The Eastern Young Cattle Indicator (EYCI) continued its record breaking run last week, finishing Thursday at 659.25¢/kg cwt, up 18.25¢/kg cwt from the previous week and 125¢/kg cwt above year-ago levels.
The recent rally, which started in early June, was underpinned by “above average” to “very much above average” rainfall across large swathes of Queensland, NSW and central Australia last month (BOM). In addition, the BOM have a wetter than average three month forecast for much of the country.
In particular, the recent rain fuelled confidence amongst restockers has led the price charge. Of the EYCI eligible cattle last week, restockers purchased 39% of them and paid, on average, 675¢/kg cwt (or a 16¢/kg cwt premium to the EYCI). In comparison:
- Feedlots purchased 41% of the total and paid 661¢/kg cwt (2¢/kg cwt premium)
- Processors purchased 20% of the total and paid 624¢/kg cwt (35¢/kg cwt discount)
It should be noted that many EYCI eligible cattle are in store condition, and not suitable for slaughter, and processors source the majority of cattle direct from producers and feedlots (processor purchase of the EYCI last week were just shy of 3,000 head while the eastern states slaughter was almost 127,000 head).
http://www.mla.com.au/Prices-markets/Market-news/Restockers-leading-EYCI-charge-04072016
