03 May Good timing for a short week.
With ANZAC day falling in the middle of the week, cattle supply was well down. Young Cattle yardings halved, and young cattle prices managed to remain steady. Other cattle categories followed a similar trend, as the market treads water waiting for rain.
The Eastern Young Cattle Indicator (EYCI) managed to find some support this week on the back of much lower cattle yardings. The lack of sales on Wednesday obviously helped see yardings fall, but there was also a major pull back in supply as producers baulked at the lower prices.
Figure 1 shows the yo-yo that has been EYCI yardings over recent weeks. It will be interesting to see where yardings head when we get back to a full week and with persistent low prices.
The EYCI did manage to steady however, with young cattle prices in Queensland, Victoria and NSW all managing to hold their levels at just under 500¢/kg cwt for the 270-290¢/kg liveweight range.
A few anecdotes we heard this week suggest light and restocker cattle might have found a base. There have been a few big yardings around, and prices managed to move higher as many backgrounders have decided they are cheap enough to take a punt on some rain arriving soon.
There is little doubt we will see a price rise when it does rain, but the trend in 2012 (figure 2) is looking eerily similar to current price moves. The market was then coming off record highs, similar to what we have seen recently. A lack of spring rain obviously helped the end of year fall.
The week ahead
So we wait another week for some rain to appear on the forecast. The longer we wait the more pressure comes on prices as potential autumn growth declines. It’s only five weeks until winter. Export prices have declined, but this doesn’t eliminate upside, with the 90CL still north of 550¢, which is a price many growers would take for their cattle at the moment.