ANY kick in the cattle market on the back of the weekend rain is expected to be modest at best, however there could be some tightening of supply in the short term as a result.
That’s the belief of analysts and stock agents in the wake of falls of between 10 and 60mm across some key cattle growing regions in NSW and Queensland.
The rain wasn’t widespread, definitely not enough and given cool temperatures, feed won’t grow in a hurry.
However, it could quell the big downside risk of retaining spring calves at least for a short while longer, Rabobank’s Angus Gidley-Baird said.
As producers, particularly in NSW, wait to see if the event will be followed up, supply might tighten somewhat but the amount of cattle around to hold onto was limited in any case, he said.
The Eastern Young Cattle Indicator jumped 10 cents a kilogram carcase weight at the end of last week on the rain forecast, then another 10c early this week to sit at 477c/kg tonight.
Analysts believe 500c/kg would be the limit, without substantial further rain.
The Commonwealth Bank’s Tobin Gorey said even another similar rain event in the next week would not constitute a break and would not be enough “to get people over the threshold of switching from destocking to restocking.”
Agents in NSW are reporting solid numbers of young cattle are going to south west Victoria and south eastern South Australia, where seasons have been relatively good.
Peter McConachy, livestock sales manager at Charles Stewart in Colac, said rain since June in his area had been good, following a very dry December to May, and feed had come away.
Sheep and cattle producers were buying stock from the Riverina and as far as Coonamble.
“Sheep are being bought in-lamb to increase our numbers and on the cattle job, it’s six to eight month old, 200 to 250 kilogram calves which we’ll look to fatten through to bullocks,” he said.
Southern NSW stock was also being sent south on agistment in some cases, he said.
There was a limit to what those southern regions could take, however, and it was foremost on people’s minds that “our season could finish up quickly down here too and hay that was $140/tonne in February is now $300/t,” Mr McConachy said.
Mecardo’s Angus Brown agreed there were only so many cattle that could be soaked up by wet parts of Victoria and SA but said they would offer some demand for the next month or so if it kept raining.
Mr Brown said the weaker Australian dollar had given export prices a boost and finished cattle markets had maintained their ground at a solid premium to store cattle prices.