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The start of winter brought with it the rain, with widespread falls adding to the guage. Tighter supply this week was what helped drive prices higher for most of the cattle indicators. Dairy cows had the largest jump week on week and if you’re on the east coast its good news because all of those indicators are higher than they were this time last year.

The Eastern Young Cattle Indicator kept its head above the $6/kg mark, closing the week at 610 c/kg cwt. Yardings for the indicator were down by 26% (5.1k head) as recent rain slowed the supply of cattle to the yards. Feedlotters overtook the restockers as the largest buying group from last week. Roma and Wagga have the two largest contributions of the selling centres, both talk of a full field of buyers.

In the West, prices also rose for young cattle. The Western Young Cattle Indicator finished the week at 520 c/kg cwt, a rise of 20% week on week. Yardings were down by almost half to 364 head from 701. This strong increase week on week has closed the gap to the eastern counterparts from an 18% discount to a 15% discount.

Processor cow pricesrose 9% for the week, finishing the first selling week of winter at 221 c/kg lwt. Yardings for the indicator was back 13% on the previous week. Roma and Wagga again topped the list of the largest contributors to the indicator, with Wagga’s saleyard report mentioning that processors were not as active at the rail due to the backlog at abattoirs.

Restocker heifers rose slightly by 1% (3 c/kg) to average 250 c/kg for the week, again driven by tighter supply. On the other hand, restocker steer prices fell, ever so slightly by 0.5% (2 c/kg) to 330 c/kg. Yardings were back 48% for the week.

Processor capacity remains the bottleneck in the supply chain, as the tendered cattle from pastoral stations continue to come in droves following the muster at the conclusion of their wet season. This allows the processors to be more selective with what they price their buying grids at. For the  last week of May the slaughter figure was up 55% on the same week last year and 47% on the 5-year average for the same week.

Next week

A short selling week for all states bar WA and QLD to celebrate the Kings birthday will see some sales not take place and yardings are likely to be down as a result. The majority of the rain in the north seems to have ended according to the BOM, with not a lot on the forecast.

Processor capacity will continue to remain elevated as most processors don’t have availability for at least the next month. This could lead to a more subdued market until the backlog reduces. It does point to opportunity for backgrounders and restockers though, especially those whose pastures just got a nice drink.

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Data sources: MLA, BOM, Mecardo

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