Rural Watch

Week beginning September 21, 2009
Monday, 21 September 2009

 

Rural Watch

Week beginning September 21, 2009


Lamb

Export meat prices were unchanged last week, in spite of further upward movements in exchange rates. Indications for the coming season are that prices will remain strong, despite these rates eating into margins.

For the current season, a New Zealand CKT lamb leg in the UK has had an average price of 163 pence per pound, which is 22% higher than the average for the 2007/08 season, reflecting the reduced availability.

Schedule prices have eased further this week, particularly in the South Island where the average 17.5kg lamb price registered an almost $2 per head drop to just over $102/head. The average North Island price eased around 50c per head to just under $102/head.

Meanwhile, good demand at prime sales during last week saw lamb prices lift in both Islands, pushing the average price for a medium prime lamb to $116 in the North and $125 in the South.


Beef

Markets continue to remain very quiet with only US imported bull displaying any movement last week, up US1c/lb to US142c/lb. US imported cow remained flat at US132c/lb.

NZX Agrifax’s prediction of US imported cow going no higher than US132c/lb before its seasonal decent to January, looks like it will come to fruition as we near the end of September.

US domestic cow is currently around US128c/lb - a US4c/lb discount on imported product. While this is not unusual for this time of the year, it obviously does dampen demand for imported meat. Meanwhile, the Japanese Yen continues to remain strong against the USD, making US exports very competitive in the Japanese market.

Meat company schedules across the country have eased between 5c/kg and 15c/kg on last week.


Grain

With global wheat stocks being replenished for the second consecutive year due to a relatively trouble free production season, international wheat prices have eased further, reports Midlands Seed. Chicago Board of Trade December Wheat Futures recently closed around USD$4.67 per bushel, having retreated USD$1.13 per bushel since the beginning of August.

The United States Department of Agriculture has revised upwards world wheat production estimates for the 2009/10 season by 4.4 million tonnes to 664 million tonnes. Meanwhile, the Australian Bureau of Agriculture and Rural Economics have just released an estimate of 22.7 million tonnes for this year's Australian wheat harvest, up around 2.8 million tonnes on last year.

International corn prices have continued to weaken in recent weeks due to the prospect of a record size crop in the US.

Domestic feed grain prices have been grinding downwards in recent weeks, with feed wheat having now fallen below $300 per tonne according to Midlands Seed. The volume traded has been negligible. Feed barley has been less sought after, competing in the dairy market with imported Palm Kernel Expeller. With most end users already holding good stocks of grain, combined with reduced requirements for supplementary feed so far this year and grass now growing, there has been little to stimulate early Spring demand.

Quality milling wheat cultivars meeting specifications have been marketable at prices approaching $400 per tonne. 

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