Commodity (and Playoff) Surprises

The NBA and NHL playoffs have been full of surprises with number one seeds dropping like Mike Tyson from a Buster Douglas left cross (talk about surprises, eh?). There have been surprises in commodities as of late too with beef tenders last week trading near $18 per pound, beef 50's trading just north of $2, chicken tenders surging like Seattle Kraken fans and table egg prices declining Tom Petty style (Free Fallin').

So lets start with the good surprise. The USDA composite large table egg market last week fell to just under $1.50 per dozen. To put this into perspective, and you know this guy loves to do so, the large table egg market has fallen 56 percent since peaking for the Easter Holiday at the end of March and has declined to 15 (think Nikola Jokic...the dude is a beast) month lows. However as the chart shows below, the monthly average for April was still historically high. Further, the number of table egg laying hens remains historically small.

In other words, the downside may be somewhat limited in the table egg markets from here. But, no doubt, the high table egg prices over the last year plus have curbed consumption. The inverse appears to be true with chicken tenders with prices climbing nearly 70 percent since falling to two-year plus lows during the late fall. Interestingly, chicken breast and wings don't seem to be following suit. It does appear, however, that producers are starting to pull back on production plans as noted in the chart below. Thus, the risk in the chicken markets may remain to the upside.

Datum FS has forecasts for over 50 commodities comprising various beef, dairy, grains, pork and chicken markets. If you would like to learn more about a complimentary trial to the forecasts and commentary or about Datum FS services direct message me. Thanks for reading.