Processors push on, restockers wait for rain

Cattle in field

The cattle market held steady this week, with no significant changes in the status quo. Yardings fell slightly to the lowest they’ve been in five weeks but remained above the average for this year so far. While industry sentiment remains strong, the market might be waiting on more rain on the south to steam ahead any further this spring.

Despite yarding nearly 3000 head less, the restocker yearling steer indicator came under the most pressure nationally this week, falling by 17c/kg to 462c/kg. This was likely down to more than 40% of the eligible stock coming out of the Roma store sale in Queensland, which averaged 459c/kg. Average weights were lower week-on-week for all categories of restocker steers at Roma, with the National Livestock Reporting Service quoting backgrounders as being more selective in their buying.

All other major national indicators remained within 5c/kg of where they were last week. Feeder steers increased by 2.5c/kg to 477c/kg, but remains about 10c/kg below where it peaked at a month ago. Feeder heifers fell about the same amount, to land at 428c/kg. Heavy steers lifted to 345c/kg, within a whisker of record highs. Supply is still pushing processors in this category, with Queensland again offering over half the eligible stock, while less than 200 head were sold in Victoria. Dubbo, NSW, was a standout, with 24% of the offering and averaging 485c/kg.

Last weeks slaughter slipped slightly, just hitting 143,000, and while it was the lowest numbers since mid-August, it still sits well clear of year-ago levels.  Processor cow prices dipped by 5c/kg to 375c/kg, 35% stronger year-on-year, and 46% above the 10-year-average for the indicator. Export demand from the US continues to support the cow job, plus reports are processors are filling their floors with cows where heavy young cattle aren’t available.

The Eastern Young Cattle Indicator continued to fall, likely on the back of the season being still in question in the south, closing the week at 871c/kg. Wagga Wagga, NSW, only had 7% of the throughput, but averaged 100c/kg better than the EYCI. Online, which is reported in liveweight, young cattle also lost ground, but less so, only dipping 5c/kg to 495c/kg. In the West young cattle landed at 809c/kg, down 11c/kg for the week.

The week ahead….

Finished cattle prices should be well supported in the short term, with export volumes expected to remain in record territory and demand from the US not slowing anytime soon. The restocker market, however, might need more moisture in the south to kick further – and if it doesn’t come, we could see much of the recent gains lost.

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Data sources: MLA, Mecardo

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