Traditional economic theory was at play this week with the value of the indicators moving in the opposite direction of their supply. In short - yardings fell and prices rose. What also fell was rain, across most of the Eastern Seaboard and isolated areas of WA, the BOM has forecasted more next week as well.
Buyers
were back according to multiple saleyard reports, increasing the demand and
applying upward pressure on prices. This was compounded due to a tightening of
supply, which meant there were fewer pens for the larger buying gallery to
compete on. The Eastern young cattle indicator experienced the largest increase
in value week on week, rising 3% to close the week at 630¢/kg. Gunnedah had the
highest average sell price of 654 ¢/kg and contributed 5% of the indicator in
volume.
The Processor cow indicator was flat week on week at 270¢/kg
despite a 30% increase in yardings. An increase in demand helped sandbag the downward
pressure on prices from the large increase in supply. Wodonga had the highest
average price of the indicator at 290¢/kg, a 7% premium. Its saleyard report
mentioned that “major domestic processors [were] operating after a lengthy
break”.
Feeder cattle broke rank and bucked the trend this week, the
only indicator to have a rise in value and supply. The indicator rose 2% to
close the week at 343¢/kg with a 1% rise in yardings. Gracemere had the highest
average price, and its saleyards report mentioned stronger competition, with
“several ideal lines of feeders” hitting records between 367-397¢/kg. The
average for the saleyard was 370¢/kg, a 7% premium on the national
indicator.
Initial yardings data from the NRLS saw a decrease of 8% in
yardings to 63.4k head. NSW was down 14% week on week and saw the most volume
of cattle out of all the states and territories. SA, WA and Tasmania all had
increases, but due to their relatively small size in comparison to the other
states was not enough to be material. Yardings still operating at elevated
levels, this week compared to the same week last year saw 20% more volume.
Slaughter levels for the week prior were down on the week
before by 2%. The main driver of the drop is due to Victoria which week on week
was down 15%. Despite this significant drop, Victorian slaughter remains above
the medium-term average as shown in Figure 2.
Next week
Rain on the radar will be welcome for those looking for an early night/sleep-in during harvest. For cattle producers, it may entice more restockers into the market or alleviate some summer feed supply concerns, both good for demand. Elevated levels of supply and demand remain and don’t expect to see a drastic shift in either as we approach the Christmas slowdown.
A historically high cattle market has pushed cattle-on-feed numbers lower for the September quarter. Confidence in the sector has far from waned, however, with capacity,
National cattle yardings jumped 13% week-on-week, unsurprisingly putting downward pressure on prices, but the market still showed a level of resilience considering the increase in
The Australian Bureau of Statistics (ABS) released its quarterly Livestock Products report last week, and the cattle industry has been setting new records. It appears
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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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Demand spurred on by Rain
Buyers were back according to multiple saleyard reports, increasing the demand and applying upward pressure on prices. This was compounded due to a tightening of supply, which meant there were fewer pens for the larger buying gallery to compete on. The Eastern young cattle indicator experienced the largest increase in value week on week, rising 3% to close the week at 630¢/kg. Gunnedah had the highest average sell price of 654 ¢/kg and contributed 5% of the indicator in volume.
The Processor cow indicator was flat week on week at 270¢/kg despite a 30% increase in yardings. An increase in demand helped sandbag the downward pressure on prices from the large increase in supply. Wodonga had the highest average price of the indicator at 290¢/kg, a 7% premium. Its saleyard report mentioned that “major domestic processors [were] operating after a lengthy break”.
Feeder cattle broke rank and bucked the trend this week, the only indicator to have a rise in value and supply. The indicator rose 2% to close the week at 343¢/kg with a 1% rise in yardings. Gracemere had the highest average price, and its saleyards report mentioned stronger competition, with “several ideal lines of feeders” hitting records between 367-397¢/kg. The average for the saleyard was 370¢/kg, a 7% premium on the national indicator.
Initial yardings data from the NRLS saw a decrease of 8% in yardings to 63.4k head. NSW was down 14% week on week and saw the most volume of cattle out of all the states and territories. SA, WA and Tasmania all had increases, but due to their relatively small size in comparison to the other states was not enough to be material. Yardings still operating at elevated levels, this week compared to the same week last year saw 20% more volume.
Slaughter levels for the week prior were down on the week before by 2%. The main driver of the drop is due to Victoria which week on week was down 15%. Despite this significant drop, Victorian slaughter remains above the medium-term average as shown in Figure 2.
Next week
Rain on the radar will be welcome for those looking for an early night/sleep-in during harvest. For cattle producers, it may entice more restockers into the market or alleviate some summer feed supply concerns, both good for demand. Elevated levels of supply and demand remain and don’t expect to see a drastic shift in either as we approach the Christmas slowdown.
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Click on graph to expand
Click on graph to expand
Data sources: MLA, BOM, Mecardo
Categories
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The Australian Bureau of Statistics (ABS) released its quarterly Livestock Products report last week, and the cattle industry has been setting new records. It appears
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Independent analysis and outlook for wool, livestock and grain markets delivered to you as it’s published
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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.