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Egg Market Week of January 11, 2016

TONE: Retail demand fairly good. Larger sizes fully adequate. Mediums

improving. Market testing.

The regional egg markets are as follows:

Northeast Midwest Southeast South Central

Lg 1.14 1.11 1.16 1.19

Md .86 .81 .82 .79

Source: Esbenshade, Inc.

Weekly Market Highlights

Hard red spring and winter wheat futures have been at or near multi-year low prices nearly all of the three

weeks since our last communication.

U.S. wheat export outlook is even more dismal following Argentina’s announcement that they were a lifting

their export tax. The next week a large sale of wheat was made to Egypt for the first time in several years.

Bearish global economic news and larger future wheat plantings in Argentina could help keep downward

pressure on prices, and possibly lessen demand for, U.S. Wheat.

Unusual for the season, warm El Nino weather with flooding in parts of the Midwest and Southern U.S. could

take a toll on soft wheat, but it is far too early to speculate what that toll will be.

We expect futures to remain under pressure, but basis premium prices will need to stay firm and at times could

spike to keep producers selling and wheat moving.

Facts on Flour Soft Red Winter (SRW)

Soft Red Winter Wheat is grown in the eastern third of the United States. SRW is high yielding wheat, but

relatively low in protein, usually about 10%. SRW is used for cakes, pastries, flat breads, crackers and snack

foods. This fall-seeded wheat comprises about fourteen percent of U.S. wheat exports.

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Futures & Basis Markets

KC Future

Spring 15% Basis

Mpls Future

Winter 13% Basis

Flour pricing consists of a combination of Wheat futures prices and Basis Premium prices per bushel. Information contained on this chart closely resembles Gold Medal All Trumps, Mpls. Future + 15% Basis, and Harvest King, KC Future + 13% Basis. This chart does not reflect changes in millfeed values.

This Chart is meant to indicate Market Direction Only.

JANUARY 7, 2016

Produce Market Update “Produce from the Ground Up”

For the week of: January 10th 2016

I INGREDIENTS 1 lb. Roma tomatoes 1 English cucumber ½ medium red onion, sliced 2 avocados, diced 2 Tbsp. Extra virgin olive oil or sunflower oil Juice of 1 medium lemon, (about 2 Tbsp.) ¼ cup (1/2 bunch) cilantro, chopped 1 tsp. Sea Salt or ¾ tsp. Table Salt ⅛ tsp. Black Pepper

INSTRUCTIONS Place chopped tomatoes, sliced cucumber, sliced red onion, diced avocado, and chopped cilantro into a large salad bowl. Drizzle with 2 Tbsp olive oil and 2 Tbsp lemon juice. Toss gently to combine. Just before serving, toss with sea salt and pepper.

The above recipe is from My good friend Agent Patty Hensley at the USDA, who obtained this from

natashaskitchen.com . Thank you for sharing Miss Patty.

AVOCADO -- Mexican shipments dipped last week as they shut down for the holiday.

Shipments will start to pick up over the next few weeks leading into the Super Bowl period. We are still seeing heavier volumes coming on the peak sizes of 36s/ 40s followed by 48s, and the availability on the smaller sizes 60s/70s lighting even more and continues to be an issue for most shippers. This new crop fruit is lower in maturity and will take longer to ripen and not darken as much when ripen. Ripe fruit could still be green in color as the skin isn’t mature enough for it to darken. Color is not an indication of ripeness, pressure is.

BROCOLLI -- Expect high prices for at least one to two more weeks; rain and freezing

temperatures continue to slow growth and cause quality problems such as hollow core, knuckly branches, and purple beads. Most heads are small, but flavor is good

CARROTS -- Cold weather continues to hamper size growth on the carrot crop. Percentage of jumbo size is very low and we are seeing markets jump up this week.

CAULIFLOWER -- This week looks to be better with supplies basically due to limited

demand. The market has finally shown some signs of relief as well. The quality is still fair at best with yellow discoloration in some lots. Also arrivals have been showing up with black to brown spotting.

CELERY -- Prices are up. Rain and low temperatures are reducing yields. Quality is

good, but pith is a minor issue

LETTUCE -- The market is escalating. Rain will delay harvests and tighten stocks all

week. Epidermal blistering and peeling, lower weights, pale color, pinking, blister and

shortened shelf-life are industry-wide problems.

Crews again will be delayed in harvesting until mid-morning. Shorter hours and lack of

labor will continue for the entire week. Next week’s crews are expected to be better, but

still tight this week.

