Australian cattle prices to fall further: Rural Bank
Further declines in cattle prices are expected because of a rise in Australian cattle supply resulting from drier weather conditions, according to Rural Banks March insights.
The Australian Bureau of Meteorology (BoM) has called the end of the La Nina weather pattern, moving to an El Nino watch, which will increase the chances of drier weather conditions. The BoM forecasted a 50pc chance of an El Nino forming later in the year, which may cause drought conditions in the eastern states of Australia. Three La Nina years in a row brought above-average rainfall, creating record-breaking crop production, filling water storages, increasing soil moisture and a significant cattle herd rebuild.
Australian cattle prices have continued to decline into 2023, with the Eastern Young Cattle Indicator (EYCI) currently sitting at 680¢/kg, down by 39pc from 1,117¢/kg during the same time last year. Lower prices are largely because of increased supply of cattle coming into the market following multiple years of a herd rebuild, according to Rural Bank. The Argus-assessed Australian northern feeder cattle price was at 374¢/kg on 16 March, down by 33pc from 564¢/kg during the same time last year. Australian processors are decreasing grid prices on grain-fed cattle to feedlots, which is driving down feeder steer prices, after unsustainable high prices over the past two years and then a steep decline in 2023, when many feedlots and processors were making major losses on cattle.
Australian weekly slaughter numbers for the last week of February and the first two weeks of March remained above 110,000 head, up by 20,000 head from the same time last year, according to Meat and Livestock Australia. Slaughter numbers are likely to continue rising as more cattle continue to arrive into the market, according to Rabo Bank.
A rise in slaughter levels helped push February beef export volumes 18pc higher on the year. Beef exports for February totalled 70,379t, up by 37pc from 51,471t in January and by 18pc from 59,513t in February 2022, according to the Department of Agriculture, Fisheries and Forestry. A further growth in beef exports to China is possible if Brazil's ban on beef exports to China remains in place.
A steady decline in feeder steer prices will persist given the prediction of continued dry weather and higher slaughter numbers as more cattle come into the market, according to Rural Bank.
Related news posts
Ameropa taps Zacharias to serve as CEO
Ameropa taps Zacharias to serve as CEO
Houston, 15 April (Argus) — Swiss agribusiness Ameropa has tapped fertilizer subsidiary head Josh Zacharias to serve as chief executive starting today. Zacharia succeeds former chief executive William Dujardin, who resigned 30 November for personal reasons after nearly four years in the role. Zacharias was promoted from chief executive of Ameropa's subsidiary Azomures, a nitrogen fertilizer producer in Romania. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Michigan organic hens culled over bird flu
Michigan organic hens culled over bird flu
Washington, 12 April (Argus) — At least 2mn head of organic egg layers have been culled by egg producer Herbruck's Poultry Ranch in Michigan because of an outbreak of Highly Pathogenic Avian Influenza (HPAI), according to market sources. The US Department of Agriculture's Animal and Plant Health Inspection Service (USDA APHIS) has detected HPAI in Michigan poultry operations in recent weeks. APHIS data indicates that 4.076mn head of poultry were culled in Ionia County, Michigan, where Herbruck's is located, during the first two weeks of April. Argus estimates that 2mn head of organic egg layers consume about 4,500 bushels of organic corn and 63 short tons of organic soybean meal per day. Herbruck's operations are not expected to return to normal until late summer or early fall, which would lead to deliveries of organic corn and soybean meal being delayed or shifted to other buyers until mature replacement egg layers can be raised. Herbruck's did not immediately respond to a request for comment. The cullings are expected to have a sizable impact on the Michigan organic corn market, as Herbruck's is among the largest users of organic corn in the region, according to market sources. Deliveries of old crop organic corn contracts are being delayed and rolled forward to the fall 2024 new crop for delivery, the source said. With the rolling forward of old crop contracts, some new crop 2024 contracts have been canceled outright, they said. According to industry contacts, organic corn deliveries being pushed from old crop to new crop has left farmers in the region concerned about having sufficient storage space for new crop corn come harvest. As a result, organic farmers in Michigan are expressing interest in taking lower bids that previously received little interest in order to clear old crop out of their bins. The rush to sell old crop organic corn could boost liquidity in the market, especially from the sell side, and apply further bearish pressure to the market as farmers compete to clear out bin space. The Argus Corn Belt delivered spot price for feed grade organic corn fell by 4¢/bushel in the week ended April 6 to $7.25/bushel. The H5N1 variant of HPAI was discovered in the first commercial poultry flock in February 2022. In March this year, HPAI was confirmed in US dairy herds , with confirmed dairy cases in seven states as of 11 April. By Alexander Schultz Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Panama Canal to restrict May transits on work
Panama Canal to restrict May transits on work
