Last week’s slaughter numbers were a lot more encouraging than the prior week’s results, as the 96,372 head represented a lift of 39% compared to the same week in January, which is a really promising sign for beef demand.
The Eastern States young cattle index (EYCI) has continued to drift sideways, losing 3¢ (<1%) to close at 781¢/kg cwt. This was supported by a 9% reduction in eligible yardings contributing to supply. As usual, Roma, Dalby, Wagga & Dubbo were the main contributors, making up 48% of the total head included within the index. Roma store steers sold at 882/kg, Wagga at 761¢/kg cwt, Dalby at 826¢/kg, and Dubbo at 729¢/kg cwt. The report from Roma was upbeat, with solid restocker interest occurring at the sale.
The Western Young cattle indicator (WYCI) pushed up 12¢ (2%) to close at 857¢/kg cwt. Steers traded up 39¢ (6%) at 749¢/kg cwt. The report from Muchea indicated that there was good attendance and interest from processors, live exporters, and feed-lotters alike.
Supply was down this week, slipping 24% compared to the week prior, however, this downturn in marketing interest is nothing unusual; it can be traced back to the impact of the Australia day public holiday.
The national indicators also displayed relative price stability, with the best performer in the pack being restocker steers, which gained 3¢ to close at 495¢/lg cwt. On the other end of the spectrum, finished cattle prices are still coasting gently downhill, with heavy steer prices slipping 8¢ (2%) to close at 347¢/kg cwt. Processor steers lost 17¢ (4%) to close at 384¢/kg. As usual though, with only 143 and 31 head contributing to the indexes respectively, take these price changes with a grain of salt.
The US frozen cow 90CL price gained a 1¢ to lift marginally to 721¢/kg swt. Steiner’s take on the mood in the US market is more upbeat this week, with reports of beef buyers chasing forward coverage to shore up their supply. Product from Brazil landing on US shores has had limited impact upon the markets, this is due to most of the volume already being spoken for long ago.
The week ahead….
Historically speaking, cattle slaughter tends to rise into the February and March period. Despite the fast ramp-up of slaughter numbers this year compared to last, it’s possible that there might be some steam left in it yet. With heavy cattle and cow prices getting cheaper; there could be ample support for finished cattle still in reserve.
On the supply side, the real influx of cattle is yet to come, with the peak typically happening in mid to late February. Given the lukewarm enthusiasm among many restockers at the moment, the feeling is that we may be in for another downdip in pricing over the next month or so.