Mecardo Positive signs emerge in the cattle market

After losing 240¢ from the peak at the start of June, young cattle prices have turned a corner and posted a lift over the last week. Is it the bottom? Well, we won’t hang our hats on it just yet, but at these levels, there are certainly a few buyers willing to jump back into the market.

The Eastern Young Cattle Indicator (EYCI) picked up 31¢ over the week, finishing up at 918¢/kg cwt. Reports out of some of the big Queensland yards like Dalby and Roma suggest this was on a larger yarding. Buyers from southern areas are also being active in these northern yards.

We’ve seen more interest at both ends of the market with Feeder steers lifting 19¢ in Queensland and 10¢ in NSW over the week. Cows also came into stronger demand this week with the National Medium Cow indicator increasing by 14¢ to 284¢

In the last week of July, cattle slaughter lifted 1% compared to the week prior. We are continuing to see slaughter stronger than at this time last year. It was 4% higher for the full week compared to year ago, which at a basic level, stronger supply should see prices lower.

In the same week, cattle yardings shrunk 33% from the week earlier. Numbers were back in all states, but Queensland was the main driver. For a few weeks there, cattle throughput in WA was higher than this time last year, but last week saw a significant drop to under 1,000 head of cattle yarded.

Reports from Steiner suggest the imported lean beef market in the US has softened due to the high rate of domestic cow slaughter and the seasonal slowdown in demand. The 90CL imported beef price fell 1.4% in AUD terms over the week.

The week ahead….

It should be noted that while the recent falls in price have been hard and fast over such a short space in time, the market isn’t sitting much lower than this point last year. Feeder steers are priced 6% lower YOY and the EYCI 8% lower. The price of beef and the favourable AUD is well positioned to support the outlook for cattle.