Transition Period Widens Fed Cattle Price Range24 June 2013
BRAZIL- Distinct prices have been registered in the Brazilian fed cattle market because of differences of animals traded, according to analysts at Cepea, the research centre linked to Sao Paulo University.
The transition period between the supply of animals raised in pastures and those from feedlots has heightened differences among batches – with regard to volume and animal characteristics.
The demand from buyers, in turn, is also distinct, according to the urgency to fill delivery windows and the need to satisfy specific markets.
Since 11June, the price difference between minimum and maximum values considered in the ESALQ/BM&FBovespa Index has reached 4.00 reais per arroba (15 kilos) – in early June, it was at 3.00 reais per arroba.
In general terms, in mid-June, the slaughter-ready animal supply was below the demand, but the industry was unwilling to increase prices, claiming that the wholesale market of beef weakened due to the beginning of the second fortnight of June.
Moreover, trades at lower prices have been closed because of characteristics of animals, limiting increases of daily prices. In São Paulo State, the ESALQ/BM&FBovespa Index for fed cattle upped 0.37 per cent in the accumulated of June, closing at 98.64 reais or 46.01 dollars on June 14.
In the swine sector, hog and pork quotes resumed decreasing in almost all regions surveyed by Cepea in mid-June. However, in the partial of the month the upward prevails in many areas. In regard of main inputs used in the swine production, soybean meal quotes have increased sharply, while corn prices are downing. In this scenario, in the partial of June, the purchase power of producers has decreased compared to soybean meal. In Chapecó (Santa Catarina State), where hog prices are also dropping, there are decreases compared to corn; in Campinas (São Paulo State), the ratio between purchased corn with hog sales has increased in relation to late May.
Recent hog price drops were attributed basically to the weak demand for pork. Moreover, agents from the Southeastern region report that the competition with the pork from the South Brazil has increased.
As for the poultry market, chicken quotes registered an increase for the first time this year in almost all regions surveyed by Cepea in mid-June. According to players surveyed by Cepea, the animal supply, which was previously pressing down quotes, was more limited. Some producers say that the demand also favored price rises. As for frozen broiler, quotes have also upped in almost all areas. On the other hand, chilled broiler prices keep the downward trend.
TheMeatSite News Desk