The Demand for slaughter cattle sustains price stability in Uruguay, with expectations of greater dynamism for after Easter. The rapeseed area will be reduced by 30% this year in Uruguay after the record of 350 thousand hectares in 2022 and grains in Chicago were down a notch after the previous week’s gains. And at the end of another week of activity in the markets of three of the main items that Uruguay exports, in the wool the bearish tone persists.
firmness in cattle
In a scenario of minimal supply of special livestock and little operation for Easter, the local livestock market remains firm.
The special steer closes the week at US$4.15 to US$4.20 per kilo on the fourth scale. There is greater interest in fat cow and that is reflected in gains of a few cents for that category in recent days. The complete fat cow is around US$4 per kilo and the good fat cow is around US$3.90 per kilo.
With more general than special cattle on offer, the value gap between one and the other is narrowing, said Pablo Sánchez, a member of the Walter Hugo Abelenda Desk and director of the Association of Livestock Shippers (ACG).
Values of cattle well finished.
Industrial operations were reduced last week: 39,682 cattle. There are plants that are not slaughtering or working only for supply, such as Frigorífico Las Piedras and San Jacinto.
The volume of cattle slaughtered in March crossed 200,000 head for the second consecutive month, something that had not occurred since May/June 2022.
The participation of females corresponded to the highest interest registered in the market and in March it reached its highest volume slaughtered in the last nine months.
The supply of well-finished cattle is low and is expected to remain restricted in the short term., despite the fact that the forage panorama of the fields is changing. “Volume of food will be seen within 20 days, or a month,” Sánchez estimated.
“In the short term we are not going to have an abundance of cattle”, he remarked, with a firm outlook forward. The drought still hits the waterways, which in many places have not been able to recover.
The accumulated work
In the replacement, there is a lot of demand, mainly in what are short businesses. The large cattle have mostly gone to corrals, both cow and steer, the operator said. And those who sowed early oats and got a boost from the last rains are also taking advantage.
“Yes, the pregnant cattle are locked up,” he said, hinting at his caution in the face of a challenging winter ahead.
The live export operation maintains a price floor for calves, which is in high demand, with business for whole calves of up to US$ 2.50 per kilo.
For the sheep, the demand is sustained, with values that continue to rise, about five cents above last Monday’s ACG benchmark, which averaged $3.40 for heavy lamb, $3.11 for capons and $3.03 for ewes. The heavy casing has placement, although with a price differential.
“Today everything is sold, everything is marketed,” said the operator. Entries are short, around a week.
For the second week in a row, sheep slaughter fell to 34,075 head, even so, maintaining high levels for the season. The closing of March showed an interannual increase of 82% in the slaughter of sheep. And so far this year the volume registered at the same time last year with 433,865 heads has been exceeded by almost 100,000 animals.
Climate market looks north
In the grain market, the role of climate is shifting from South America to North America. This week the rise for soybeans moderated, pressured by an abundant Brazilian supply, after the United States Department of Agriculture (USDA) marked lower-than-expected stocks last Friday and maintained the soybean area.
The July soybean position fell to US$ 537.4 per ton, a decline of 0.9% in the week.
Brazil is coming to China with very competitive values and this is detrimental to US exports. The northern country this year will surpass Argentina in soybean meal exports which, according to the latest estimates from the Rosario Stock Exchange, could fall to 20.9 million tons, the lowest volume since 2003.
Another bearish factor was the official announcement this Wednesday of a new edition of the soybean dollar in Argentina, which will give rhythm to sales by producers.
The “Export Increase Program” will apply to soybeans from the 8th of this month to May 31, with a differential exchange rate of AR$ 300 per dollar. In Argentina, estimates are made that during this third edition of the soybean dollar, the volume traded could reach up to 10 million tons, between grain from the past harvest and new.
Soybean price down.
The corn market adjusted slightly downwards, with better climatic prospects before planting. In Chicago, the July position closed at US$ 244 per ton, with a weekly drop of 2.6%. In Brazil, the conditions of second-rate corn crops (safrinha) are good.
The week also closed with falls for wheat in Chicagobefore the long weekend. The December position remained at US$ 264.4 per ton and accumulated a 2% drop in the week.
The oil market continues to be under great pressure, with falling values for rapeseed. Depending on how Argentine soy milling evolves, there may be a lack of oil stock going forward.
At the local level, The first estimates of winter crops cut the rapeseed area by almost 30%: from 350,000 in 2022 to about 250,000. The remaining 100,000 hectares would go to wheat and feed barley, said Juan Foderé, director of Fadisol.
Maltería Uruguay launched its commercial plan at the end of last week, with a 100% fixing of the Chicago wheat December contract and a bonus of US$10 per ton for European varieties. Maltería Oriental had launched its plan at the end of March, with the possibility of setting early sales at 100% of the Chicago wheat December contract, until November 17, including a distributor fee.
For this year, a growth of the barley area is projected in the order of 40,000 hectares compared to last year.
Wool market with bearish tone
Businesses in the local wool market are sporadic and are concentrated in fine wools, with some operations for crosses and Corriedale wools in the axis of US$ 1 per dirty base kilo for the range of 26 to 28 microns.
The international prices remain 15% below last year’s prices. The lower activity is reflected in foreign trade data.
The export of wool and fabrics fell 7% in dollars in March and in the first quarter shows a drop of 12% compared to the same period in 2022, according to the March report of the Uruguay XXI institute. It dropped from US$43 million to US$38 million for the January/March period.
In the Australian market this week the Eastern Markets Indicator (IME) fell 18 cents in local currencyclosing at AU 1,300 on the last trading day before the Easter break next week.
The fall in US currency was less, due to the slight strengthening registered by the Australian dollar. It ended at US$ 8.78 and lost three cents compared to the previous week. The setback in values reached all categories with the exception of the extremes; the superfine wools of less than 17.5 microns and the thick ones of 30 microns showed upward arrows.
Wool, a market that does not bounce.
The bearish tone of the operations led to 12% of the initially planned offer being withdrawn and 13.7% of the 46,250 registered bales remaining unsold.
LThe auctions resume sales on Tuesday, April 18 with a considerable offer of 54 thousand bales, consistent with the large stock of the current harvest and the expectations that the demand from China will continue to be affirmed.
