The dry conditions in the south and lush conditions in the north currently look like providing balance to the seesaw of saleyard cattle supply and demand. The musical chairs of heavy turnoff cattle might be starting to ramp up, so how will processors pivot?
Easing supply pressure and more northern rainfall have contributed to an upward movement in most cattle indicators this week. Initial NLRS yardings at the time of reporting were 31% lower week on week. Nationally, saleyard indicator gains ranged from 11-25c/kg week on week. The Eastern Young Cattle Indicator (EYCI) gained 12c to 685c/kg cwt. While action at the saleyards was less dramatic than it has been in the last 2-3 months, slaughter continues to rise. NLRS reported slaughter last week reached 152,396 head, the highest mark since December 2019.
The volatile year of weather has continued with significant rainfall and flooding in Northern NSW, and our thoughts are with those impacted by the extreme weather in the mid-north coast. Further North to Dalby this week, per saleyard reports, cattle had yet to hit the market despite rainfall in the region. After seeing some of the rapid price improvements in cattle markets that occurred in the previous month, producers might be waiting for the market to respond to rainfall first before deciding on their strategies.
Rain continues to largely evade the regions on the east coast where it is needed most, so with turnoff cattle abundant in the south and northern producers sitting on a strong feedbase, the current supply pattern looks likely to continue. Particularly when we consider the flush of cattle to the yards we saw earlier in the month. If this were to be the case, then feeders and processors looking for weight will likely have to compete harder.
This week on Mecardo, Jamie Lee- Oldfield looked into the latest lotfeeding data update from ALFA (read more here). Feedlot utilisation reached a new high of 90%, driven in part by the dry southern conditions pushing more cattle into the feedlot system. At the demand end of the supply chain, grainfed exports are keeping pace, reaching a new monthly high in April with 37037 tonnes shipped in April. In the middle, capacity and margins for feeders remain steady. Lotfeeders are well placed to benefit from the lack of grass in the south, but tightening supply could see prices for ideal feeder types rise.
Next week
Rain typically brings stock back into the yards, but after a massive month of throughput, next week might not be as drastic from a supply point of view. will cattle stay, or will they go?
With a tightening supply, we move towards premiums for the pick of the bunch. If the pick of the bunch becomes too steep, the spread between heifers and steers could narrow
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Will cattle stay or will they go?
Easing supply pressure and more northern rainfall have contributed to an upward movement in most cattle indicators this week. Initial NLRS yardings at the time of reporting were 31% lower week on week. Nationally, saleyard indicator gains ranged from 11-25c/kg week on week. The Eastern Young Cattle Indicator (EYCI) gained 12c to 685c/kg cwt. While action at the saleyards was less dramatic than it has been in the last 2-3 months, slaughter continues to rise. NLRS reported slaughter last week reached 152,396 head, the highest mark since December 2019.
The volatile year of weather has continued with significant rainfall and flooding in Northern NSW, and our thoughts are with those impacted by the extreme weather in the mid-north coast. Further North to Dalby this week, per saleyard reports, cattle had yet to hit the market despite rainfall in the region. After seeing some of the rapid price improvements in cattle markets that occurred in the previous month, producers might be waiting for the market to respond to rainfall first before deciding on their strategies.
Rain continues to largely evade the regions on the east coast where it is needed most, so with turnoff cattle abundant in the south and northern producers sitting on a strong feedbase, the current supply pattern looks likely to continue. Particularly when we consider the flush of cattle to the yards we saw earlier in the month. If this were to be the case, then feeders and processors looking for weight will likely have to compete harder.
This week on Mecardo, Jamie Lee- Oldfield looked into the latest lotfeeding data update from ALFA (read more here). Feedlot utilisation reached a new high of 90%, driven in part by the dry southern conditions pushing more cattle into the feedlot system. At the demand end of the supply chain, grainfed exports are keeping pace, reaching a new monthly high in April with 37037 tonnes shipped in April. In the middle, capacity and margins for feeders remain steady. Lotfeeders are well placed to benefit from the lack of grass in the south, but tightening supply could see prices for ideal feeder types rise.
Next week
Rain typically brings stock back into the yards, but after a massive month of throughput, next week might not be as drastic from a supply point of view. will cattle stay, or will they go?
With a tightening supply, we move towards premiums for the pick of the bunch. If the pick of the bunch becomes too steep, the spread between heifers and steers could narrow
Have any questions or comments?
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Click on graph to expand
Click on graph to expand
Data sources: BOM, MLA, Mecardo
Categories
Have any questions or comments?
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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.