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Weekly North American market update 22 Jan 2010

US pork markets kept rising, while beef and chicken markets maintained last week's strength.
Weekly North American market update
By Greme Goodsir
 
Futures contract prices for both corn (down 15c-bushel this past week) and soybeans (down 33 to 39c-bushel) continued to fall, in wake of expected larger US harvests from last year. In past two weeks, soybean futures have fallen by one dollar per bushel, partly in expectation of a big Argentine harvest) and corn futures are down by 50c-bushel, indicating lower feed costs ahead for livestock.
 
Cattle and pork futures are up marginally (by 1 to 2 cents-lb), but current cash prices for pork jumped dramatically since week-ago - pork carcass composite cut-out value (average wholesale price) is up a sharp 6 cents to 78.6c/lb (and up 10.6c in 2 weeks), even while the live hog trend has been slower.
 
In other US wholesale trade, USDA's 12-city index price for whole chickens stayed firm at 82.2c/lb, while the Choice-grade fed beef carcass cut-out value was steady at last week's improved level of 145.4c/lb. (Select-grade beef was up 1.1c to 141c-lb, with a narrower spread below Choice of 4.4c).  
 
The edge went off last week's hot pace of ground beef sales through fast food restaurants, but retail channels maintained good movement - with many "price specials" varying from US$1.59/lb for 73:27 coarse-ground mixes direct from packers, to US$2.39/lb for 90CL ground beef at top-profile Wegmans.
 
In fast food restaurant trade, Burger King's "burger promotion sales" seemed temporarily slower (and its share price was off 2.7% yesterday, to US$18), while McDonald's share price rose 1.9% (to US$63.48)
 
Grinders paid last week's top price levels near 151c/lb for 90CL fresh boneless cowbeef, but expect some easing ahead, as more offers showed in wake of larger cow kills (28,000 head on both Monday and Tuesday, compared to "normal levels" near 25,000 head). The canner-cutter carcass cow cut-out price is firm this week at 117c/lb. The 50CL steer trim price (other hamburger ingredient) is quoted
75c/lb today (down 2c from week-ago, and expected to go near 70c with plentiful offers showing).
 
The future outlook for all wholesale meat markets looks unsteady, in light of a very uncertain US  economy, and will be dependent on strong support from export sales of pork, beef and chicken.
 
Yesterday's "upset election result" in Massachusetts state (first Republican Senator elected there since 1972) is seen as a big protest vote against the Obama government's agenda, and against all ongoing corruption shame in Washington. US people clearly are worried about the economy, and don't want government to keep getting bigger while jobs in the private sector keep shrinking.
 
Retail food trade keeps reflecting this economic uncertainty. In addition to last week's announcement of Wal-Mart closing 10 of its "Sams Club" warehouse stores, the Belgian Delhaize supermarket group stated this week that it will close 15 of its "under-performing Food Lion stores" in eastern US.
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