First it was all the speculation of beefexport resumption to Japan and US elections, and then several presidential meetings. Some trade to Japan started, and then itstopped. And then it started again, amounting to a sliver of what used to be a very lucrative market (see chart). Now US beef packers speak enthusiastically of resumed beef exports to S. Korea and some beef is indeed moving to that market, likely a measure of good faith following the conclusion of a last minute FTA agreement.
But if beef exports were part of the FTA negotiations, then what happensif the deal is scuttled by an increasingly resentful US congress. As the Economist magazine recently put it "(the FTA approval) ha seven longer odds. Mr. Bush has little political capital even within his own party. And Congress is controlled by the Democrats, many of whom are deeply opposed to new trade agreements, most of whom want to get tougher on China and few of whom want to give theWhite House a political victory."
Bottom line: US beef will again move to Asian market.But it will likely be a long process, with little to no impact on current markets. But it makes for good conversation and one more bullet point when laying out market drivers.
source: CME Daily Email Newsletter 10 May 2007
Labels: Beef Export Charts May