasts and party wings are moving prices higher next week. Tenders which were out of line with randoms just a few weeks ago have declined to be comparable in costs. Good to keep pushing out that chicken. On the Avian Flu beat, one new case affecting 3K birds.  GRAINS Overall grains are moving lower especially soy oil. Finally breaking lower from the recent highs. I don’t think we will return to the low markets of early this year, but pricing is coming off. Wheat closed at $4.19 down from last week’s $4.30. Wheat closed at $5.84 down from last week’s $6.11. I do expect to see lower grain costs continue as long as we don’t have a major disruption.  PORK Pricing on pork bellies declined again this week, closing today at $116 down from last week’s $118. This is not an expecting market level for early summer. I’ll keep buying bacon at this level, and you should too. Butts are coming off again next week and loins moved up a few pennies but still offer a great value in protein.  DAIRY And a split decision on dairy markets this week, through Thursday’s close, barrel is up 3, while block is down 4 and butter continues lower down 6 for the week. Dairy markets are at good levels for buying now. We’ll keep watching.  Savalfoods.com [https://www.savalfoods.com/?utm_source=podsav&utm_medium=players&utm_campaign=mtttracy&utm_id=podcast] | Find us on Social Media [https://www.instagram.com/savalfoods/?hl=en&utm_source=podsav&utm_medium=players&utm_campaign=mtttracy&utm_id=podcastig]: Instagram [https://www.instagram.com/savalfoods/?hl=en&utm_source=podsav&utm_medium=players&utm_campaign=mtttracy&utm_id=podcastig], Facebook [https://www.facebook.com/SavalFoods?utm_source=podsav&utm_medium=players&utm_campaign=mtttracy&utm_id=podcastfb], YouTube [https://www.youtube.com/channel/UCF4jULNg7FD0hEEgMk18Q0g?utm_source=podsav&utm_medium=players&utm_campaign=mtttracy&utm_id=podcastfb], Twitter [https://twitter.com/SavalFoods?utm_source=podsav&utm_medium=players&utm_campaign=mtttracy&utm_id=podcastfb], LinkedIn [https://www.linkedin.com/company/284655/admin/?utm_source=podsav&utm_medium=players&utm_campaign=mtttracy&utm_id=podcastfb]

The Need for Beef

BEEF We’ll start again with the New World screwworm. We now have 6 confirmed cases in Texas and 1 in New Mexico. Affected animals are a dog, a goat and 5 cattle. While our border with Mexico has been closed for months now to live animals, Texas cattle is now barred from export to Canada and I’d expect that list to continue to grow. This is a growing issue that will affect our beef industry for the foreseeable future.  Beef production was 533K head last week, up from the holiday shortened prior week of 448K. This keeps inventories tight and product prices pushing higher. Middle meats, those ribeyes, tenderloins, and strips are finding support to continue moving higher. Chucks and rounds are holding steady for now though they are not big demand items in the summer. Ground beef is the big demand item and it's moving higher every day. Briskets and sirloin flap are moving lower, but I don’t think we’ll see this for long. It’s a market where I’d make sure I stay ahead of my needs and keep inventory on hand. This market is moving higher.   POULTRY The declining chicken market is done. Pricing will be moving higher next week on boneless skinless random breasts, tenders and party wings. Compared to other proteins, still a great value but the declines of the last month are done. Chicken production continues strong up about 2% over last year. There is plenty of chicken in production. On the avian flu report, only three new cases affecting 20K birds. The summer is looking good for avian flu.  GRAINS Corn continues to be a great value closing at $4.25/bushel today, that’s down from $4.39 last week. Soy has pulled back a bit from the highs we saw last week, but I would not be surprised if they go on another run. High fuel prices put soy in play with biofuels, that is not over. Wheat is moving lower; I do think we’ll see lower flour costs soon.  PORK Pork bellies holding steady for the week, closing today at $120, about the same as last week. This will be moving higher soon, but it is a great price right now. Butts were on a tear higher, but they seem to have leveled off, we may see some better pricing shortly. Ribs are about as high as expected to see them this year. Loins continue to be the value in pork.   DAIRY CME Limited moves on the CME this week, thru Thursday’s close, butter is down 2, block is up 1, and barrel is up 2. Let's look for a quiet market at least the next couple weeks.  Savalfoods.com [https://www.savalfoods.com/?utm_source=podsav&utm_medium=players&utm_campaign=mtttracy&utm_id=podcast] | Find us on Social Media [https://www.instagram.com/savalfoods/?hl=en&utm_source=podsav&utm_medium=players&utm_campaign=mtttracy&utm_id=podcastig]: Instagram [https://www.instagram.com/savalfoods/?hl=en&utm_source=podsav&utm_medium=players&utm_campaign=mtttracy&utm_id=podcastig], Facebook [https://www.facebook.com/SavalFoods?utm_source=podsav&utm_medium=players&utm_campaign=mtttracy&utm_id=podcastfb], YouTube [https://www.youtube.com/channel/UCF4jULNg7FD0hEEgMk18Q0g?utm_source=podsav&utm_medium=players&utm_campaign=mtttracy&utm_id=podcastfb], Twitter [https://twitter.com/SavalFoods?utm_source=podsav&utm_medium=players&utm_campaign=mtttracy&utm_id=podcastfb], LinkedIn [https://www.linkedin.com/company/284655/admin/?utm_source=podsav&utm_medium=players&utm_campaign=mtttracy&utm_id=podcastfb]

