March 25, 2011

Japan's US beef buys lift demand concerns

US cattle futures peaked to their highest level in more than a week early on Thursday (Mar 24) after Japan bought 3,900 tonnes of beef, its first reported purchase since the March 11 disaster in the country.

"That is the week after the earthquake. That is good news for the market," said Dennis Smith, broker with Archer Financial.

Cattle and hog futures dropped sharply in the days following the earthquake in Japan on fears the damage would curb meat demand. Futures have since recovered much of those losses.

"It alleviates some of those fears when you hear that they are still importing," Joe Ocrant, president of Oak Investment Group, said of Japan.

USDA on Thursday reported Japan's purchase as well as those by other countries, which put total beef export sales last week at 14,400 tonnes. Year-to-date beef export sales are 241,000 tonnes, up 33% from the same period last year.

Japan's purchase was the largest last week, followed by Mexico with 3,400 tonnes, and South Korea with 2,700.

In morning electronic trading, April cattle futures were up US$0.07 at US$1.148 per lb, the highest since March 15, and June cattle was up US$0.06 at US$1.1395.