The US market continues to show a weaker tone for South American beef, amid strong competition from Brazil and a more speculative attitude among importers. A regional source said the foodservice segment continues to benefit from seasonal summer demand, but the situation is different for commodity products.
“There is a lot of speculation among the large importers. They are putting out very low bids in an attempt to pick up opportunistic purchases,” the source said.
According to this view, some buyers have offered between US$/t 5,100-5,200 CFR for Brazilian 95 CL beef, although it remains unclear how much volume has actually traded at those levels. Market indications place Brazilian 90 CL beef at around US$/t 5,200-5,250 CFR and 95 CL at approximately US$/t 5,400-5,450 CFR, although there is considerable variation between transactions.
From Paraguay, an exporter reported indications of US$/t 5,200 CFR for 90 CL blocks, while in Argentina deals were reported, within quota, at US$/t 5,600 FOB for 90 VL forequarter beef and US$/t 6,500 FOB for 90 CL forequarter beef.
An Australian trader said the main development in recent weeks has been Brazil’s commercial strategy as its China quota is expected to be exhausted during July. According to the trader, several Brazilian processors have already adjusted their production plans and started offering large volumes of beef into the US market at aggressive prices.
“Brazil came out offering a lot of volume, and that clearly slowed the market,” he said.
However, he believes the situation is temporary and could last two to three months until trade flows between China and the US find a new balance.
“Everyone agrees this is a temporary window,” he said. In his view, once Brazil regains quota availability in China or the Chinese market reacts to tighter supply, part of that volume should return to its traditional destination.