LEAF LETTUCE / ROMAINE --. Crews will be delayed due to rain in all the growing

regions of Yuma and southern California for the first half of this week. Temperatures will be better however compared to last week. Delays in loading are inevitable. Short days and lack of labor will continue for the rest of this week. Next week, shippers are expecting a better count of workers. Blister and epidermal peel continue to be seen on romaine.

.PEPPERS/CUCUMBERS/SQUASH -- Peppers -- Prices are holding steady on both coasts; supplies are sufficient. Quality is

very good, yet rain and cold weather have caused slight bruising and stem decay in some crops

Cucumbers --.Production will be interrupted or extremely light in Florida due to recent

rains and are expected to remain that way through December. Northern Mexico (Sonora)

will be supporting the market until districts in Sinaloa begin sometime next week. Supplies

from Mexico will be improving over the next week with favorable growing and harvest

conditions throughout the country.

Zucchini & Yellow – Central and South Florida - Movement on cucumbers expected to

decrease. Trading exceeds supply. Prices medium and fair quality much higher on waxed

. Quality is generally good.

POTATOES -- Market looks like as we move into Burbank’s they are going to push it

up. As this is beginning to unfold, it certainly has the makings to be one of the worst in years. Extremely cold weather is limiting production and tightening supplies

ONIONS -- The onion market is steady. Both Jumbo Yellows and Reds are plentiful. As an option;

many sheds offer a small Jumbo at a discount that generally have a more constant

appearance on the shelf. Medium sizes are a bit tight and firmer priced. Colossal and

Super Colossal are tight in Washington but are more readily available in Idaho. Quality is

generally good on all colors, however some reporting issues with Reds.

TOMATOES -- Rounds: Tight supplies are keeping the market up. Production is limited in Florida and

Mexico; weather is erratic in both regions. Prices will remain elevated through January. Small sizes dominate all crop

Cherry and Grape: The market is higher. Supplies are tightening, with Florida up in

pricing. Mexico crossing grapes, however, supplies are also lighter. Quality is Good.

Roma: The market is higher. Supplies are very short this week. Some shippers finished

up production and other delayed by rain. Mexico also hampered by rain, causing shorter

supplies out west. Quality is Good/Fair

APPLES / PEARS -- Red delicious are steady and most shippers are still peaking on

72/80/88s. 113 and smaller red supplies are still short. Washington’s red delicious volume

is down by 30% from last year so expect a season-long strong market. Golden delicious

are steady and are still producing mostly Wash-Extra 100/113s. Large Golden supplies

remain very short! Washington’s golden delicious volume is down by 25% from last year

so expect them to astay strong for the entire season. The Granny-smith market is steady

on all sizes and they are peaking on 88/100/113s. Most Granny shippers don’t have much

larger than an 88 and they have limited supplies of 125’s and smaller. Galas are steady

on all sizes. Most Gala shippers are still peaking on 100/113s and don’t have much

available on 88’s or larger. Fujis are steady and are peaking on extra-fancy 80/88/100’s.

Honeycrisp are steady to higher and the market is strong due to light supplies.

STRAWBERRIES -- Rain in Oxnard will impact availability on a day to day basis,

meanwhile Santa Maria will have some production by mid-January . Central Mexico will ramp up and level out in February, while Baja will ramp up towards the end of January

bringing more conventional and organic supply. The rain in Oxnard will most likely bring soft and bruised fruit , therefore we recommend that you keep inventories tight to optimize shelf life . Warm weather continues in Florida; growers picking overnight to minimize bruising and help with overall quality

CITRUS -- Lemons: Demand remains very good. The Desert crop is 70% harvested and looks to finish ahead of schedule. The small Central Valley crop is 30% harvested. Both areas are producing a larger proportion of fancy grade and is peaking on 140s and larger fruit, which is in good availability, but still leaving us in a in tight supplies on 165s and smaller fruit. Expect tight supplies on smaller fruit to continue through January and maybe longer.

Oranges: Shippers are still in holiday mode, trying to adjust picking and packing to match

the anticipated business. Cold weather in the growing areas is helping toughening up the skin and bring on more natural color to the Navels and shipper no longer having to gas fruit. Navel crop is peaking on 88s/113s/72s. Cara Cara Navels and Blood oranges have also started, another great seasonal varietal for the winte

Limes: Good availability across the range of sizes and quality is very good on new crop.

GRAPES --.Market is starting to be very active with recent rainy weather taking a toll on

crops. Demand for Red Globes will be picking up in late December.

