October has been a busy month at the nation's saleyards as throughput smashes 5-year average levels. This week has seen yardings relax significantly from these highs, but it wasn’t enough to stop easing cattle markets this week.
Discussion around the cattle market has been very positive,
and the resilience of pricing is evident when we have a look at the level of
supply flowing through the system of late. Last week’s yarding of 71490 head
was 67% higher than the 5-year average for that time of year. Slaughter
capacity has continued to support this level of volume but to preserve pricing,
restockers and feeders will need to ramp up in the coming weeks at this level
of supply.
There was a 27% decline in young cattle yardings on the East
Coast this week, but this wasn’t enough to halt the decline in the EYCI, which
finished 13¢ lower to 622¢/kg. Restocker and feeder interest was not as strong,
contributing to an easing market. The
Western Young Cattle Indicator dropped 8¢ to 568¢/kg and now sits 85¢ higher
than the same time last year.
Some scarcity in finished steers at the yards this week saw
the national Heavy Steer Indicator increase 15¢ to 341¢/kg. Other indicators finished the week lower as
Feeder steers nationally eased 4¢ to 349¢/kg and similarly, the national
Processor cow indicator lost 4¢ to 273¢/kg.
Angus Brown this week on Mecardo did an update on beef
exports (read more
here) which have eased from highs earlier in the year, but still remain
above last year and 5–year averages. Volumes are flowing and the US is
dominating market share but as reported by Steiner US imported beef prices have
failed to push higher in the last quarter.
Since the beginning of this financial year, the US¢/lb price
for the 90CL has traded in a very narrow band between 283 and 291 US¢/lb which
suggests that exchange rate movements aside, exporters and importers are content
at these levels. In Aussie dollar terms the 90CL averaged 922¢/kg last week
which is in the 95th percentile for 90CL pricing this decade. With
prices only higher than last week 5% of the time in the last decade, this would
be a nice level for equilibrium export beef prices to settle.
Next week
Winter crop harvest is beginning and currently feed grain prices in the North remain relatively affordable which suits feeders and restockers in theory.
The next test of confidence in cattle markets will come in the next few weeks. If supply remains elevated can the market continue to absorb the volume without pushing prices down steeply or have the restockers and feeders got their fill for now?
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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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Yardings back down to normal for now
Discussion around the cattle market has been very positive, and the resilience of pricing is evident when we have a look at the level of supply flowing through the system of late. Last week’s yarding of 71490 head was 67% higher than the 5-year average for that time of year. Slaughter capacity has continued to support this level of volume but to preserve pricing, restockers and feeders will need to ramp up in the coming weeks at this level of supply.
There was a 27% decline in young cattle yardings on the East Coast this week, but this wasn’t enough to halt the decline in the EYCI, which finished 13¢ lower to 622¢/kg. Restocker and feeder interest was not as strong, contributing to an easing market. The Western Young Cattle Indicator dropped 8¢ to 568¢/kg and now sits 85¢ higher than the same time last year.
Some scarcity in finished steers at the yards this week saw the national Heavy Steer Indicator increase 15¢ to 341¢/kg. Other indicators finished the week lower as Feeder steers nationally eased 4¢ to 349¢/kg and similarly, the national Processor cow indicator lost 4¢ to 273¢/kg.
Angus Brown this week on Mecardo did an update on beef exports (read more here) which have eased from highs earlier in the year, but still remain above last year and 5–year averages. Volumes are flowing and the US is dominating market share but as reported by Steiner US imported beef prices have failed to push higher in the last quarter.
Since the beginning of this financial year, the US¢/lb price for the 90CL has traded in a very narrow band between 283 and 291 US¢/lb which suggests that exchange rate movements aside, exporters and importers are content at these levels. In Aussie dollar terms the 90CL averaged 922¢/kg last week which is in the 95th percentile for 90CL pricing this decade. With prices only higher than last week 5% of the time in the last decade, this would be a nice level for equilibrium export beef prices to settle.
Next week
Winter crop harvest is beginning and currently feed grain prices in the North remain relatively affordable which suits feeders and restockers in theory.
The next test of confidence in cattle markets will come in the next few weeks. If supply remains elevated can the market continue to absorb the volume without pushing prices down steeply or have the restockers and feeders got their fill for now?
Have any questions or comments?
Click on graph to expand
Click on graph to expand
Click on graph to expand
Data sources: MLA, Steiner, Bloomberg, Mecardo
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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.