Processor and Feeder steers lift strongly, AUD falls.

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Author: Adrian Ladaniwskyj

The EYCI just keeps on hitting new records, and fortunately, the AUD is falling to provide support to our export markets, though the 90CL frozen cow price continues to weaken. Processor steers and feeder steers have also broken out of their ponderously glacial pattern of movement and put on the first decent one-week gains in months.

After the big mid-October ramp up, yardings showed signs of subsiding last week, down 5% on the week prior. Most of the change came from reduced offerings from NSW, down 22%, while in SA cattle were rushing the yards, with numbers up 50%, at almost 3000 head. Weekly yardings that high in SA have not been seen since March 2020 but are still below average for this time of year.

Overall, yardings fell by 2,170 head on the prior week which saw 44,245 cattle yarded on the east coast for the week ending 23rd  October; which is 23% below last year, but only 7% shy of the 5-year average.

Slaughter numbers lifted a paltry 1% last week, with all states showing stability. A total of 109,406 cattle were processed for the week ending the 23rd October; a level 29% down from the same time last year.

The EYCI just keeps hitting higher highs, and yes, you guessed it, yesterday another record was set, with an 18¢ lift (2%) bringing the close for the week to a hefty 819¢/kg cwt.

All green ink across the board for the categories this week, with the exception of the usual trend rebel; vealers; which fell a touch. Standout performers for the week were medium cows, and feeders, while heavy steers didn’t quite catch as much of the action. Way up North QLD, at Charters Towers, Jon Condon of Beef central reported stiff competition between JBS and live exporter SEALS who needed to fill a boat at short notice. The bidding duel resulted in 300 head of medium cows sold at an eyewatering 370¢/kg lwt, setting a saleyard record. This was clearly an aberrant result which is unlikely to be repeated.

Feeders and restockers climbed strongly, increasing 13¢ (3%) and 12¢ (2%) to end the week stronger; respectively at 413¢/kg lwt and 502¢/kg lwt. This is the biggest lift we have seen in these categories for a couple of months, as a glacial pace has been the norm for quite a while now.

Processor and Medium steers also followed suit, rising 11¢ (3%) and 11¢ (3%) to finish up at 427¢/kg lwt and 389¢/kg lwt. Heavy steers didn’t quite catch the wave this week, only putting on an extra 6¢ (2%) to get to 375¢/kg lwt for the week, but in this restocking oriented market, seeing the spread continue to widen against trade steers is not surprising. Vealers gave up 1¢ to settle at 437¢/kg lwt.

The Aussie dollar has fallen again by 1.5%, now down at .703US, in anticipation of a cash rate cut to 0.1% on Nov 3 by the RBA, and jitters from COVID-19 resurgence in Europe.  After seeing some signs of stability last week, and despite support from a falling dollar, the US 90CL frozen cow price sank by 4¢ (<1%) to settle the week at 621¢/kg swt. This is not unexpected though, as grilling season is over in the US, it’s the season that US cows begin to be culled, and, as Jamie-lee Oldfield pointed out in her article last week the 90CL is under siege from increasing US beef import volumes, so we can expect this key indicator to track lower in the coming weeks.

The week in cattle 30 Oct 2020
East coast cattle yardings
BOM weather chart

The week ahead

Overall, it’s looking a bit drier over the next week; croppers up in the North will be thankful for the respite from the rain so harvest can ramp up again. Down south in Eastern VIC and south western NSW between 10 and 50mm can be looked forward to. Another record EYCI and continued strong demand from restockers may encourage more sellers to come to market next week to take advantage of the excellent prices on offer.