The process of devising a protocol for Canadian live cattle to enter the United States got a bit more difficult when Japan discovered its eighth BSE-infected animal.
It is the first case of bovine spongiform encephalopathy to be confirmed in Japan in an animal less than two years old. Generally, scientist believe it takes at least 21/2 years or more to develop the disease. That’s why Canadian beef exports to the U.S. are restricted to meat from cows younger than 30 months of age.
The previous seven cows confirmed with the disease in Japan were all about five years old.
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The 23-month-old diseased Japanese bull confirmed this week doesn’t fit the pattern of previous infections and raises questions about how it was infected.
Cattle futures in the U.S. rose on the report, with traders speculating it would delay the import of Canadian live cattle.
But the news was still unclear and the real impact will take time to assess.
More certain was the impact from news that Australia had sold Egypt 160,000 tonnes of wheat.
Wheat prices had been supported by expectations that a lower American dollar and tight world supplies would generate strong exports of U.S. wheat.
Indeed, wheat markets had modestly rallied the previous two weeks.
But the deal with Egypt, a traditional U.S. customer and ally, signaled Australia’s intention to win back market share lost last year when its production fell to a drought-ravaged 9.39 million tonnes.
But this year it expects a bumper crop.
On Oct. 6, the independent group Australian Wheat Forecasters said that recent rain should add another 800,000 tonnes to the wheat crop, bringing the total to 24.4 million tonnes. That is close to the record 24.9 million harvested in 1999-2000.
The United States Department of Agriculture’s September production estimate for Australia was 24 million tonnes.
AWF said there is still another couple of weeks of threat from frost, but the coldest period has passed.
While the Egypt-Australia trade was big news this week, the world’s wheat supply remains tight. The supply situation will become a little clearer Oct. 10 when the USDA releases its latest world supply and demand outlook.
But the future direction of prices will mainly depend on how badly importers want wheat and who they buy it from.
