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Weekly North American market update 04 Dec 2009

Thanksgiving observances/activities (from last Thursday through Sunday) appeared more subdued this year, amid recession conditions across the US (Canada has just now officially emerged from recession).
By Graeme Goodsir
 
Turkey and ham were once again the main foods at family festive tables, but food banks reported a big increase in people requesting charity hand-outs this year.  "Black Friday" shopping sprees for bargains were more frugal, with more online purchases being reported this year, while physical visits to retail stores held even (but with more selective spending).   
   
In the current week (3 days since Monday - as consumers sought to "turkey-out" and revert to more normal diets) there has been some uptick in wholesale prices for pork and chicken (from low depths - with producers still suffering financial distress) - also some improvement for lean cowbeef (as fall cow-run supply pressure started easing a bit last week).  

Fed beef prices remained fairly steady, with Choice-grade carcass cut-out value quoted today at 139.6c/lb (down 1c from week-ago, including a sharp 2c fall today) & Select-grade carcass cut-out at 133.4c/lb (up 0.7c) - the spread is lower at 6.2c.  
 

The drop-credit value for US beef packers has kept improving and is currently quoted at $9.77 per 100-lbs (up by $1.30 in past month) and thereby enhancing slaughter margins, which improved to near $26 per head in Thanksgiving week - while fed cattle prices eased slightly to range 81-83c/lb (live basis).  Cattle futures contract prices bobbled over the past week, but finished today down 1c/lb for slaughter cattle (in a range of 82-87c/lb) and up 1c for feeder calves (94 to 97c/lb). 

Feed cost factors weighed into futures scenerios - corn futures contract prices rose near 15c-bushel during past week (to 392-417c range), while soybean futures were around 10c-bushel lower (ranging 1034c to 1046c up to May delivery in 2010)  
  
Fresh 90CL boneless cowbeef prices recovered significantly this week - up from lows of 122c/lb fob two weeks ago, to a range of 135-138c/lb delivered to east/west coasts - as supply pressures eased a bit in face of grinders still staying very busy supplying beef patties to fast food restaurants. Imported 90CL frozen cowbeef stayed nominally in a range of 138-139c/lb fob (for spot trade - 140c out-front) - still with very little trading visible, due to "disconnects" between US importers and southern hemisphere exporters. 
 
Several Australian beef packers are reported to be making seasonal plant closures prematurely, due to scarcity of suitable cattle and to the high $Aus (currently near $US 0.93, and causing export price returns to become red ink). 

US wholesale pork markets are stronger this week, apparently helped by improving export sales, in face of continuing high daily kills near 430,000 head, and with ham prices holding up in post-Thanksgiving trade. US retail sales volume of hams appeared very good during November, helped by discounted promotion prices, and by ongoing retail promotions for Christmas ham trade.  The pork carcass cut-out value today is quoted at 62.3c/lb (up a full 3c from week ago), while live hog values at auction are up 1.5c/lb, in 36-40c/lb range. 

Chicken wholesale trade also showed some apparent modest recovery (helped perhaps by better fast food and foodservice sales over the Thanksgiving shopping weekend). Wings continue to be the high-flying item as spicy bar food for escapists from recession blues, and for sports fans watching TV - wholesale prices are currently in a range of 150c to 166c/lb (bone-in), while boneless, skinless breast meat prices are still wallowing from below $1.00/lb to irregular values ranging from 109c to 130c/lb between midwest and east coast USA. 
 
In spite of lower exports to Russia during recent months, wholesale prices for leg quarters have been fairly steady in a range of 35-40c/lb - helped by improving US domestic demand by many consumers who now see "dark chicken meat" as a more attractive low-price food item than they did in more prosperous days. 
  
**For week ending Wednesday 2 December 09
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