Pressure on the Herd

BEEF Let's start with the bad news. We’ve been expecting this to happen for several months, yesterday the USDA announced the discovery of the New World Screw Worm infecting a calf in La Pryor, Texas, about 50 miles north of the border. This will keep the border closed to live animals for the foreseeable future, keeping pressure on the already small domestic beef herd. The New World Screw worm is a flesh-eating parasite that has been eradicated from the US since the 1970s, but it's back! Control measures include releasing sterile male flies to reduce population growth. This is certainly worth keeping informed about. Now, with that bit of cheery news, let's look at current beef markets. Last week was a holiday week so harvest was only 448K head. Demand remains good, not great. I’m expecting to see market moves higher as we head to Independence Day. Grinds continue to increase every day. Middle meats were struggling to move higher the last couple weeks, but they are back on track with steady moves higher, again I think right into Independence Day. Thin meats, brisket, flanks, sirloin flap, are mostly steady to lower. This continues to be a market with tight supply, make sure to stay ahead of your needs.  POULTRY The decline in boneless skinless breast meat continues next week. The heavy production we’ve seen so far this year is finally catching up a bit on the suppliers. They are discounting breast meat to keep it moving. Tenders are holding steady another week while wings finally bottomed out last week and are moving up, just a bit, but they are moving up again. The avian flu reports over the last week, 7 new cases affecting 107K birds, mostly ducks.  GRAINS Soy was up like a rocket all week, until today. There will be increases in soy oil in the short term, hopefully we can see this turn back down. Wheat is giving back all its recent gains and we should see some lower prices on wheat. Corn closed at $4.39 today down from last week’s $4.62. New crop estimates will not be pushing this market higher anytime soon.   PORK Pork bellies closed today at $120 up from last week’s $112. This is still great pricing for this time of year. I do expect bellies will be moving higher into the summer. One analyst estimated we could see $180 bellies which should be about the top end of this run. Butts continue to be in demand and pushing prices up. Ribs getting the same push higher. Loins are holding steady, don’t see anything to push them higher right now.   DAIRY CME Thru Thursday’s close Butter is up 7, taking back all those recent declines. Both barrel and block are down 1. Production is good, I don’t see much to push cheese higher right now.  Savalfoods.com [https://www.savalfoods.com/?utm_source=podsav&utm_medium=players&utm_campaign=mtttracy&utm_id=podcast] | Find us on Social Media [https://www.instagram.com/savalfoods/?hl=en&utm_source=podsav&utm_medium=players&utm_campaign=mtttracy&utm_id=podcastig]: Instagram [https://www.instagram.com/savalfoods/?hl=en&utm_source=podsav&utm_medium=players&utm_campaign=mtttracy&utm_id=podcastig], Facebook [https://www.facebook.com/SavalFoods?utm_source=podsav&utm_medium=players&utm_campaign=mtttracy&utm_id=podcastfb], YouTube [https://www.youtube.com/channel/UCF4jULNg7FD0hEEgMk18Q0g?utm_source=podsav&utm_medium=players&utm_campaign=mtttracy&utm_id=podcastfb], Twitter [https://twitter.com/SavalFoods?utm_source=podsav&utm_medium=players&utm_campaign=mtttracy&utm_id=podcastfb], LinkedIn [https://www.linkedin.com/company/284655/admin/?utm_source=podsav&utm_medium=players&utm_campaign=mtttracy&utm_id=podcastfb]