A little bit of rain and steadying prices

There was a bit of rain about in the south this week, and the markets stopped falling, and even gained some ground in some categories.  There is good rain forecast in Queensland over the coming week, so we might expect a bit more upside.

There was plenty of rain in the country’s North West, but this has little bearing on cattle markets on the east coast.  Eastern and Northern Victoria also saw some reasonable falls, which seems to have tightened supply.  It’s hard to know now that weekly yarding figures are almost a week old.

Figure 1 shows that Victorian Trade Steers had a solid rebound this week, after dropping to a two and a half year low.  The Vic trade steer indicator is sitting at 502¢/kg cwt, and NSW and Queensland have fallen to almost meet it, at 536 and 513¢/kg cwt respectively.

Feeder prices were relatively steady, and restockers a bit weaker, but the Eastern Young Cattle Indicator (EYCI) rallied 7¢ for the week, getting back to 538¢.  More interesting is the very weak EYCI supply.  At 13,787 head EYCI yardings were at winter levels.

Export markets had a small rise, with the 90CL indicator gaining 4¢ to 568.6¢/kg cwt, to move to a 5% premium to the EYCI.  Cattle prices seem to be a little underpriced, relative to the export market, and some rain in Queensland over the coming days might help correct this.

In the West the WYCI appears to be closer to ‘fair value’.  It lost 16¢ today to hit 573¢/kg cwt, but remains at a strong premium to its east coast counterpart.

The week ahead

Figure 2 shows us that it’s going to be a wet few days in most of Queensland.  Whether this is enough to move the market over all of the east coast is questionable, but figure 3 shows it’s about this week that southern supply starts to tighten, and prices start to rise.

We didn’t see a late summer rise last year, but you might say we are due.