The meatpacking industries took their foot off the market, as the scales are more comfortable; Now the rancher needs to get the fat ox out of the square!
The physical market for live cattle had a day of stability in prices this Tuesday, the 11th, in all evaluated livestock markets. As expected, the bullish movement is losing strength in the face of more comfortable scales and the arrival of the Lunar New Year in China. In addition, the domestic market continues with more restricted flow, remembering that January is a month of lower consumption by Brazilians.
The upward trend in live cattle prices lost strength, opening space for industries to pressure and test offers below the reference in some livestock markets, but still without success in the negotiations. The rancher now needs to limit the supply of animals for slaughter, negotiating smaller lots and putting pressure on prices at the arroba. If you don’t have this “game”, prices may have a pullback in the next few days.
According to an analysis by Scot Consultoria, in São Paulo, prices remained stable in the daily comparison. The market was less buyer on Tuesday due to relatively comfortable scales. Prices for fat ox, cow and heifer are R$338.00/@, R$310.00/@ and R$327.00/@, in that order, gross and forward prices.
The premium for cattle destined for export reaches R$15.00/@, so the negotiations for cattle with up to four teeth, the “China ox”, business are still going strong and with values of up to R$350.00/@. According to the Agrobrazil app, ranchers from drinking fountain/SP, sold cattle for export for R$ 350.00/@ with cash payment and slaughter for January 21, 2022, see image below.
Therefore, in São Paulo, the average value for the finished animal presented an overall average at R$ 343.44/@, on Tuesday (01/11), according to data reported in the Agrobrazil application. The Goiás square had an average of R$ 328.18/@, followed by Mato Grosso Sul with a value of R$ [email protected] And in Mato Grosso, the average closed at R$ 334.63/@.
the price of Fat Boi Indicator/CEPEA, showed a slight decline at yesterday’s close, leaving a negative variation of 0.83% in the monthly comparison. Thus, the prices of the arroba of the fat ox in the São Paulo average jumped from R$ 339,00/@ to the value of BRL 333.70/@. Check out the graphic below!
Another highlight in yesterday’s quotations was the negotiation for the category of heifers, which reached the value of R$ 350.00/@ with a period of seven days for payment and slaughter for the 17th of January. The negotiation took place in the São Paulo square of Regente Feijó.
On B3, the live cattle futures contract maturing in Jan/22, closed the day quoted at R$ 339.25/@, devaluing -0.47% in the daily comparison.
internal market skating
Although shipments abroad remain strong, slaughterhouses report problems with wholesale/retail beef sales due to weak domestic consumption and high protein prices.
According to analysts, the prices of competing meats (chicken and pork) recorded new significant drops this Tuesday, which should further harm the sale of beef in the domestic market.
According to the IHS, a large part of the business carried out in the live cattle market aims to meet external demand., which has been recovering since the end of the Chinese beef embargo in mid-December.
In the first 5 working days of January, shipments totaled 35,480 tonnes of beef in natura, with average revenue of US$ 179.27 million, according to data from the Secretariat of Foreign Trade (Secex). The daily average shipped in the period was 7.09 thousand tons, an increase of 32.2% over the average exported in January 2021, of 5.3 thousand tons/day.
“China’s resumption of purchases of Brazilian beef should increase export results, as already observed in the first week of the year”, point out IHS analysts.
more comfortable scales
With the scales slightly more comfortable, the meatpackers spent the day under observation. Some plants still carried out deals of R$ 350.00/@ for animals destined for China, however, there are doubts as to the strength to break this barrier in the short term.
As you can see in the image below, the meatpackers in the Southeast and part of the Midwest managed to move forward and are currently running around 9 working days.
Giro do Boi Gordo through Brazil
- In São Paulo, in the interior of the state, prices were R$ [email protected], against R$ 340 on Friday.
- In the Minas Gerais triangle, business at R$ 335, stable.
- In Goiânia, stable price at R$ 325/@ forward.
- In Mato Grosso do Sul, live cattle was positioned at R$ 323/@ forward.
- In Mato Grosso, the arroba was indicated at R$ 314 in installments.
Wholesale market starts the week with accommodated prices, the short-term trend still refers to little reaction between now and the turn of the month.
Therefore, some of the main beef cuts sold underwent positive adjustments this Tuesday, such as the needle point and the forequarter, however the married bovine carcass remains quoted at R$20.50/kg. In general, prices remain firm and at high levels, even with the flow evolving slowly.