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By Matt Dalgleish | Source: MLA, BOM, Mecardo.
The Eastern Young Cattle Indicator (EYCI) managed to eke out a limited gain this week, lifting 4.45¢ to close at 520¢/kg cwt. Limited rainfall across much of the nation, except Victoria, acted as a headwind. Meanwhile, tightening supply across the east coast stopped the market from tanking too much.
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National sale yard cattle indicators for the week were somewhat mixed, albeit within a narrow range with the opposing forces of limited rain and reduced supply keeping markets in a broad sideways pattern.
Yearling and Heavy Steers were marginally softer, coming in 1¢-5¢ lower across the nation. Vealer and Medium Steers, along with Medium Cow managed a little better with gains between 5¢-18¢ noted – Figure 1*. The National Vealer Steer indicator was given a significant boost this week by a large jump in WA Vealer Steer prices, up nearly 92¢ to close at 309.2¢/kg lwt.
It probably comes as no surprise given the rainfall pattern this week (Figure 2) but cattle prices in Victorian sale yards showed the most vigour across the states with gains between 8¢-23¢ noted for all reported categories, except Victorian Vealer Steers.
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Ad - Perpperton Poll Dorset & White Suffolk Stud at Elmore, Vic - Ad
Looking at the east coast slaughter trend in recent week we have seen levels begin to trend lower since the start of July – Figure 3. A few weeks back we were processing around 160,000 head a week across the east coast, currently we are running at around 150,000 head and its likely in a few weeks’ time numbers will ease toward the 140,000 head region. That’s if the market follows along roughly with the average seasonal trend (black dotted line on Figure 3).
* All cattle prices in Figure 1 are expressed in ¢/kg lwt terms
The week ahead
The rainfall forecast for the coming week shows a repeat of this week, with falls limited to Victoria, coastal SA and the south west tip of WA. Limited rainfall on the horizon and the prospect of a dry finish to winter and a dry start to spring won’t do a lot to get cattle prices moving aggressively higher.
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Ad - Perpperton Poll Dorset & White Suffolk Stud at Elmore, Vic - Ad
However, continued tight supplies and strong export prices and offshore demand will keep the market from crumbling. Seems like it’s a continuation of the sideways moves for the near term. If you are getting bored watching the sideways moves of the cattle market check out the 2004 comedy/drama Sideways over the weekend – its worth a laugh or two.
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