The cattle market was relatively stagnant this week, with prices sliding backwards only marginally in most cases, despite some mild support from reduced supply. The more substantial fall in the restocker index might be of concern, suggesting that a some of the renewed demand for young cattle we have seen in recent weeks could be losing some steam.

Last week’s east coast slaughter volumes revealed that kills have slipped by 2% to 90,962 head. This is the fourth consecutive week in kill reductions on a national basis, and while in line with the general downward five-year trend at this time of year, it does bring numbers 5% below 2021 levels.

While we don’t have complete figures on this week’s yardings, the preliminary running total comes in at around 36,000 head, which is about 5% below last week.  Everything is pointing towards lower supply supporting the market however. Eligible yardings contributing to the indexes that really matter were also down across the board, with the EYCI losing 6% week on week to 11,515 head, restocker volumes plummeting 26% to 1865 head, and feeder numbers slipping 6% also to 4,233 head.  Bucking the trend towards lower offerings were cows, whose volume increased 21% to 1,063 head.

The Eastern states Young Cattle Indicator (EYCI) tracked 7¢(<1%) lower to settle at 1,026¢/kg. The NSW based EYCI sub-index traded 30¢(3%) stronger week on week at 1,060¢kg cwt on slightly lower yarded volumes, while QLD and VIC based EYCI’S respectively trailed behind at 997¢/kg cwt and 968¢/kg cwt.

The Western Young Cattle Indicator (WYCI) pushed up again, lifting 31¢(3%) to end the week at 985¢/kg cwt, with a good chunk of the impetus coming from the vealer element of the index increasing from 28% to 48%. Steers traded at 996¢/kg cwt.

The national indicators were mostly down week on week, with the wooden spoon going to restocker steers, which lost 18(3%), closing the week at 627¢kg lwt, while medium steers lifted 2% to 464¢kg, both on reduced yardings.

No new data on 90CL this week so far, but we can still discuss the outlook. While there is an air of doom and gloom about the outlook of the US economy, with the US fed likely to deliver another punishing 75 basis point increase in interest rates at the next meeting, recession and belt tightening isn’t all bad for 90CL. As consumers trade down to cheaper products, ground beef demand is expected to rise, which will support prices. Steiner reports historical seasonal impact of the winter season has seen 90CL prices lift as much as 15%, and where the cattle futures curve is sitting at present is supportive that a 10% lift this year could be on the cards.

The week ahead….

In the general scheme of things, the market is holding up, but niggling signs of restocker demand weakening slightly in QLD are an area of concern. We are only a few days into spring though, and as pastures begin to build in response to the warmer weather, we might just see more confidence emerging in the coming weeks.

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Data sources: MLA, Mecardo

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