Week beginning October 5, 2009October 5, 2009
Export prices eased a little last week, due almost solely to the recent exchange rate movements taking effect. The exchange rate with the British pound continues to break records, the latest being that it has hit a 12 year high of 44.6p against the New Zealand Dollar. More speculation of further money being pushed into the UK economy is the likely cause of this reduction in the pound’s value. Meanwhile the Euro, at 48.8 cents, is climbing towards its five year average of 51.4 cents.
The average UK retail price of a frozen New Zealand lamb leg is £6.10/kg and has remained unchanged since early July, while export prices have reduced by 5%.
A favourable winter in the South Island has seen a rise in lamb kill numbers in the past two weeks. Many lambs in this region have hit maximum kill weights for export markets and are being off-loaded in order to avoid reductions in value when overweight.
This influx has seen schedule prices in the South Island reduce further to be just under $100 for a 17.5kg lamb. In the North Island prices eased a little less, to be at $100 for the same lamb. High volumes of heavy lambs also passed through the South Island prime sales during the week, with prices easing. A medium prime lamb averaged $112, while in the North Island the same lamb sold for an average price of $106.with a medium prime lamb now worth an average of $110.
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.
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.