Commodity forecasting highlights from CommodityONE
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Poultry
Chicken production stayed managed last week, and supply trends point to continued restraint this month. Young bird slaughter declined 2% week over week and was 2% below last year. For the week ending September 26, output rose nearly 4% from the prior week but was 1.4% lower than a year ago, leaving 2026 year-to-date weekly production only 1.4% ahead of last year. Monthly production numbers have outpaced the USDA’s weekly estimates. August chicken output was up a solid 3.3% year over year, on a similar rise in slaughter. Chick placements have averaged about even with last year over the past six weeks, which suggests tempered production through at least the end of October. On the pricing side, many chicken markets still moved lower, including breasts, wings, and leg quarters. Table egg markets firmed slightly.
Outlook: Nearly everyone expects chicken output growth to stay tempered this fall, and the USDA’s current Q4 forecast calls for a 2.3% increase over 2025. Breasts and tenders still tend to fall in October. Tenders have been lower in October than in September in 10 of the last 11 years.
Beef production rebounded 13.2% last week after operational disruptions cut into the previous week’s slaughter, but it was still 2.8% below the same week a year ago. Cattle imports from Mexico picked up late in the week to an estimated 7,000-plus head, the most in well over a year. Boxed beef values were mixed. They firmed early as slaughter tried to recover, then slipped as the week wore on. USDA Choice and Select cutouts both finished up less than 1%. Ribs and Select briskets were the strongest gainers, while flanks remained soft and are down more than 7% over the last four weeks. Beef 90 trim declined, and the rest of the trim markets moved higher. The Mexican imports are encouraging, but domestic cattle supplies need to improve, and pasture conditions (critical for herd development) remain historically poor. Just 19% of pasture was rated good or excellent last week, the lowest for that week in more than 30 years.
Outlook: Fall beef production is expected to run close to 3% below last year. The National Weather Service expects drought conditions in cattle country to improve over the next few months, which could set up much better herd expansion momentum as the new year gets underway.
Pork
Pork production increased 0.5% from the prior week but was 2.3% lower than 2025, and year-to-date weekly output is now 0.1% below last year. Last week’s markets were mixed, and many pork markets are trading at historically low levels. The cutout dropped 1.4%, with ribs, loins, and hams lower too. Major pork trim markets also fell, led by 42s at their lowest level since May. Seasonal history suggests trim may have further to fall, since 42 trim has averaged lower in October than in September in eight of the last nine years. Pork supplies have stayed limited this year despite heavier hog weights, and that trend looks set to continue this fall. Late last month, the USDA updated the March through May 2026 pig crop to 0.4% below the prior year, the smallest for that period since 2022. Those pigs come to slaughter this fall, and the USDA shows Q4 pork output well under 1% above 2025.
Outlook: Limited supply and already-low prices could temper seasonal downside in some pork markets over the coming weeks, including bellies. The USDA pork belly primal has averaged lower in December than in September in each of the last seven years.
Produce
Lettuce again drove the produce complex, while the rest of the big five had little to report. 24-count iceberg rose another 30% week over week and has nearly quadrupled in price since the first week of August. One more week of gains at that pace would put iceberg back around $50, which is typically where late-year rallies end, so a slowdown is possible by mid-October. This year’s rally started a few weeks earlier than normal, though, so substantial relief may not come until well into November. Tomatoes have upside into December but surprisingly eased back last week. That dip isn’t expected to last more than another week or two. 48-count Hass avocados were basically level week over week.
Outlook: Lettuce may slow by mid-October, but meaningful relief could take until well into November. Tomatoes still have upside ahead of December, and avocados will hopefully stay level through year-end.
Dairy
CME spot dairy trading was light on Friday, with only 14 loads changing hands. For the week, CME cheese blocks and butter declined, while dry whey and nonfat dry milk held firm. The nonfat dry milk weekly average climbed to a 19-week high and is now within a dime of a multi-decade high, as constrained production limits supplies. Domestic buyers are limiting purchases, but export demand remains solid. Butter demand is solid at home, though export sales are running ahead of it. Cheese markets fell to their lowest levels since 2020, pressured by strong milk and cheese production and historically large inventories. As of the end of August, U.S. cold storage cheese stocks were 2.3% higher than a year ago, the largest in three years and the fourth largest on record.
Outlook: U.S. cheese is trading at its steepest discount to the E.U. since February, which should encourage exports. Downside price risk in cheese could be nominal from here.
Grains
Grain markets were lower across the board last week. Corn and soybean meal posted the biggest losses, while soybeans and soybean oil stayed closer to even. Corn took almost all of its losses Wednesday afternoon, after the September 1 Quarterly Grain Stocks Report. Going in, the trade expected corn stocks to land close to the 1.922 billion bushel 2025/26 carryout from the September WASDE. The report instead showed almost 2.1 billion bushels on and off farms as of September 1, well above even the highest trade expectations. The 2026/27 carry-in will be adjusted to reflect the report. With export demand off to a slower start this year, that 173 million bushel increase could carry through to the 2026/27 carryout.
Outlook: December corn fell back to its nearest technical support at $5. Without new export demand following the selloff, it may struggle to hold that level this month.
Seafood
Frozen Alaskan pollock filet slipped just 2% month over month in the July data and still tracks cod closely. Like cod, pollock ended a four-month winning streak during which its average price surged nearly 33%. The decline came even with import volumes running well below normal, which hints at some demand destruction in the U.S. That will need to continue for prices to trend lower, because the pollock market usually doesn’t top out for the year until Q4. Last year was an exception, but from 2018 through 2024, pollock hit its yearly ceiling between October and December six times.
Outlook: Pollock will likely pick up seasonal support toward the end of 2026, so the best chance for a more noteworthy downward correction probably won’t come until Q1 2027.
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