MELONS -- Cantaloupe & Honey Dew --. Cantaloupe supplies are fairly light but adequate for the

current demand. Offshore melons continue to trickle in on the west coast and supplies will build slowly. The quality is very good overall. The peak size is 9ct and 6ct with very few 12ct and even less 15ct. The 18ct sizes will not be available for several more days. The large size fruit trend will continue throughout December. We are experiencing decent demand on the cantaloupes that are arriving. Supplies will be lighter than normal for the month of December and the peak size will be 9ct to 6ct. The current market is steady on all sizes Demand is good on all sizes of Honey Dews . The peak size for the offshore is 5ct while the small amount of Mexican dews are peaking on 6ct . Offshore dews continue to arrive on the west coast in low volume and some lots have spotting and occasional stem decay. Honduran grown honeydews will begin to arrive in Florida the first week or two of January. Mexican dews continue to ship out of Nogales AZ however many growers have finished and the volume is very light

Watermelon --. Seedless watermelon supplies have remained steady and we are

seeing a lighter demand which will help push the market down. Quality is average. We are seeing issues with old crop, however new crop does look better. Seeded fruit is available with FOB Nogales, the mini seedless have great availability and low prices.

Ron Orr

Produce Peddler Pro Mark [573] 680 – 1066 [email protected]

Market Watch . . . . . . .

Market Watch

January 8, 2016


• Outside factors have been major leaders throughout the week.

Soybean Oil

• BAGE reported Argentine bean plantings at 92.9%, on pace with last year. Acreage estimate unchanged.

• USDA Ag Attache lowered its Brazilian production estimate 2 MMT to 98 MMT.

Crop Updates

Expected Value Range $26.00 - $28.00 cash

Soybean Oil Market Pricing Trend

Value Ranges *

The information above reflects the current opinion of Stratas Foods but does not represent a guarantee of future market conditions. All final oil booking decisions should be made by the end customer and not Stratas Foods.

* Value ranges represent good booking levels if the market dips into this range

Meal demand is a major concern for crushing pace.

South American weather is a key factor to watch; recently favorable for crop development.

Low exports on the holiday weeks were disappointing.

Misc. Influences Impact

Key FactorsRecent Trend

January 8, 2016

BearishBullish Neutral

• US soy oil exports were a meager 3.6 tmt for the holiday week ending Dec 31, 2015. The total commitments now total 560 tmt, 100 tmt ahead of last year’s pace and 54% of the USDA annual estimate.

• Energy markets have been on a volatile ride over the last few weeks with oil trading to 11-year lows early in trading on Thursday.

• Chinese stocks down around 10% on the week, currency devaluation, and the circuit breakers hit closing the market twice causing them to be removed for Friday’s trading session.

• Soy board crush is making new lows. Oil share currently at 35.6% across the Jan, March and May contracts. These are the same levels we have been floating around for almost a month.

• The short fund positions in beans and meal have propped up futures this week. As we approach the USDA WASDE next week, we don’t expect much change in their position.

• Crush demand is seen to be slowing and the upcoming NOPA will be telling.

• Meal has been hovering and testing contract lows continuously but can’t seem to truly break through.

Flash Summary


• USDA WASDE Tuesday at 11AM.

Corn Oil

• BA Grain Ex. reported corn planting progress at 83% vs. 69% in the last report on Dec 23 and 81% last year. The forecast still calls for a 16% reduction in planted area. Therefore, production is estimating lower ranges are in the 22-26 MMT range vs. last year’s 27.0 MMT. Yields have seen increases for the several crops so that could close the gap on production losses.

• Brazilian crop estimates range from 82-84.5 MMT, slightly lower than last year’s 85.0 MMT.

Crop Updates


Corn Oil Market Pricing Trend

Value Ranges *





• US corn export sales were also slow, as expected for the holiday week at 253 tmt.

• Short specs playing defense as the quarterly stocks report can often hold surprises.

• Stock estimates for the USDA WASDE are averaging 11,237, ranging 11,073-11,440 milbus. Minor changes are expected for final production numbers, average 13,646, range 13,525-13,770 milbus. Nov WASDE was 13,654 milbus.

• Census reported Nov. DDG exports at 940 tmt vs. 1040 in Oct, 632 last year. China has seen decreases.

Flash Summary


Ethanol demand remains strong.

Corn oil export demand steady.

Demand for HFCS remains in question.

January 8, 2016


Large stocks in competing oils make a bull story difficult to sustain.

Strong seed export sales.

Census reported good US canola imports in Nov.

• Trend sideways until a compelling story pushes the market.

Canola/Rapeseed Oil

• Strong exports and crush have been helpful in moving the large crop supplies in Western Canada.

Crop Updates


Canola Oil Market Pricing Trend

Value Ranges *





• A weaker Canadian dollar has lent support to canola futures that have felt major pressure from the weakness in equities and competing oilseed markets. The outside markets have been leaders the majority of the last few weeks but any misdirection in canola futures has been attributed to Canadian dollar changes.

