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Poultry fat prices moved lower into the Eastern market today as did yellow grease. Stronger production and at times, localized increases in raw material output, are creating pockets of heavy supply. The majority of volume has traded in today’s printed range, but buyers willing and able to take smaller volumes of fat a moment’s notice have bought yellow grease and poultry fat at prices below $0.2000 FOB. The small volume, quick shipment stories are widespread across the market creating the opportunity for those with long positions to fill short positions at a discount.
The fundamentals suggest that the fat market is nearing a bottom with values well priced relative to corn and soybean oil. Additionally, the short week next week ahead of the Independence Day holiday should help to tighten up the supply side of the market.