Light trading on US imported beef market

In their weekly update for MLA, the Steiner Consulting Group report that prices for imported beef in the US market were fairly mixed this week. Prices for 90CL imported beef edged lower, although on very light trading. Volumes from New Zealand are particularly limited, as production approaches the tail-end of the 2015-16 season (October-to-September), and cattle slaughter in Australia continues to decline.

The imported 90CL beef indicator eased 1US¢ on last week’s levels, to 198.5US¢/lb CIF (down 0.2A¢, to 574.5A¢/kg CIF).

The report indicates that US end users continue to remain short bought, given the lower October US fed cattle futures and the subsequent anticipated decline in lean grinding beef prices during the US autumn.

From a supply point of view, US feedlot inventories are currently slightly above where they were the same time last year, although the number of cattle that have been on feed for more than 120 days is lower than year-ago levels. The Steiner Consulting Group highlight that the large degree of uncertainty around beef demand during the US autumn and winter, particularly given the forecast record pork supplies, is impacting the cattle futures market at present.

One possible implication of lower fed cattle prices in the US for Australian beef is downward pressure on grinding beef prices, which may have an effect on the flow of imported beef into the market.