• Record crush rates have lent support to canola pricing. COPA reported a strong weekly crush total of 165.2 MMT on Monday.

• China has large canola/rapeseed stocks, but has also been the major buyer of Canadian canola oil. If purchases are seen slowing, it could be impactful.

• Losses and volatility in crude oil should be watched.• Turmoil in global financial markets have pressured the

market. • Technical issues as the front month of canola futures

broke the key C$480/mt. triggered sales and weight on pricing.

Flash Summary


January 8, 2016


• MPOB production, exports and stocks out early Monday.

Tropical Oils

• MPOB to issue monthly production update Monday.• Trade looking for Malaysian production down 17.5%

from November.• Jan 1-10 output down 10.5% vs. same period last

month. El Nino effects being felt.

Crop UpdatesPalm and Coconut Oil Market Pricing Trends





El Nino effects visible in lower yields.

Export demand has been sluggish, to be watched.

Weather issues remain in question.

January 8, 2016

• Monthly MPOB reports Monday will be the key for the market in the short term. Average trade expectations peg stocks down 6.1% from November, but up 30% from last year.

• Export demand has remained mostly routine to start off 2016, with China a regular buyer.

• CPO import margins are positive in China, negative in India.

• Lauric oil prices have remained supported by concerns from the recent typhoon.

• Copra and palm kernel supplies have become more scarce, which has hurt crush margins and thereby limiting oil supplies.

• CNO and PKO prices to US shores have remained elevated.

• Palm usage in biodiesel remains a large question.• Indian imports up overall; however, the palm portion

only seen at +1%, soy is +40%. Palm appears uncompetitive.

Flash Summary

December 31, 2015

GRAINS AND WEATHER Cooler December temperatures brought us back to reality as more snow fell just in time for Christmas. The 8-14 day climate outlook for January 11 – January 17 shows normal to slightly below normal temperatures for much of the country. Only the far Western states should anticipate above normal temperatures. Precipitation projections are mixed, with normal to slightly above normal precipitation levels projected for the Western half of the US, with the Eastern half expecting normal to slightly below normal precipitation. The US Drought Monitor map for the primary US crop production states has very few isolated areas under abnormally dry or moderate drought conditions. The far Western states continue to be under varying degrees of severe, extreme, and exceptional drought, stretching from Arizona to Montana and West, with the driest conditions found throughout the state of California. On Wednesday, December 9th USDA issued its Crop Production and WASDE estimates. It confirmed adequate to surplus carryover inventory expectations for the 2015/16 season. Only minor usage adjustments were made as US grain production figures will not be revised until the January Crop Production Summary report, due out January 12th. US corn yield remained at 169.3 bushels per acre, for a production total of 13.654 billion bushels. 2015/16 corn ending stocks grew 25 million to 1.785 billion bushels. Season average farm prices were unchanged at $3.65. US soybean yield remained at 48.3 bushels per acre, for a production total of 3.981 billion bushels. 2015/16 soybean ending stocks were unchanged at 465 million bushels with season average farm prices unchanged at $8.90. The 2015 Crop Production Summary report, due out Tuesday 1/12/16, will provide industry participants a baseline from which to make decisions. Many still predict grain prices to stay range bound in the near term, with corn trading $3.60-$4.00 and beans $8.50-$9.00. US Planting intentions will settle the annual acreage debate in March, but early expectations are for more corn acres in 2016 as production economics continue to favor corn. In the meantime, keep an eye on South American crop conditions and US weather. CATTLE AND BEEF Steer carcass weights averaged 907 pounds (+15# vs 2014) and heifer carcass weights averaged 843 pounds (+19# vs 2014) for the week ending December 19th. These were both two pounds lighter than the previous week and further seasonal declines are expected through the winter and into early spring as winter weather takes its toll on feedlot performance. Cattle slaughter last week (w/e 1/2/16) was 439,000 head for the shortened week (-3.5%), and January projections peg weekly slaughter levels near 550,000 head, near year-ago levels. Small volumes of live cash cattle traded last week at $135, over $10 higher. Bolstered by this significant upward move (fueled by the Christmas weekend winter storm that covered most of cattle country, which hampered cattle movement and feeding conditions), producers will be pushing for even higher money moving forward into the spring. The December Cattle on Feed report was released Friday 12/18/15 and was bullish, at least for the first six months of 2016. The report indicated November placements were down 11%. Additionally, July-November placements, which will supply the bulk of fed cattle marketings through the winter and early spring were record

