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CWG market was well sold for Oct / Nov

Posted on Oct 18, 2017 in Animal Fats & Oils

Four cars of packer BFT traded at $0.2600 Chicago this afternoon with an additional four offered and unsold at that price. Tech tallow was offered at $0.3200 Chicago and unsold as of press time.

CWG trading was reported steady in trucks out of the Mo. River market, $0.2400 – 0.2500 with light volume reported as low as $0.2350 and as high as $0.2550. There was a bid for Chicago CWG at $0.2500, but no sales were reported as of press time. Sources indicated that the nearby CWG market, particularly the rail market, was well sold for Oct/Nov.

Yellow grease trading was lower out of the Illinois market, bottoming out at $0.2350. Carolinas action was lower as well, $0.2650 – 0.2700. Poultry fat action was steady out of the Mid South, but reported lower into the Carolinas and Delmarva markets. Given the weaker tone to the market, sellers seem to be discounting material in order to keep it moving.

Please contact Ryan Standard at 563.223.9021 or ryan@thejacobsen.com with any questions, comments or trading.

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Ethanol Production Was Off 1.23% Compared To The Week Prior

Posted on Sep 14, 2017 in Animal Fats & Oils

Trading in the tallow market was very quiet today with no action reported. CWG trading was steady, $0.2800 – 0.2875. Sources reported that truck interest is very strong and while there is Chicago rail interest at $0.3150, buyers can’t find an offer.

Yellow grease trading was up a ½ cent of the NY market, $0.2750. KS/TX trading was up a ½ cent from the previous low, $0.2750 – 0.2850.

Ethanol production was off 1.23% compared to the week prior with the EIA pegging output at 1.047 mil bbl/day for the week ending 9/8. RFS eligible output is estimated at 6.792 mil lbs/day for the week, off the same percentage as ethanol. Sources have suggested that production will start to slow as plants take down time in late September and October. Trading today was consistent with yesterday’s action with values reported $0.2950 – 0.3000 FOB Mo. River and Illinois action reported $0.3000 – 0.3050 for Oct and Nov. Manly trading was done at $0.3100 delivered. Biodiesel appears to be gearing up for a hard run through the end of the year with a big gap in demand created from the Argentine duties, both the US imposition and the EU relaxation of.

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Please contact Ryan Standard at 563.223.9021 or ryan@thejacobsen.com with any questions, comments or trading.

Broiler-Type Eggs Set in the United States Up 4 Percent

Hatcheries in the United States weekly program set 218 million eggs in incubators during the week ending September 9, 2017, up 4 percent from a year ago. Hatcheries in the 19 State weekly program set 209 million eggs in incubators during the week ending September 9, 2017, up 4 percent from the year earlier. Average hatchability for chicks hatched during the week in the United States was 83 percent. Average hatchability is calculated by dividing chicks hatched during the week by eggs set three weeks earlier.

Broiler-Type Chicks Placed in the United States Up 3 Percent

Broiler growers in the United States weekly program placed 182 million chicks for meat production during the week ending September 9, 2017, up 3 percent from a year ago. Broiler growers in the 19 State weekly program placed 174 million chicks for meat production during the week ending September 9, 2017, up 2 percent from the year earlier. Cumulative placements from the week ending January 7, 2017 through September 9, 2017 for the United States were 6.53 billion. Cumulative placements were up 2 percent from the same period a year earlier.

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The BFT Quiet Despite the Countervailing Tariff News

Posted on Aug 24, 2017 in Animal Fats & Oils

The BFT remained quiet today even with the announcement that a countervailing tariff may be placed on Argentinian imports.  This would become on all imported goods effective 90 days prior publication in the Federal Register.  This means that the price of Argentinian Biofuels would increase and make the US biofuel market demand more feedstocks for biofuels.  Soybean oil rallied today by as much at .75 to nearly a cent only to settle well below the high of the day.  So far it has not affected the animal fat prices around the US, but many are wondering not only if but when it will.  So the market today is like a deer caught in headlights and is stuck waiting to see what happens next.

No changes in any of the animal fat markets today, but a lot of lip service given to the tariff on Argentine imports.

Broiler-fryer slaughter under federal inspection for 23-Aug-17 is estimated to be 33,300,000 head up 3.00 percent from a week ago and up 1.9 percent from a year ago.  (Last week 32,329,000, last year 32,669,000).

Broiler-Type Eggs Set in the United States Up 5 Percent 

Hatcheries in the United States weekly program set 226 million eggs in incubators during the week ending August 19, 2017, up 5 percent from a year ago.

Broiler-Type Chicks Placed in the United States Up 4 Percent

Broiler growers in the United States weekly program placed 184 million chicks for meat production during the week ending August 19, 2017, up 4 percent from a year ago.

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Tallow Prices Find a Toe Hold, and Stabilize After Slide

Posted on Jul 14, 2017 in Animal Fats & Oils

Trading was quiet to wrap up the week. There was a report of tech tallow offered steady with the current Chicago pricing, but as of press time there was no action reported. Other market indications from buyers and sellers were echoes of the market tone that have been present throughout the week, lower bids for CWG and YG out of bio and steady sales into feed.

