Wide trading range on US imported beef market
24 November 2016
There is a wide trading range on the US imported beef market at present, due to very tight spot supplies, with some participants opting for short positions while others are concerned about reduced availability continuing into January.
In the weekly update commissioned by MLA, the Steiner Consulting Group reports that imported beef prices are to remain generally very firm through December, before moving notably lower in January.
The report suggests the discounted prices in January are because of increased seasonal offerings from New Zealand and the expectation for more supplies to become available from Central and South America.
The Steiner Consulting Group reports that the imported 90CL beef indicator eased 3.5US¢ from week-ago levels, to 192.5US¢/lb CIF (down 3.3A¢, to 575.8A¢/kg CIF).
The strengthening of the US dollar in the last two weeks has also contributed to moderating imported beef prices. Since the start of November the Australian dollar has moved over 3US¢ lower, currently trading at 74US¢.
End users are reportedly remaining short bought, which has been the case for most of the year, and are increasingly focused on domestic beef – in part because supplies are plentiful but also because demand for round cuts is particularly weak for this time of year. Competing proteins (pork and chicken) combined with mild autumn weather have negatively impacted demand for rounds.
Despite the decline in beef imports, boneless beef cold storage inventories in the US increased in October – the result of increasing US cattle slaughter. Boneless beef cold stores for October were 3.4% higher than the previous month, and 4.9% than the same time last year.
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