CME: Beef Inventories at February-end Lower Than a Year Ago

Mon, 26 Mar 2018

US - On Thursday afternoon, USDA issued the results of its monthly 'Cold Storage' survey and we thought the results were generally bearish for meat protein prices, reports Steiner Consulting Group, DLR Division, Inc.

Beef inventories at the end of February were 460.3 million pounds, 8.4 per cent lower than a year ago and 4.1 per cent lower than the five year average. We think high beef trim prices and expectations for higher supplies in April and May likely induced some end users to deplete inventories.

The drawdown in stocks in February was 8.3 per cent compared to an average drawdown of 3 per cent in the last five years. Last year boneless beef inventories declined sharply in the first half of the year and so far we have seen a similar trend.

Beef imports and beef production year to date are higher than a year ago, leading us to think that the main reason for the lower beef stocks is robust domestic and export demand. The results are constructive for beef prices in early spring.