Exports to China will be important to balance beef supply

"The maintenance of the flow of beef exports to China in the coming months will be fundamental to avoid pressure on the prices of fattened cattle, in a scenario of comfortable supply in the short term," says Cesar de Castro Alves, manager of Agro Consulting at Itaú BBA. China postponed from November to January the decision on the safeguard investigation process, a relevant issue for Brazil, the main supplier to the Chinese market, and for other exporting countries. The postponement reduced the pressure on the December futures contract. With the physical market stable, the shorter maturities have no room for increases beyond current levels. The relationship between beef and cattle prices indicates some room for price advances in the short term. However, the high supply limits more consistent movements. Preliminary data on federally inspected slaughter (SIF) in November indicate the maintenance of the strong pace observed in September and October. The projected margins for ...