New York, 9 April (Argus) — Maintenance at the Panama Canal for the Panamax locks, responsible for around 70pc of all ship crossings at the waterway, will cut the daily number of vessel transits through these locks for nine days in mid-May, the Panama Canal Authority (ACP) said today. The ACP said it will reduce Panamax lock transits from 7 May to 14 May by three to a total of 17. The cuts entail two fewer "super" category slots for vessels like medium range (MR) tankers and Supramax bulkers and one fewer "regular" category slot for smaller vessels. An additional day of downtime "allowing 24 hours for unforeseeable maintenance delays" will put the projected end-date for maintenance and the return to 20 total Panamax lock transits on 16 May, according to the ACP, constituting a nine-day reduced-transit period that should drop total transits in the period by around 27 vessels. The potential for heightened competition amid a backlog of vessels vying to transit during this time could be mitigated by assigning "additional transits per day for each vessel category" based on the canal's "daily water consumption quota", according to the ACP. "These additional slots may be assigned to booked vessels that have already arrived at canal waters," the ACP said. "This measure is a temporary service subject to operational assessment, open to all vessel types based on the arrival date." The maintenance will primarily target the west lane of the Gatun locks, where ships enter the Panama Canal from the Atlantic basin, while the ACP noted that the east lane of the Miraflores locks on the Pacific side will undergo a simultaneous maintenance period from 11-12 May. Panamax lock transit auction prices hit low The average cost for ship operators to win an auction to transit the Panama Canal via the Panamax locks hit its lowest level Monday since Argus began the assessment in January on lower demand, particularly for dry bulkers utilizing alternative routings, and an uptick in auction slots in early March . "Since the peak period last year, auction prices have leveled off. They are generally near normal levels today," said the ACP. The rate for a Panamax lock auction dropped by $14,173 to $94,314, the lowest average price to transit since 26 January and representing a drop of $450,936 from the high hit on 5 February on a jump in demand ahead of lunar new year holidays across Asia-Pacific. Of the smaller dry bulkers that can fit in the Panamax locks, only 34 Handysize, 38 Supramax, and 31 Ultramax bulkers transited the Panama Canal in March compared with the 92 Handysize, 66 Supramax, and 88 Ultramax bulkers that transited in March 2023, the lowest number of transits in March for these segments through 2017, according to Kpler data. Dry bulk Panama Canal transits down, tanker transits stabilizing The share of dry bulkers utilizing the Panamax locks at the Panama Canal was at 15.2pc of total transits in February, down from the 25.5pc share that dry bulkers held in September 2023, according to ACP data, before the ACP instituted daily vessel restrictions and the current prebooking/auction slot system supplanted the previous, first-come, first-serve waiting system in late October 2023. Meanwhile, 149 MR tankers transited in March, down from the 169 that transited in the same period the year prior but up from the 107 MRs that crossed the canal in February. MR transits have risen every year in March, according to Kpler, as west coast South America diesel demand jumps on the resurgence of refinery utilization in the US Gulf coast after the first quarter turnaround season draws to a close. Crude, product, and chemical tanker transits rose by 1.7 percentage points to 30.3pc, making up the plurality of all Panamax lock transits collectively in February from September 2023, according to ACP data. The uptick in available Panamax lock auctions in early March has likely offset the steady demand for these vessels and contributed to the downward pressure on auction prices, while the reduced transits during the upcoming nine days of maintenance could reverse this trend in the short term. ACP expects transit restrictions to lift by 2025 In the long term, the Panama Canal expects a return to normalcy within the next two years, beginning with the start of the rainy season in the coming weeks. "Current forecasts indicate that steady rainfall will arrive in late April and continue for a few months," the ACP said today. "If this remains the case, the canal plans to gradually ease transit restrictions, allowing conditions to fully normalize by 2025." By Ross Griffith Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Brazil adds R1.4bn to farm credits in 2023-24 crop
Brazil adds R1.4bn to farm credits in 2023-24 crop
Sao Paulo, 9 April (Argus) — Brazil's development bank Bndes will make an additional R1.4bn ($278mn) available for its subsidized farm loan plan for the 2023-24 crop. The amount will be available on 11 April and will be for credit operations under the program, known as Plano Safra. Brazil's federal government initially offered R364.2bn in loans to medium-sized and larger farmers and R71.6bn for family farming for the 2022-23 season. Bndes has approved more than R28bn for the 2023-24 Plano Safra, a 23pc increase from the same period in the previous season, it said. The bank still has R4.6bn available to transfer to farmers — who can request loans until June — including the latest addition. The loans offered under the program are destined for the crop year starting on 1 July 2023 and ending on 30 June 2024. By João Petrini Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more