US Perspective—18.10.11
18/10/2011
www.themaxfieldreport.com
Sentiment in the big packer trade is that all packers participated in trading at lower levels late last week in order to move volume. Sources are not clear if packers were able to liquidate their slaughter last week; however, we tend to suspect there is a good chance we could see a healthy sales numbers later this week in the USDA Export Report.
In the meantime, there are continued reports of some packers desperately pushing wet-blue sales to tanners at levels that would be a discount on wet-salted prices. Meanwhile, packers are expected to get a little bit of a break this week in lower slaughter levels, as packers’ margins are running deep in the red and last week’s 650,000 head slaughter is the lowest in four months, barring holiday weeks.
US beef exports during August were up 30.2% compared to 12 months earlier, while exports equalled 11% of production. Through August, beef exports are up 27.3% compared to a year earlier with Canada, South Korea and Japan accounting for 68% of the year’s increased exports. All major overseas buyers are up for the year, except for Vietnam and Taiwan, and exports are on pace to break the 2003 record.
Meanwhile, US beef imports were down 9.4% in August, while August imports equalled 7.9% of US beef production. For the record, for the first eight months of the year, beef imports are down 15.7% and are on pace to be the lowest since 1996. In the meantime, through August cattle, imports from Canada are down 40%, but cattle imports from Mexico are up nearly 30%.
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