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Prices moved sharply lower today on a number of products as increased production is combining with a myriad of shipping issues and creating must-sell spot loads. Renderer bleachable fancy tallow (BFT-R) and packer bleachable fancy tallow (BFT-P) were offered through the Chicago market today and unsold.
Through the first half of June choice white grease (CWG) out of the Missouri River market has been at a 1.4 cents per pound premium to yellow grease FOB Missouri River. Historically, that premium has been at its highest in June at 2.9 cents. The surge in hog slaughter coupled with relatively tight yellow grease volumes have contributed to the narrow spread, but the increase in restaurant activity and high temps are pushing more yellow grease into the market. Today’s price drop is evidence of the surge in supply. It’s reasonable to expect further weakness in the yellow grease market basis the price relative to choice white grease. Restaurant collections have begun to resume and add some trucks of YG to the market. High temps are likely to create some buying opportunities at low prices for those capable of taking off spec/high acid animal fats in the near term.