Tallow Prices Find a Toe Hold, and Stabilize After Slide

Tallow prices are attempting to find a toehold, following the recent decline from the highs above 37.  With bean oil and other vegetable oils rising in the wake of the hot dry conditions in the U.S., tallow prices could stabilize.  Prices appear to be forming a bull flag pattern which is a continuation pattern where there is a pause that refreshes higher.  Support is seen near the 20-week moving average at 35. Resistance is seen near the Bollinger band high which is 2-standard deviations above the 20-week moving average at 38.  The Bollinger bands are near the wideest levels seen in 2017, and are now contracting reflecting decelerating historical volatility.

Momentum has turned positive as the MACD (moving average convergence divergence) index recently generated a crossover buy signal. This occurs when the spread (the 12-week moving average minus the 26-week moving average) crosses above the 9-week moving average of the spread. The MACD histogram is printing in the black with an upward sloping trajectory which points to higher prices.

The daily MACD is relaying a different story. Here the MACD recently generated a sell signal.  This occurs as the spread (the 12-day moving average minus the 26-day moving average) crosses below the 9-day moving average of the spread. The MACD histogram is printing in the red with a downward sloping trajectory which points to lower prices for tallow.

The relative strength index (RSI) which is a momentum oscillator that measures accelerating and decelerating momentum, has stabilized near the 60 level, and has declined from oversold territory. The current reading is on the upper end of the neutral range, but reflects consolidation.

For any comments or questions in regards to Tallow Prices Find a Toe Hold, and Stabilize After Slide, please contact David Becker at davesbecker@gmail.com

Please contact Ryan Standard at 563.223.9021 or ryan@thejacobsen.com with any questions, comments or trading.

Broiler-fryer slaughter under federal inspection for 14-Jul-17 and 15-Jul-17 is estimated to be 33,622,000 head down 7.05 percent from a week ago and down 1.3 percent from a year ago. (Last week 36,173,000, last year 34,072,000)

Weekly broiler-fryer slaughter under federal inspection for the week ending 15-Jul-17 is estimated to be 165,955,000 head up 16.98 percent from a week ago, and up 1.84 percent from a year ago.(Last week 141,867,000, last year 162,953,000

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The market was quiet with little action reported

Posted on Jun 20, 2017 in Animal Fats & Oils

The market was quiet today with little action reported. From the sell side, light cattle weights are keeping tallow supplies tight and there have not been an reports of spot material openly offered, formulas offerings are similarly quiet. Sources reported that buyers aren’t showing much interest either due to some weakness at the CME today. DCO trading was reported out of the Illinois market in a range of $0.2825 – 0.2925 FOB this afternoon.

Weekly Review

As a whole, the market was fairly steady last week. Taking a straight average of all of the weekly averages, the change was 11/100ths of a cent higher. The commodities that saw moves greater than 1/10th of a cent were choice white grease and soybean oil.

Trucks of CWG traded as high as $0.2850 last week, narrowing the spread to the $0.3200 Chicago rail market. Sources had reported numbers into biodiesel over the $0.3000 mark and demand into the feed sector has been reported as consistent.

After a few weeks of heavy spot action, the tallow market took a breather. Sources reported formula based business for the second half of July, but stopped short of quantifying “good” and “strong” volume. The BFT market appears to be well sold for most of July.

Buyers in the biodiesel sector have reported a shift towards more veg oils. BFT prices have jumped 18.6% since the week ending April 7, while bean oil values have risen 2.7%, bouncing around in a range of mid $0.31’s to mid $0.32’s. Sources have reported bean oil delivered into Midwestern plants in the neighborhood of $0.3300, which is a much better value than nearly all grades of tallow as well as choice white.

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Please contact Ryan Standard at 563.223.9021 or ryan@thejacobsen.com with any questions, comments or trading.

Today Last Week Last Year WTD
Broiler Slaughter 33,529,000 32,701,000 31,822,000 33,529,000
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Yellow Grease Grinds Higher as Momentum Continues to Surge

Posted on May 15, 2017 in Animal Fats & Oils

Yellow Grease Grinds Higher as Momentum Continues to Surge

Yellow grease prices remained stable and continue to grind higher having increased by more than 11% in 2017.  Prices are bumping up against resistance near the Bollinger band high which is 2-standard deviations above the 20-week moving average at 25.  Support is seen near the 20-week moving average at 23.75.  Prices have benefited from strong demand for vegetable oil which has kept prices of animal fats buoyed.  The slow increase in the Bollinger band width reflects rising historical volatility.

The weekly relative strength index (RSI) continued to climb higher this past week which reflects accelerating positive momentum.  The RSI is a momentum oscillator that measures accelerating and decelerating momentum, along with overbought and oversold conditions.  The current reading on the weekly RSI is 77, which is well above the overbought trigger level of 70, which could foreshadow a correction in prices.  Despite this relatively high level, the RSI climbed as high as 91, when yellow grease prices surged in April of 2016, which means that momentum can continue to drive prices higher.

Momentum as reflected by the weekly MACD (moving average convergence divergence) index is positive. The MACD is also a momentum indicator that measures momentum by evaluating the difference between two exponential moving averages.  As this differential accelerates it can generate a crossover signal, which occurred in January of 2017. The index is printing in the black, and the MACD histogram has a positive trajectory which points to higher prices for yellow grease.

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