It looks like the seasonal increase in processor demand that typically kicks in in mid October has finally emerged again this year after a long period of subdued activity. East coast cattle slaughter for the week ending the 14th October booked in a sizable increase, with kill numbers increasing by a very welcome 10%, to reach 88,804 head. If the same pattern as last year is followed, we might be in store for another two or three weeks of consecutive increases if the bad weather coming up this weekend doesn’t hobble the industry. The ramp up was reasonably broad based in nature, with QLD, and NSW contributing 52%, and 39% of the increment booked up respectively, while SA covered the 7% balance with a 25% week on week jump.
On the supply side, national yarding numbers also ramped up, with this week’s preliminary national figure at 43,000 head, representing a 20% week on week jump. All the action was in NSW though, where supply surged 70% from 10K last week to 17K this week, while in all other states apart from WA where a 50% increase to 3K head came to the yards, supply contracted. Looking at the individual index yardings, the supply into the EYCI index skyrocketed, booking a 63% week on week change to 14,738 head, while contributions to the feeder cattle index also increase 11%
The Eastern states Young Cattle Indicator (EYCI) was flat as a tack this week, coasting along at an even keel to settle back at 1,031¢/kg cwt. Dalby, Roma Store and Gunnedah were the primary influencers on the index, at 22%, 17% and 10% of total eligible yardings, respectively.
Wagga came in as the most expensive cattle saleyard on average, at 1082¢/kg cwt , while Roma Store prices came in at 1075¢/kg in comparison.
The Western Young Cattle Indicator (WYCI) suddenly crashed 100¢(10%) this week, to close at 891¢/kg cwt, with the steep fall helped along by a 16 percentage point decrease in the vealer percentage of the index to 24%, and the 60% fall in eligible yardings to 261 head failed to provide much support. Yearling steer prices performed better than the average though, at 920¢/kg cwt. It has to be noted though that WA saw a sizable flush of cattle supply into the yards this week, with the biggest yardings since May 2022, which may have left buyers spoiled for choice in other specifications, and dragged the market down.
The national indicators were either flat, or flattened. While most indicators remained relatively static this week, the medium steer price tanked, losing 69¢(14%) to close at 423¢/kg. The cause seems to be the absence of the support of the Shepparton marketplace due to flooding though, which was typically booking premium prices, boosting the index, so the fall is nothing to panic about.
The 90CL US frozen cow price as of the week ending 13th October rose strongly by 15¢(2%), to settle at 870¢/kg swt. It was all driven by a falling exchange rate again though, as the underlying US price actually slipped by 3¢/lb week on week.
The week ahead….
Severe storms and flooding coming up this weekend in central Queensland, down to northern VIC are likely to hose down restocker demand in the next coming weeks, but we have to look further forward. In the background, strengthening processor demand is probably on the cards in the next couple of weeks if the floods don’t shut down production, so watching over the hooks grids carefully for premium prices (if you can deliver cattle) might be a strategy worth pursuing.
Once the negative effects of the aftermath of the floods have been sorted out, expect producers to focus on the positive impact of the full moisture profiles, and good pastoral outlook, so restocker demand is likely to also strengthen in a few weeks, provided that the paddocks dry out enough, and roads are repaired to enable transport to operate unhindered.