It’s been a dry second half of April across the eastern sheep regions, and the post easter slaughter numbers are lower than when we entered the easter break. Lower supply this week was not enough to halt declining lamb indicators.
The market saw double digit declines across all Indicators (Table 2). Heavy lambs were the least impacted, down 28¢ to 1106¢. The national Mutton Indicator lost 53¢ to 779¢/kg cwt. The Eastern States Trade Lamb Indicator (ESTLI) lost 46¢ to 1165¢/kg cwt. Numbers and trade lamb indicators in WA were relatively flat. The WATLI lost 7¢ to 1060¢/kg cwt. It wasn’t dramatic supply pressure driving prices lower, with saleyard throughput 6% lower week on week per NLRS indicative numbers.
Straggling supply has been the story of the market for some time now, but after the southern rainfall sugar hit it appears the demand equation is beginning to shift as restocking demand takes a step back. Combined slaughter did bounce back last week to 522K head but if this is the new level of processor demand on a weekly basis, this would be 25% lower than the numbers slaughtered the week after Anzac Day last year.
Scope of the Middle East impact on sheepmeat exports is beginning to become more transparent. Weekly average flights landing into Dubai (from all locations) are down 56% YoY for this time of year (per Airnav radar) with 585 flights arriving in the last 7 days. The weekly average has been tracking slightly higher each week since March 23rd, and this week was double air traffic than we saw at the start of the conflict. Lamb volumes into the middle east as of Monday were just 4% shy of March’s total exports so it appears that lamb volumes will track higher into the region this month. Mutton volumes MTD are down 14% compared to March and haven’t rebounded as strongly. Significant uncertainty remains around trade into and out of this region, but the upward trend in air traffic is an important sign. This week saw a strong 84¢ decline for the National Light lamb indicator to 1086¢/kg cwt but remains 44% higher YoY.
The week ahead….
Anzac Public holiday still to come which muddies up the waters on the processor demand front.
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Slaughter numbers back from break weaker?
The market saw double digit declines across all Indicators (Table 2). Heavy lambs were the least impacted, down 28¢ to 1106¢. The national Mutton Indicator lost 53¢ to 779¢/kg cwt. The Eastern States Trade Lamb Indicator (ESTLI) lost 46¢ to 1165¢/kg cwt. Numbers and trade lamb indicators in WA were relatively flat. The WATLI lost 7¢ to 1060¢/kg cwt. It wasn’t dramatic supply pressure driving prices lower, with saleyard throughput 6% lower week on week per NLRS indicative numbers.
Straggling supply has been the story of the market for some time now, but after the southern rainfall sugar hit it appears the demand equation is beginning to shift as restocking demand takes a step back. Combined slaughter did bounce back last week to 522K head but if this is the new level of processor demand on a weekly basis, this would be 25% lower than the numbers slaughtered the week after Anzac Day last year.
Scope of the Middle East impact on sheepmeat exports is beginning to become more transparent. Weekly average flights landing into Dubai (from all locations) are down 56% YoY for this time of year (per Airnav radar) with 585 flights arriving in the last 7 days. The weekly average has been tracking slightly higher each week since March 23rd, and this week was double air traffic than we saw at the start of the conflict. Lamb volumes into the middle east as of Monday were just 4% shy of March’s total exports so it appears that lamb volumes will track higher into the region this month. Mutton volumes MTD are down 14% compared to March and haven’t rebounded as strongly. Significant uncertainty remains around trade into and out of this region, but the upward trend in air traffic is an important sign. This week saw a strong 84¢ decline for the National Light lamb indicator to 1086¢/kg cwt but remains 44% higher YoY.
The week ahead….
Anzac Public holiday still to come which muddies up the waters on the processor demand front.
Have any questions or comments?
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Data sources: Mecardo, MLA, Bloomberg, Airnav Radar
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Independent analysis and outlook for wool, livestock and grain markets delivered to you as it’s published
Listen to the podcast
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.