small, down 5% or 460,000+ head. That equates to canceling an entire week of fed cattle slaughter sometime between now and April. October beef exports were down 14%. Current projections call for a 13% annual decline. The value of 50’s beef tracked well below recent historical trends throughout the month of December; however, the market jumped an impressive $15 right ahead of the New Year’s Day holiday weekend. While the abrupt rise in cash cattle likely contributed, demand for ground beef after the holidays is typically very good as consumers look for alternatives to the traditional holiday fare. By early January, ground beef is generally back front and center as a main feature item in grocery stores and 2016 is likely no exception. Industry experts expect higher price levels in January, likely averaging north of $50 as packers dial back kill levels amid a projected seasonal increase in demand for grinds. Falling cattle weights will also help deplete any excess supply of available fat trimmings. Lean boneless beef values fell to their lowest level in over two years, below $200 in December, likely establishing a bottom. Prices are projected to rise $10-$20 by late January as cow slaughter moves seasonally lower and ground beef demand gets a nice bump after the holidays. A heavier flow of imported meat from Australia should resume in January, as import quotas are reset for 2016, but nowhere near the volume of last year. HOGS AND PORK Hog carcass weights averaged 210 pounds (-2# vs 2014) for the week ending December 19th, and weights could rise slightly in January to 212 pounds on average for the month. Hog slaughter last week (w/e 1/2/16) was 2.027 million head (+1.6%), and January slaughters are projected near the 2.3 million head mark (+3%). National base hog prices have firmed as of late, closing near $50 this week. Packer margins are projected to remain strong, while producer margins should gradually improve as hog prices increase and feed costs remain fairly stable. PEDv remains a wild card as the weather turns colder. While improved knowledge of the disease, better biosecurity measures, tighter farm management and vaccines that help boost immunity all aim to prevent another outbreak, any news of a new PEDv strain would certainly boost both hog and pork price projections for 2016. October pork exports were up 7%. Current projections call for a 2% annual increase. The pork trimmings market was stuck in neutral in December as seasonal factors kept taking a predictable toll. With three of the six largest slaughter weeks ever recorded taking place just in the past month, trimmings values remained trapped under the HUGE pressure of plentiful and heavy hogs. Adding to those burdensome production figures, a record level of frozen pork was recorded in cold storage, with the highest November inventory of all time, based on a data series that goes back 100 years (1915)! Market experts are predicting a price recovery for both 72’s and 42’s in January. Over the past four years a seasonally higher trend has emerged after the New Year and this year should make it five. In the eyes of many, pork trimmings are undervalued and each benchmark item could tack on $10+ in short order by February. Hog supplies will decline marginally as demand for pork trim increases this spring. Any unexpected drop in hog weights or weather related plant closures would generate further upside risk to the 2016 forecast.

01/08/2016

Dairy Market Summary

BLOCK: Unchanged @ $ 1.4600 0 Sales

BARRELS: Up .0450 @ $ 1.5400 2 Sales

BUTTER: Up .0025 @ $ 2.0350 5 Sales

NFDM Grade A: Down .0100 @ $ .7325 8 Sales

Date Blocks Block Change Sales Barrels Barrel Change Barrel Sales Spread

01/04/2016 1.5125 Up .0050 1 1.5200 Down .0100 0 -0.0075

01/05/2016 1.4900 Down .0225 1 1.4800 Down .0400 5 0.0100

01/06/2016 1.4700 Down .0200 0 1.4800 Unchanged 0 -0.0100

01/07/2016 1.4600 Down .0100 0 1.4950 Up .0150 2 -0.0350

01/08/2016 1.4600 Unchanged 0 1.5400 Up .0450 2 -0.0800

Average Market: 1.4785 2 1.5030 9

Date Butter Butter Change Butter Sales Grd A Grd A Change Grd A Sales

01/04/2016 2.0400 Down .0400 10 0.7575 Up .0025 1

01/05/2016 2.0400 Unchanged 1 0.7450 Down .0125 3

01/06/2016 2.0375 Down .0025 0 0.7425 Down .0025 1

01/07/2016 2.0325 Down .0050 4 0.7425 Unchanged 0

01/08/2016 2.0350 Up .0025 5 0.7325 Down .0100 8

Average Market: 2.0370 20 0.7440 13

--Year Ago--

Date Blocks Barrels Butter NFDM Grade A

01/06/2015 1.5700 1.5400 1.5400 1.0000

01/07/2015 1.5700 1.5450 1.5400 1.0000

01/08/2015 1.5800 1.5450 1.5400 1.0000

01/09/2015 1.5900 1.5450 1.5400 0.9875

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