Southern processors are pushing north in search of slaughter ready stock and it’s working wonders to heat up competition across the field. An increase in yardings didn’t dampen momentum this week as prices across many saleyard indicators have hit the highest point in over a year.
The
Eastern Young Cattle Indicator lifted 14.50¢ on the week to 640¢/kg cwt.
Restocker buyers were at the front of the rails again in QLD to purchase young
cattle, with plenty of feed around the state encouraging cattle back to the
paddock. In QLD restockers secured the majority of volumes on offer and paid a 15¢
premium on feeder buyers. However, in NSW it was Feeder buyers paying top
dollar.
Processor
cows stole the show again in both Victoria and Qld with prices lifting around
25¢ on the week, with a more modest 7¢ gain in NSW. On the whole the National Processor
Cow Indicator ended the week at 278¢ which is 70¢ higher year on year. As
mentioned last week, strong demand for 90CL trim in the US and favourable
processing margins are supporting this segment of the market. This time of year,
is typically the peak in demand for beef in the US, marked by their summer
grilling season so while tight US beef production is likely to keep demand
strong, it may not remain at these levels as we move closer to their
winter.
The National Heavy Steer Indicator gained another 5¢ this
week to 366¢/kg lwt. This is around 40¢ higher than just a fortnight ago. While
saleyard feeder steer prices didn’t move higher this week, the Northern Cattle
Feeder Steer price gained 10¢ on the week according to Argus. Feedlots are
becoming notably active buyers at saleyards, with a shortage of feeder cattle
forcing them to increase their bids in order to meet contractual obligations.
It wasn’t tighter yardings that forced stronger competition.
Nationally saleyard throughput lifted to 61,239 according to preliminary MLA
reports. This was 6% higher than the week prior.
Next week
The market feels like it’s got some momentum under it at the moment, which may see the current strength continue in the weeks ahead. How many sellers the rising market brings out of the shadows will determine where the limit is, but strong processor activity is only positive for the weeks ahead.
With rain falling in parts of southern Australia in recent days, and more set to follow, there could be increased opportunity for restocker movement in
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Southern buyers chasing the warmth
Next week
The market feels like it’s got some momentum under it at the moment, which may see the current strength continue in the weeks ahead. How many sellers the rising market brings out of the shadows will determine where the limit is, but strong processor activity is only positive for the weeks ahead.
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Click on graph to expand
Data sources: Mecardo, MLA, Argus
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Have any questions or comments?
Season shores up cow price
With rain falling in parts of southern Australia in recent days, and more set to follow, there could be increased opportunity for restocker movement in
Rain slows supply, restockers ramp up
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A cattle slaughter peak is coming?
With October coming to an end, it’s usually a time of increasing cattle supply and slaughter rates. Historically, this ties in with weaker prices, but
Lower numbers stop the drop
After the heat has taken some of the shine off cattle indicators in the last few weeks, a 21% week-on-week drop in supply has halted
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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.