Fat cattle prices go down a slide. In one month the value of the steer lost around US$ 0.50, in a scenario of uncertainty. Beans in Chicago reached price peaks for the last four months, but closed the week lower. Wool does not find a floor and is at the lowest levels since October 2020.
A combo sets the pace
The combo of minimum supply of well-finished cattle and weak external signs set the pace of the market. The demand remains cautious from the industry while export businesses are not activated, waiting especially for China.
A month ago the fat steer was trading at around US$ 4.10 per kilo on the fourth scale. At the close of this week, the price proposal for the fat steer is in a range between US$3.50 and US$3.60, a drop of around 10 to 20 cents compared to Monday. For the cow, they offer between US$3.25 and US$3.30 per kilo, and around US$3.60 for the heifer. There are industries scoring without spending a price and tickets are around a week.
With this scenario, few deals are made. Producers resist selling in low. The lack of rain is slowing down the growth of the verdeos and the aguadas continue to have problems.
On the demand side, there are industries that are not operating or have reduced activity. Even, some plant in the south of the country is being affected by the water deficit, advancing licenses for this reason.
Despite this, last week’s work increased and cut a streak of four consecutive weeks of loss. It was 42,017 cattle, 12% less than in the same week of 2022 and 15% less compared to the same week of 2021.
China remains very quiet in demand and prices. From Brazil, players in the meat sector see that a price floor may have been reached in the Asian giant. “The trend is to increase volumes and prices,” Paulo Mustefaga, president of the Brazilian Association of Refrigerators (Abrafrigo), said this week.
For now, in Uruguay last week the logic of an export price of sheep meat higher than that of beef returned.
In the case of beef, it was for the second consecutive week below US$4,500, with an average of US$4,324, according to provisional data from the National Meat Institute (INAC). A correction that leaves it far from the average of the last 30 moving days, of US$ 4,574.
The surprise was given by the export price of sheep meat, with a jump of almost US$ 800 in seven days. It averaged US$4,502, lightly exceeding the US$3,861 of the last 30 moving days.
The adjustment in fat cattle has not been reflected in the replacement market. The firmness in the virtual auctions was surprising despite the strong adjustment of the fat man. In Plaza Rural, calves averaged US$2.53. In Lot 21 they averaged US$2.46. In both cases above the previous shot.
In rural businesses, “I notice buyers are much more cautious,” said Alejandro Zugarramurdi, from the Alejandro Zugarramurdi Rural Business desk.
In lanares the offer is limited and, with a greater demand, the tickets are shortened. Values are around US$2.90 for lamb, and around US$2.40 for ewes and capons.
The low supply is being seen in the volume of activity, which last week had its second lowest slaughter of the year with 15,619 sheep.
Volatile week for grains
The grain market closed the week lower, after reaching a four-month price peak on Wednesday and generating sales opportunities for local producers.
In the last two days it fell due to the influence of the rains that relieved the key crop regions in the United States and the improvement of the forecasts for the next two weeks, as well as the bearish influence of the monetary policy of the United States.
With strong dependence on the American climate July soybean position closed in Chicago at US$ 549 per ton, losing US$ 7 compared to Wednesday 21 but still US$ 11 above last Friday.
The soybeans of the next harvest fell from the peak of US$ 494 on Wednesday – the highest since the beginning of March – to US$ 481 this Friday.
Closing in the markets
Prices also adjusted due to profit-taking by investment funds, although the percentage of area under water stress grew again this week: for soybeans from 51% to 57% of the area and from 57% to 64% for corn .
Another factor influencing the market is the logic of maintaining the rate hike that the US Federal Reserve (FED) intends to follow, which has had a downward impact on the price of oil and the stock markets.
In Uruguay, the prices of the 2023 and 2024 harvests were matched, with US$440 per ton for available soybeans and US$436 for the next harvest.
The December position wheat closed at US$269 in Chicago, a daily low of US$2, although it gained 6.5% from the closing of US$252 the previous week. In Europe, wheat also corrected downwards as a result of the march of the winter harvest and the export strength that Russia maintains.
Closing in the markets
The price of corn fell sharply and closed the week at US$248 after having reached US$264and that of the next crop fell from US$ 248 to US$ 234. Rains on Friday and forecasts of more rain for the weekend in the US corn belt put pressure on the oilseed.
In Uruguay, corn corrected downwards and stood at US$ 260 a ton due to the entry of imported corn from Argentina and Paraguay. In Brazil, corn is trading at US$ 199 in full harvest of a record safrinha that allows Brazil to make monthly exports of 30% above the previous campaign.
The reference for rapeseed is US$ 429 a ton.
Wool in a 32-month flat
The fall in the price of wool in the Australian market seems to have no floor. This week it reached its lowest values since October 2020, when it was just beginning to rise after the initial impact of the Covid 19 pandemic. The Eastern Markets Indicator (EMI) closed at US$ 7.74 and in both dollars and Australian currency it lost 3% compared to last week due to demand weakened by global economic uncertainty.
Closing in the markets
China’s willingness to encourage the use of its currency, the yuan, in international business is reaching the wool market. It was discussed at the recent meeting of the China Wool Industry Association (CWIA) and it was even considered using, to a lesser extent, the Australian dollar. In Australia, it is estimated that this could contribute to a certain stability of values, mitigating the impact of exchange fluctuations.
Although the weekly supply of bales was the lowest in 9 months, the downward streak extended with more noticeable falls in the finer Merino wool end, less than 19 microns. 25% of the bales remained unsold, a relevant percentage, since many sellers do not validate the prices.
One week from the end of the 2022/23 commercial harvest and three weeks from the summer recess in Australia, the supply next Tuesday and Wednesday will be much higher.
In Uruguay, the market had more activity according to the report of the Uruguayan Wool Secretariat (SUL), which reported several operations. For Merino wool in the axis of 20 microns, small volume deals were made with prices from US$ 5.10 to US$ 6 per kilo fleece.
For Ideal wools around 23 microns, sales were made for US$ 3.50 per kilo and a Corriedale lot of 20,000 kilos of 28 micron wool, green grifa and with high washing performance quoted US$ 0.95 per kilo fleece .
