Cattle in a holding pattern
After a few weeks of yo-yoing movements for the Eastern Young Cattle Indicator (EYCI) prices have stabilised this week as east coast cattle supply measures have moved toward more normal seasonal levels.
The EYCI closed the week a mere 3¢ higher to see it finish at 471.75¢/kg cwt. The minor price adjustment over the week was mirrored across national cattle prices at the sale yard too with most categories posting mixed weekly moves within the 5¢-10¢ range – Figure 1.
Restocker Yearling Steers the best performer on the week gaining nearly 9¢ to finish at 258.7¢/kg lwt buoyed by increased optimism from southern restockers encouraged by decent rainfall across Victoria and southern NSW this week.
After a few months of wild swings in east coast cattle yardings recent levels have settled just below the five-year seasonal average for late May at around 55,000 head changing hands at the sale yard – Figure 2. The historic seasonal pattern for the next month indicates tighter conditions are likely to see weekly yarding move toward the 45,000 head level into June.
East coast weekly slaughter levels have been climbing steadily throughout May to see it a whisker above the five-year seasonal trend at 156,175 head – Figure 3. This is the highest weekly slaughter recorded so far this season but as the long terms seasonal trend demonstrates we are only a few weeks away from the usually Winter dip in slaughter activity.
Fairly light rainfall is on the horizon for the coming week, with heavier falls centered close to the coastal fringe of Victoria and WA. The lack of rain for inland regions won’t lend support to cattle prices in the short term. However, if the slaughter and yarding trend follows the usual seasonal pattern lower into June the tighter supply may help to underpin prices.
In offshore markets the 90CL frozen cow indicator was a little softer this week but sitting at nearly 200¢ above the EYCI at 667¢/kg cwt it will continue to support local cattle prices on any dips too.