The drop in Mexican cattle exports to the US for fattening could stage a, temporary, revival – although this may come through too late to be reflected in feedlot data to be released later.
The US Department of Agriculture's Mexico City bureau cut to 1.2m head its forecast for Mexico's live cattle exports in 2013, implying a 22% slump on the record 1.54m head shipped last year.
The downgrade reflects rains which have eased drought conditions, boosting prospects for domestic pasture and feed grain crops - and prompting ranchers to turn to herd rebuilding rather than selling off stock.
Indeed, the Mexican cattle industry "is optimistic that seasonal and normal rains will permit cattle inventory recovery in the coming years", after a decline in the herd to a forecast 50-year low this year.
However, the bureau's estimate nonetheless implies a marked improvement in the import rate for the latter months of 2013.
With imports averaging 62,000 head in the first five months, the estimate signals an average of 1100,000 head a month from July-to-December.
Estimates for USDA cattle on feed report, to be released August 23
Placed on feed, July: 97.5%.
Range of estimates: 92.9-111.6%
Marketed, July: 204.4%.
Range of estimates: 102.5-106.2%
On feed, August 1: 95.8%
Range of estimates: 94.4-98.2%
Source: USDA, Dow Jones. Data as percentage of year ago figure
"Exports customarily ramp up at the end of each year," it said.
And shipments to the US could prove especially firm, given new facilities in the Mexican state of Nuevo Leon close to the border.
"The new export pen at the Colombia crossing point could contribute to increasing Mexican live cattle exports to the US as the greater geographic accessibility of the pens could lower transaction costs," the bureau said.
However, any revival had not shown up by last month in the US, when imports from Mexico of feeder cattle – those ready for fattening - fell by 54% to 43,000 head.
This followed a 45% decline in overall US imports of Mexican cattle in the first six months of 2013.
Indeed, the low figure has fuelled doubts over some market expectations that feedlots may have raised placements last month, as some brokers have predicted, ahead of US Department of Agriculture cattle on feed numbers due later.
"It is important to consider the impact that the sharp decline in Mexican feeder shipments to the US has had on feeder cattle availability in Texas, Oklahoma and surrounding states," Paragon Economics and Steiner Consulting said in a report.
However, broker Allendale - whose forecast of an 11.6% rise in placements was at the top of an unusually-wide range of analyst forecasts – flagged the impact of low grain prices in supporting feedlot margins.
"Cattle feeders are taking notice of cheaper corn coming this fall. Corn in western Kansas fell from $7.30 a bushel in June to $6.92 in July," Allendale said.
The USDA bureau forecast the Mexican calf crop rising in 2014 for the first time in four years, in a sign of the better prospects for the country's cattle farmers thanks to improved rains, and expectations for more.
Mexico's Comisión Nacional Del Agua (National Water Commission) has forecast that "rains should help increase grain yields over the initial 2013 spring-summer crop cycle", which is harvested between November and January, the bureau said.
"This, in turn, should encourage cattle feeding.
"Moreover, pasture lands are returning to almost normal conditions in central and southern Mexico which should allow for cattle to return to these lands for grazing."