As US President Donald Trump’s negotiators try to push through a better North American Free Trade Agreement with Canada and Mexico, US exports should be getting a boost from a weaker US dollar.
The Mar contract for the ICE US dollar index, an index of the greenback’s worth calculated against a market basket of other currencies, fell to a three-year low on Thursday at 88.255. This is a 6.86% fall from the most recent top of 94.76 on Nov. 7.
In general, the decline means US goods are about 6.86% cheaper for foreign customers than they were in early November. The decline accentuates a rise in the Dow Jones Industrial Average that resumed its strong upward slope in November after President Trump was elected.
The DJIA actually began its climb back in April but paused in intensity and actually declined a bit prior to the election. But the Trump win was credited with prompting a new wave of optimism among investors and sending stocks higher, hitting multiple record highs in succeeding weeks.
USDA REVISES 2017 BEEF EXPORT UPWARD
The USDA credited increased US supplies and higher export demand for the rise in US beef exports in November, and perhaps the weaker US dollar was only a small part of it, but a weaker greenback can’t hurt exports.
While November exports were up, it was the lowest growth month that far in 2017.
Product exports remained above last year and the 2011-2015 average all year.
After several months of strong growth, the pace of exports to Japan and Mexico slowed, and exports declined to Canada, South Korea, the Netherlands, Indonesia and Taiwan, the USDA said in its latest Livestock, Dairy, and Poultry Outlook report.
Through November, exports were 320 million pounds, or 13% higher. Most of the increased exports were to the higher income Asian countries, including Japan, South Korea, Hong Kong and Taiwan.
2018 BEEF EXPORTS SEEN UP
The USDA expected total 2018 US beef exports to rise to 2.985 billion pounds, up 110.0 million pounds, or 3.83%, from the estimated 2017 total of 2.875 billion. This follows expectations of higher quarterly exports in all quarters when compared with 2017.
First-quarter 2018 beef exports were pegged at 700 million pounds, up from 651 in the 2017 quarter. Forecast second-quarter exports of 730 million pounds would top second-quarter 2017 exports of 683 million pounds.
Third-quarter 2018 beef exports of 775 million pounds compare with same-quarter 2017 exports of 746 million pounds. Fourth-quarter beef export expectations of 780 million pounds would top estimated fourth-quarter 2017 exports of 795 million pounds.
CATTLE, BEEF RECAP
No cattle were sold Wednesday on the Livestock Exchange video auction.
Cash cattle traded early last week at $123 per cwt on a live basis, about steady with the bulk of the previous week’s action, and then at $126 to $127 on Friday, up $3 to $4. On a dressed basis, cattle traded at $200, up about $5.
The USDA’s choice cutout Monday was up $2.28 per cwt at $209.11, while select was up $2.30 at $204.13. The choice/select spread narrowed to $4.98 from $5.00 with only 62 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Friday, was $147.50 per cwt, up $0.44. This compares with Monday’s Mar settlement of $147.00, up $0.27.