Close up of two cattle in yards

Despite the extreme pressure of the highest weekly yardings of young cattle seen in the last seven months, and probably for years, prices have held remarkably well. The Eastern Young Cattle Indicator (EYCI) only backtracked a few cents while other indicators also displayed considerable resilience. A spike in 90CL prices also indicates that the US market is heating up. Reports suggest China is relaxing COVID testing for meat imports which will make a massive difference to our ability to export beef there.

Last week’s east coast slaughter numbers posted a surprise slight backtrack of 2% compared to the prior week, reporting 105K head processed. While this decrease does seem off-trend compared to both last year, and the five-year average, the reversal is only minor and could prove to be a temporary blip on the radar.

The EYCI sidled backward again this week, dropping 6¢ (1%) to close the week at 751¢/kg cwt. Steers fetched 748¢/kg at Dalby, 849¢/kg at Roma store, 757¢/kg in Dubbo, and 772¢/kg in Wagga Wagga. Despite the index incorporating 18,707 head, which is probably the highest weekly volume seen in years, prices held up extremely well under the onslaught of supply pressure. That said, interest from restocker buyers, at only 1662 head is still quite low compared.

Roma reports indicated that worsening seasonal conditions across southern Queensland were the primary driver for a steep 90% week-on-week increase in yardings. Despite the rush to the saleyards, demand was firm enough to drive good competition among buyers, though the overall quality of the offering also played a part.

Dubbo also saw a solid 35% increase in yardings for the week. Quality was good and buyers rose to the occasion, though both restocker and feeder prices drifted lower. Down south, yardings surged 38% week-on-week at Mortlake, with the presence of feedlot buyers creating heightened competition for trade cattle while manufacturing steer specifications also sold well.

Shifting to the west, the Western Young Cattle Indicator (WYCI) dropped 538ٌ¢ (7%) to 739¢/kg cwt on account of a higher proportion of steers & heifers in the index (18%), and generally lower vealer prices. Steers also traded up 66¢ (10%) to 752¢/kg.

The national indicators saw another week of mostly red ink, with medium steer prices winning the wooden spoon by booking a 32¢ (9%) week-on-week fall; down to 338¢/kg lwt. Just bear in mind the index only covered 250 head. Encouragingly, the restocker steer index held ground at 482¢/kg lwt.

Supply across the country has continued on its steep trajectory this week, with volumes increasing 9k head (23%) week-on-week to 49K head, which is 7% above where offerings sat at the same time last year. The majority of the increase came from QLD and NSW, where yardings are 20% and 43% above 2022 levels, respectively. In contrast, saleyard numbers in VIC softened week-on-week, operating around at the level seen last year.

US frozen cow 90CL prices spiked by 32¢ (4%) last week, finishing the week at 739¢/kg. The rise was heavily related to shifts in market sentiment too, not fluctuations in the exchange rate, as prices in US dollar terms increased 6¢ (3%) to settle at US232¢/lb. Steiner’s report indicates that US buyers have become more active due to upward shifts in US domestic lean beef and chicken prices. There is also reduced concern about recession, and optimism about Chinese demand. On the US supply side, US cow and bull slaughter have begun trending below levels from a year ago, driven in part by pastoral conditions beginning to improve in some parts of the US.

The week ahead….

Ballarat weaner sales will offer over 5,000 head of cattle which will provide another solid test of restocker and feeder demand. Reports of higher feedlot buyer activity at Mortlake this week offers hope that we may see some stronger interest from the sector with a focus on quality, in-spec types.  

The BOM’s latest fortnightly view on the El Niño/La Niña (ENSO) outlook points toward neutral conditions till autumn, which may help boost producer confidence in the short to medium term.

On the flip side, the  Bureau of Meteorology (BOM) has predicted below-median rainfall in southern QLD over autumn, which is likely to keep supply high.

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Data sources: MLA, Steiner, Argus, Mecardo

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