Among the many issues generating anxiety for some industry stakeholders is the possible impact on retail beef prices (and hence derived prices at wholesale and live animal levels) of changes in available supplies of competing meats.
While the spot board advanced again and remains perched at 2015 highs, a 4.3% lower overall GDT result and technical triggers sparked sell-side interest, unleashing a wave of pressure that stopped the futures’ bull in his tracks and sent Class III and Cheese futures reeling.
The average price of retail diesel in the United States sat steadily at $2.91 this week, with the Midwest, Gulf Coast and Rocky Mountain regions seeing no change as well.
The Central Atlantic region had the largest decrease of two cents to hit $3.14 this week. The West Coast region saw a one cent decrease but still had the highest retail diesel prices in the country at $3.16. Other regions also saw a one cent decrease.
Class III and cheese futures were prompted by another round of strength in the spot market yesterday, as the block price continued its march to a fresh 2015 high at $1.68/lb., triggering double-digit moves in nearby Class III contracts.
Prices fall modestly through the week at most locations. Prices at most market locations outside of the Northeast fell this week, generally by less than 10%. The Henry Hub spot price began the week at $2.99/MMBtu, fell through the week, and settled yesterday at $2.82/MMBtu. Prices at other major trading hubs moved in a similar pattern; the PG&E Citygate price, serving Northern California, fell from $3.34/MMBtu last Wednesday to $3.19/MMBtu yesterday. Prices at the Chicago Citygate fell from $3.01/MMBtu last Wednesday to close the week at $2.76/MMBtu yesterday.
Macro developments, domestic fundamentals and an evolving technical picture suggest we’re about to snap out of the coiling pattern we’ve been in for the past week and revisit volatility. There appears to be fodder for both bulls and bears.