Forward buying of beef has declined sharply, suggesting more headwinds for beef sales ahead. This is both on the domestic and export front. Consider that sales for beef delivering 22‐60 days out in the last four weeks have been 15% lower than a year ago. This is consistent with the slowdown in beef features but its not that far off from pre‐COVID levels (2019).
Sales for beef delivering 60‐90 days out, however, are down 53% from a year ago and also far below 2019 levels and sales for delivery 90 or more days in the future are down 56%. Beef export sales continue to track well below year ago levels. Outstanding beef sales (beef sold but not yet shipped to export) are currently running about 30% below year ago levels. Beef production will be lower in Q2.
The question the market will seek to answer is if current pricing risks overshooting to the top side, resulting in a bigger decline in sales than warranted.
Source: Daily Livestock Report - Steiner Consulting Group - Read Full Article