$19 Jump in Choice Rib Widens Choice-Select Spread - Ed Czerwein ExplainsMon, 16 May 2016 23:30:41 CDT
On a regular basis, Ed Czerwein of the U.S. Department of Agriculture Market News Office in Amarillo, Texas offers a review of the previous week's boxed beef trade. Here is his report of weekly boxed beef trade for the week ending May 14. At the bottom of his commentary, you can click on the LISTEN BAR to hear Ed's comments.
The daily spot Choice box beef cutout ended the week last Friday at $218.56, which was $14.82 higher compared to the previous Friday. There were 653 loads sold for the week in the daily box beef cutout, which was 9 percent of the total volume.
The comprehensive or weekly average Choice cutout, which includes all types of sales including that daily spot cutout, was $207.15, which was only $0.14 higher and proves how big the impact that formula prices has on the average.
There were 6,847 total loads sold, which was 147 loads higher than the previous week. The formula sales were at 3,472 loads, which was 238 loads higher than last week and it was about 51 percent of the total loads sold this week. We usually see a bigger jump in the formula sales when spot prices jump dramatically because many formulas are based on previous spot. However next week many formula prices will be based off of the $.014 increase in spot Choice cutout from this week, so they should jump quite a bit.
Exports as reported on the box beef report represent primarily muscle cuts and were 999 loads, which was 285 loads higher. 140 loads were sold to our NAFTA neighbors and 574 loads were shipped overseas.
The out-front sales, which won’t be delivered for at least 22 days, were 1,454 loads, which was 289 loads higher than last week.
The largest out-front sales were 1.5 million lbs of ribeyes, whose average out-front price was $13 over current average formula price. Also over 1 million lbs of Choice and Select briskets, whose average out-front prices were $13 lower to $11 higher than current formula prices.
Almost 1 million lbs of Choice loin products that were priced from steady to $4 higher than formula. Meat buyers are obviously willing to lock in product close to current prices levels.
Taking a look at the weekly average primal cut prices. The Choice chuck and round primals were steady to $3 higher. The Choice middle meats - the rib and loin - were $2 lower to $1 higher, but the daily spot Choice rib has jumped $19 in the last five working days, which has helped to widen the Choice-Select spread.
The daily cow cutout was about $1.80 lower at $172.28 and 90 percent trimmings were about $3.40 lower at $215.88 compared to the previous Friday.
The latest report of imported meat passed for entry into the U.S. for week ending May 7 showed that week we passed for import 21,306 metric tons of fresh beef, which was about 400 metric tons lower than the previous week and 4,000 below last year. The year-to-date total tonnage was 14 percent below last year. Australia was down 30 percent and New Zealand was down 17 percent compared to last year, but Canada was up 6 percent and Mexico was up 14 percent.
For the last eight weeks fresh beef imports passed for entry were down almost 38,000 metric tons compared to last year.
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