Mixed trading conditions for US imported beef
14 May 2018
US imported beef prices edged lower following a mixed week of trading between overseas packers and US end users.
The imported 90CL beef indicator moved US1.5c lower, to US200¢/lb CIF (down AUD2.8¢ at AUD587.2¢/kg CIF).
Spot prices for fed beef cuts and grinding beef remain very firm despite futures prices showing a significant discount in the coming months. As a result, US end users appear content to stay short bought given the prospect of lower prices – holding back the trade for imported product. However, if market participants have overlooked the strength of US demand, competition for short-term supplies would grow.
The seasonal high for New Zealand slaughter is fast approaching, averaging 22% higher than year-ago levels during the last six weeks. Although, supplies from New Zealand have tracked well above last year, strong competition from China may limit the amount of product shipped to the US market.
Market highlights for the week ending 11th May:
- USDA revised lower its beef production forecasts for 2018, from 5.5% presented in April to 3.9%. Its first production forecast for 2019 indicates a rather modest 1.8% increase.
- Australian exports of manufacturing beef to the US have increased in the last four months but increased competition from other markets has limited the rate of increase.
- US retail beef feature activity has increased significantly in recent weeks, matching the very strong levels we saw last year. Feature activity for the last reported week was up 15% higher than a year ago.
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