Light trading on US imported beef market
23 April 2018
US imported beef prices continued to edge lower this week, as a result of light trading volumes and the sharp discount of US fed cattle for the US summer months.
June fed cattle are priced 13% below current levels, which has seen a number of US buyers take a wait-and-see approach to the market, buying only for immediate needs. The supply of imported grinding beef remains limited in the spot market, although supplies from NZ are expected to pick up in late May and into June.
The imported 90CL beef indicator eased US1.5¢, to US197.5¢/lb CIF (back AUD6¢ at AUD560.5¢/kg CIF).
Last week, the USDA released the results of its latest cattle on feed survey, showing that the inventory (of feedlots with +1000 head) at April 1 was up 7.4% from year-ago levels. Steiner Consulting note that the larger numbers were not a surprise, which is reflected in the discounted fed cattle futures over the US summer months. Interestingly, the number of steers on feed was 4% higher but the number of heifers was 13.9% greater year-on-year. This points to a slowdown in the US cattle herd expansion, as more females are heading to slaughter, rather than being retained in the herd.
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