US imported beef market quiet on thin trading
08 December 2016
The imported US beef market has remained quiet this week, off the back on thin trading and wide gaps between asking and offering prices.
End users are reportedly reluctant to put on significant positions for product moving into the New Year, and remain focused on holiday business.
In their weekly report commissioned by MLA, the Steiner Consulting Group reports that the imported 90CL beef indicator eased 1.5US¢ from week-ago levels, to 190.5US¢/lb CIF (down 5.8A¢, to 562.37A¢/kg CIF).
Part of the reason for a wide trading range is the increase in cattle slaughter in Australia and New Zealand, which is expected to boost supplies in the short term. More cattle became available for slaughter in Australia during November as a result of much drier conditions, a 21,600 head increase from September levels, albeit back 11% from the same period last year.
Global dairy prices have recovered notably in the last six months, reducing the number of dairy animals going to slaughter in both New Zealand and the US. There is uncertainty as to which way prices will trend over the coming months, as the supply of cattle is largely dependent on seasonal conditions and dairy demand in key importing countries.
The market for round cuts in particular continues to be a challenge with increased US fed beef availability and US domestic product trading 10-15¢/kg lower than imported offerings.
Steiner Consulting Group highlights the ongoing influence of the exchange rate on the US import beef market. The US dollar appreciated 3% against the Australian dollar over the last month, which has benefited Australian producers and exporters – increasing their returns in the US market.
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