November 24

11/24 – In its first cattle report in two months, USDA said feedlot inventories on Nov 1st were 11.71M head, 2.2% below a year ago. New placements onto feedlots in Oct were down 10.0%. The cattle supply situation continues to deteriorate with no end in sight. On a positive note, the President lifted the remaining 40% tariff on Brazilian beef, after cancelling a 10% tariff a week ago. That leaves Brazilian beef imports that are over quota, which includes everything since Feb, still subject to a 26% import duty – but that’s now at least on par with the pre-tariff scenario. Beef 90s trimmings could see some modest price decline through year’s end. The bigger tariff story is in coffee, where the removal of the remaining 40% tariff on Brazil is strongly bearish for futures prices. Coffee futures (ICE), which were $2.93/lb on Aug 6 when the tariff was imposed, soared to a record-high of $4.32 on Sept 15, and closed at $4.00 on Friday (11/21).