In this weekly Commodities Watch column, John T. Barone, president and commodities analyst for Market Vision Inc., offers a snapshot of the state of commodities for restaurants.
The last four months of 2013 are setting up very favorably for poultry and hog producers as the USDA projects output to rise in the fourth quarter.
Corn futures have averaged $6.75 per bushel so far this year. The September corn futures contract closed at $4.92 on Friday, 27 percent below the year-to-date average. December’s corn contract was 29 percent lower that the year-to-date average at $4.76.
A similar situation exists for soy meal, where futures have averaged $434 per ton so far this year. The October soy meal futures contract closed at $404 on Friday, 7 percent below the year-to-date average, and December’s soy meal contract was $373, 14 percent below the year-to-date average.
The combination of lower input costs and high broiler and hog prices should be a very motivating factor for producers. So far, the USDA is projecting poultry output to rise 3.3 percent in the fourth quarter compared to a year ago and pork production to be 2.9-percent higher than in the fourth quarter of 2012. Look for those numbers to be adjusted higher, as long as we get some rain in August.
Contact John T. Barone at [email protected].