Buyers don’t have to stretch far to find volumes of cattle at the moment. While patches of the east have either received or are due for a few showers, the cattle keep coming. The market was generally softer this week, largely down to ample supply.
Over 74,000 head of cattle were yarded across the country,
which was a lift of 20% on the week prior. Over the last four weeks, yardings
have been 44% stronger than the same time last year and slaughter has been 10% stronger
year-on-year. With these levels of supply, it’s little wonder we are starting
to see prices lose their momentum.
The price decline witnessed this week wasn’t confined to any
one segment of the market, but weakness crept in across the board. The Eastern
Young Cattle Indicator dropped 20¢ on the week to settle at 650¢/kg cwt. This
level was last seen in July. Young cattle prices also slipped in the West, losing
28¢ to 592¢/kg.
Feedlot buyers are well supplied in the north. Argus reported
that feedlots in southern QLD and northern NSW are booked out weeks ahead. Both
Roma and Dalby saleyards have seen an influx in numbers, particularly of heavy
feeder weight cattle. The National Feeder Steer Indicator lost 13¢ this week,
to finish at 354¢/kg lwt. There’s around a 30¢ spread between feeder values in
NSW and Vic, reflecting the seasonal conditions. But as shown in this weeks trade analysis (view here) there’s
little downside risk for those that can buy in light cattle for the paddock to
get to export feeder weight.
Even though reports from the US show imported beef prices
appear to have hit a wall for now, Australian processors remain encouraged by
the outlook. US cow supply is unlikely to increase, keeping their domestic beef
trim supply tight for the foreseeable future. A seasonal uplift in beef supply
from across the ditch in NZ will add some more competition to the export trade in
the months ahead.
Next week
Until we see a substantial rainfall event, supply is likely
to track close to current levels. Given export demand seems stagnant at best in
the near-term, we will be looking to the skies for price improvements.
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Cattle buyers are content for now
Over 74,000 head of cattle were yarded across the country, which was a lift of 20% on the week prior. Over the last four weeks, yardings have been 44% stronger than the same time last year and slaughter has been 10% stronger year-on-year. With these levels of supply, it’s little wonder we are starting to see prices lose their momentum.
The price decline witnessed this week wasn’t confined to any one segment of the market, but weakness crept in across the board. The Eastern Young Cattle Indicator dropped 20¢ on the week to settle at 650¢/kg cwt. This level was last seen in July. Young cattle prices also slipped in the West, losing 28¢ to 592¢/kg.
Feedlot buyers are well supplied in the north. Argus reported that feedlots in southern QLD and northern NSW are booked out weeks ahead. Both Roma and Dalby saleyards have seen an influx in numbers, particularly of heavy feeder weight cattle. The National Feeder Steer Indicator lost 13¢ this week, to finish at 354¢/kg lwt. There’s around a 30¢ spread between feeder values in NSW and Vic, reflecting the seasonal conditions. But as shown in this weeks trade analysis (view here) there’s little downside risk for those that can buy in light cattle for the paddock to get to export feeder weight.
Even though reports from the US show imported beef prices appear to have hit a wall for now, Australian processors remain encouraged by the outlook. US cow supply is unlikely to increase, keeping their domestic beef trim supply tight for the foreseeable future. A seasonal uplift in beef supply from across the ditch in NZ will add some more competition to the export trade in the months ahead.
Next week
Until we see a substantial rainfall event, supply is likely to track close to current levels. Given export demand seems stagnant at best in the near-term, we will be looking to the skies for price improvements.
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Click on graph to expand
Data sources: MLA, Mecardo
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Independent analysis and outlook for wool, livestock and grain markets delivered to you as it’s published
Listen to the podcast
Join the Mecardo team for the Commodity Conversations podcast, where we provide short weekly market recaps and longer conversations with guests to discuss the drivers and trends in livestock, grain and fibre markets.
MEET THE TEAM
Our team of market analysts are recognised as leaders in Australian Ag market analysis, providing invaluable insights to help you navigate the ever-changing commodity landscape.
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We don’t just bring you the most up to date market insights. Find out more about Mecardo’s services including risk management advisory, modelling, benchmarking, research & consultancy.