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Beef – Beef slaughter is at approximately 653,000 from 639,000 the previous week. Live weights averages were at 1,377 lb average and dressed weights average at 832 lbs. Total production at 541.6 million pounds.
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Cattle futures fell by the daily permissible limit as the unemployment claims hit the market and concerned traders about the impact on beef demand. The cattle futures have now uncoupled from the stock market and the evidence of a dysfunction is on view for all to see.
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Box prices peaked and the composite turned lower. Rapidly turning over meat counters have caught demand but there remains a large margin at the processing level that can lose many dollars and still maintain generous margins.
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Retailers are finding a calming and more routine level of traffic in stores across the country. Eating at home will become more routine with regular trips to the market for many Americans during this health crisis. Meat counters were watching the shelves for cut selections of consumers as they plan eat at home menus.
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The core participants in cattle futures trading are the commercials. They are always around and always interested in protecting pricing. They include a mixed bag of interest ranging from:
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Supermarkets. These are longs wanting to fix future prices for beef.
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Food service. These include restaurants, and fast food companies who also are long hedgers.
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Processors. They can be long of short but are protecting processing margins or either cattle they buy from producers or beef they sell to retailers.
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Exporters. These are global participants who can be either long or short depending on whether they are buying or selling.
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Cattle feeders. Mainly short hedgers using the appropriate out month for locking prices.
Pork – Pork Slaughter under federal inspection was at 2,639,000. Live weights averaged 288 pounds and dressed weights averaged 215 pounds. Primal Callies, Ribs Hams and Bellies are expected to go down, while Loins and butts inch higher.
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Economists say since COVID-19 crisis, cash prices of major products, such as hams and pork loins, are holding up well, however there is significant weakness in the pork belly market.
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COVID-19 and export potential with China are creating uncertainty in the 2020 pork outlook. As the sway of the pandemic increases unemployment and decreases consumer income levels, demand, rather than supply, will be the driving force in the markets
Chicken – The estimated number of fryers available for marketing based on the 2-week revised average chick placements 6 to 7 weeks earlier was 170.7 million head. Estimated U.S. slaughter for this period was 173.8 million head, or 3.1 million more than estimated available.
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Whole broiler/fryer prices are generally trending weak for most sizes. Offerings of all sizes range light to available with supply levels varying by region. Retail demand is light to moderate in the Eastern region, moderate to good in all other regions. Food service demand remains light to moderate. Floor stocks are sufficient to at times light. Market activity is slow to moderate. In the parts structure, prices for boneless skinless breasts and wings are steady to weak, with larger size wings in the weakest position. The balance of parts are steady at best.
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Offerings of boneless skinless breasts and tenders are moderate to heavy for current needs. Wings are readily available with some discounting noted on medium and jumbo sizes. The remainder of parts are light to moderate. Market activity for parts is mostly moderate. In production areas, live supplies are moderate. Weights are mixed, but noted as mostly desirable.
Turkey - The market on frozen 8-16 lb. hens and 16-24 lb. toms is steady with a steady to firm undertone. Demand light with some watching market developments. Frozen processor offerings of Grade A 8-16 lb. hens and 16-24 lb. toms are light to moderate.
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The market on fresh white meats is steady with fresh tom breast meat having a steady to fully steady undertone, fresh and frozen white trims steady. Frozen white meat market is steady to weak.
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Demand on fresh tom breast meat moderate to instances good, scapula and fresh destrapped tenderloins light to moderate, balance of white trims light and frozen white meat very light to light. Offerings of scapula and fresh breast meat light to moderate, balance of white trims mostly moderate, frozen tom breast meat and frozen tenderloins moderate to heavy.
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The market on bulk parts is steady to firm with tom drums and full-cut wings steadiest. Demand light to good, usually moderate. Offering of bulk parts is light to moderate. The thigh meat market is steady to weak with fresh steadiest. Demand light to moderate. Fresh offerings light to moderate and frozen moderate to heavy. The mechanically separated turkey market is steady. Demand moderate. Offerings light to moderate. Trading mixed ranging slow to moderately heavy, mostly moderate.
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