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Weekly North American market update 05 Nov 2009

Wholesale price gains in prior week (up to Oct 28) were sustained for fed beef and cow beef and improved noticeably for pork.
Weekly North American market update
However, chicken prices weakened, with USDA's 12-city average price index for whole birds easing back 1c to 71.8c/lb, and wholesale breast-meat prices wallowing down to US$1.00/lb and lower, with some breast retail prices as low as US$1.28/lb (for minimum 10/lb package) in one local supermarket in central Pennsylvania.
 
In beef markets, packers last week raised bids for fed cattle by another 1 to 2 cents/lb (ranging 86 to 88c/lb, live basis). Composite carcass cut-out value finished steady today at 141.9c for Choice-grade beef, and 135.8c/lb for Select-grade (latter down 0.6c this week) - with the spread between the two grades at 6.04c/lb, up from 5.38c last week. Beef packers were in the red in week ended October 30, with a small estimated gross margin loss of US$1.30 per head (US$7.00 drop, despite reducing kills slightly), while cattle feeders last week had gross profits near $40 per head. Beef export trends continue uncertain, with Taiwanese politics heating up about US beef imports.
 
Cow beef carcass value edged up 0.4c (to 102.4c/lb, with daily US kills at peak 26-27,000 head) and wholesale value of 90CL fresh boneless cow beef stayed steady at 127c/lb fob in slow trade. Business for imported frozen 90CL cow beef was barely visible during past week as traders said it is near impossible to buy beef down under in Australia-NZ (amid grim industry economics, with currency values also staying high) and equally hard to sell forward at the US end, because of the uncertain economic outlook.
 
Pork carcass cut-out value in past week increased by 1.8c/lb (to 59.3c/lb today), despite daily US kills staying high near 430,000 head. Market hogs at auction showed price improvement of 1 to 2c/lb - ranging today 33.5 to 36.5c/lb (live basis). Sows showed big improvements of up to 6c/lb live basis - ranging from 33 to 38c/lb today at Sioux Falls, SD - near to par with market hogs. These price improvements seem to be attributable in part to improved export sales to Pacific markets (and possibly Russia since its H1N1 ban was lifted) plus increased purchases of products by USDA to help distressed hog producers, who still are deep in red ink.
 
After considerable price falls in prior week (on weather speculation) futures contracts for corn and soybeans increased again this week, by 15 to 25c per bushel, with corn ranging 384-407c/bu and soybeans 995-1,002c/bu at close of today's trading sessions. Live cattle and feeder calf futures contracts improved by 1 to 2c/lb over past week, and are slightly better than month ago.
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