Despite another drop in throughput, the lamb and sheep market this week was showing signs of supply fatigue in what has been a red-hot start to the year.
On the East Coast, combined lamb and sheep
yardings for the calendar year to date have already exceeded 2 million head
which is significantly higher than the start of any season in the last decade,
(2018 was the next highest at 1.67 million head).
Even with favourable export market
fundamentals and an improving outlook from weather to interest rates, this
level of recent throughput is always going to cause short-term downward
pressure on pricing. Despite a relaxation of numbers this week, pricing still
took a tumble; there is just plenty of stock to choose from at the moment for
restockers and processors alike.
Based on preliminary reports from MLA, this
week’s yarding was still 28% higher than the 5-year average for this sale week.
East Coast Sheep yardings fell 24% WoW but
did little to alleviate shifting demand for mutton as the National Mutton Indicator
lost 72ȼ to sit at 210 ȼ/kg cwt,
essentially repealing the gains of the last month.
After a gigantic yarding last week in
Tasmania, yardings on the Apple Isle returned to the usual operating level
which contributed to the 8.3% reduction WoW in lamb yardings on the East Coast.
Eastern States Trade Lamb Indicator (ESTLI) still lost 43 ȼ (-7% WoW) to 639 ȼ/kg cwt.
Saleyard reports in NSW and Victoria noted
that significant buyers were less inclined to bid or were not present
altogether. Finished lamb pricing
declined again as a result as the National Heavy Lamb indicator losing 47 ȼ to settle at 648 ȼ/kg cwt.
Next week
Processor demand has been strong as Figure 2 shows, but at this level of supply, short-term competition from the processing sector will likely be opportunistic as opposed to a given.
Numbers to the yards will need to continue to retreat to 5-year average levels to normalise pricing for lamb markets.
The big spring store sales are progressing through the Riverina, and it coincides with rapid spring growth in high rainfall zones further south and east.
Australian sheep and lamb exports increased in September but remained subdued in relation to recent trends. The US took dominant market share for the month,
The sheep and lamb market showed some resilience this week as yardings backed off slightly but remained at their second-highest level since June. Merino lambs
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The Endless (Supply) Summer
Next week
Processor demand has been strong as Figure 2 shows, but at this level of supply, short-term competition from the processing sector will likely be opportunistic as opposed to a given.
Numbers to the yards will need to continue to retreat to 5-year average levels to normalise pricing for lamb markets.
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Click on graph to expand
Click on graph to expand
Click on graph to expand
Data sources: MLA, Mecardo
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Have any questions or comments?
Taking a punt on merino lambs?
The big spring store sales are progressing through the Riverina, and it coincides with rapid spring growth in high rainfall zones further south and east.
Market kicks as quality starts to arrive
The story of supply has been driving the market since Winter, and demand has been reactive. Last week, there was movement at the station when
FTA fuels UK sheepmeat market
Australian sheep and lamb exports increased in September but remained subdued in relation to recent trends. The US took dominant market share for the month,
NSW leads sheep and lamb demand
The sheep and lamb market showed some resilience this week as yardings backed off slightly but remained at their second-highest level since June. Merino lambs
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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.
SERVICES AND CAPABILITIES STATEMENT BROCHURE
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.