Beef Exports Un-phased by High U. S. Dollar Posted on 12/23/2014 by The Beef By Cassie Fish, CassandraFish The U.S. Dollar has been on a mission since April of this year and as of this morning is the highest it’s been since 2005. Many market commentators have expressed worry that such strength would begin to chip away at agricultural exports. Beef exports did lose some steam this fall but have come back strong of late. 2014-12-23_Chart1 Yesterday’s USDA Comprehensive Boxed Beef report showed beef exports exceeding not only a year ago but the 5 year average for the last 3 weeks, contributing to more total BOW_COMMERCIAL_PROTEIN_150x203_v2boxed beef loads sold the last 2 weeks than a year ago, relatively impressive considering slaughter levels for those 2 weeks was 42k and 65k short of year ago levels. Conclusion being that boxed beef inventories were perhaps not as “backed up” as the commentary implied and giving ballast to ideas values will rally for the next few weeks. Weak and Strong Links Besides the normal seasonal correction in the rib, the two trouble areas of the carcass are beef 50s and the loin primal. With carcass weights record large, each carcass is producing a significant amount more fat trim which is pressuring those values. In fact, the spread between beef 50s and beef 90s, 2 primary components of ground beef, is record wide, surpassing the spread saw during the “pink slime” fiasco. On the lean end of the spectrum, limited supply of domestic 90s has kept those values solid in spite of the large quantities of imported lean reaching the U.S. weekly for months. Last week saw the USDA select fed carcass price go to discount to the cutter cow cutout which occurred in September but isn’t a common occurrence. Some select cuts are still finding their way to the grinder. Futures Weaker as Cash Trade Awaits CME cattle futures are taking a breather today in limited holiday trade. Out in the real world, packer inquiry is limited and asking prices are higher. Winter has returned to many areas overnight with snow, sleet and freezing rain reported, muddy feedlot conditions up north and much colder air forecast immediately after Christmas. Cattle performance is being impacted in some places. Packer have let their inventories dwindle as was evidenced in yesterday’s USDA negotiated volume report, which shows 8 or the last 9 weeks at record lows. We may be in the midst of the holidays, but this week’s cash cattle trade may happen on Christmas Eve or even wait until Friday, with the cattle feeder having regained some bargaining position. The Beef is published by Consolidated Beef Producers…for more info click here. Disclaimer: The Beef, CBP nor Cassie Fish shall not be liable for decisions or actions taken based on the data/information/opinions.
Posted on: Tue, 23 Dec 2014 18:01:05 +0000
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