Holding pattern continues
Cattle markets continue their holding pattern this week as all eyes are on the forecast, looking for the season breaking summer rains. Finished cattle supplies appear to be easing ever so slightly, and this will support finished prices.
While most are waiting for the rain, some bit the bullet this week and send young cattle to the market. Figure 1 shows Eastern Young Cattle Indicator (EYCI) yardings hitting a five week high, and posting the second highest level since July.
It has been a dry week, and with little real precipitation on the forecast, the increased yardings saw the EYCI ease (figure 2). Demand remains good, with feeder, processors and restockers all seemingly comfortable with current levels.
There are some signs that the spring flush of cattle might be coming to an end. Figure 3 shows east coast slaughter declining for the second week in a row. The trajectory has slaughter numbers hitting last year’s levels for the first time since April, and it hasn’t happened many times this year.
While the EYCI is sitting 11% behind the same time last year, heavy steers remain strong, they are 9.5% above the level of 2017. Expensive grain and a lack of grass is making processors pay up for the finished product.
Interestingly heavy young cattle, the type which are heavy enough for the feedlot, are still at a premium to the same time last year. This is a good indication of how hard it has been to get weight into cattle on grass.
What does it mean/next week?
With no real rain on the forecast we could head in to the Christmas break with young cattle prices on the slide. It is a sure thing that the market will move in January, but which way depends on the weather. A dry end to December will mean prices open lower, while a wet break will see a stronger opening and will be a boon for the weaner sales.