Rain keeps cattle out of the market

Yardings this week were a fraction of what would otherwise be expected, as drenched paddocks and flooded roads prevented cattle from reaching saleyards.

MLA figures show numbers were down 4500 head on Monday and Tuesday, week-on-week.

Equally, the inability of buyers to get stock to where they needed them - whether it was back home or to the feedlot or abattoir - meant demand was reduced.

It was, however, strong enough to drive the Eastern Young Cattle Indicator upwards. It finished Tuesday's trading at 878 cents a kilogram carcase weight, up 25c on a week ago and 160c above the year-ago level.

Agents and analysts are hesitant to make big projections on what will come in the next fortnight.

Early feedback is that some producers who do have stock may look to get in early given the shorter trading weeks, spurred on by the early signs the market is shooting upwards on the back of rain.

Other agents, particularly those in Queensland regions that have really only just received the first decent falls, believe cattle will immediately be tightly held, and aggressively sought.

Wade Hartwig, Ray White Toowoomba, said rain in the Channel Country and western NSW always has a big impact on demand.

"It's pretty much rained everywhere so people are going to be looking to buy whatever is available," he said.

Southern Queensland yardings had been on a downward slide for the past few weeks anyway and with the rain causing transport issues, big saleyards were now back to a third of what would be considered normal for this time of year, he said,

"We are into weaner turn-off time now but I just don't know if there will be the weaners out there. A lot were sold early, two to three months ahead of what is normal and at lighter weights, due to the good prices," Mr Hartwig said.

"With prices at what they are now, you'd have to be brave to say it's going to get dearer but I can't see it getting cheaper. The strength in restocker demand isn't going away any time soon."

MLA market analyst Stuart Bull said some saleyards would now experience consecutive weeks off with public holidays, so that would likely play into decisions to be made by producers.

"While typically a change in supply does influence prices, we have had some time of prices levelling out this year, which is different to the situation this time last year when the market was only going to go up," he said.

In the south, the market has travelled steady to high for the past few days, with agents reporting rain on the radar further north prompted some vendors to hold on for another week and see what unfolded.

Mecardo analyst Angus Brown said even more tightening of supply in NSW may mean buyers are once again heading south chasing supply - a common situation over the past year but one that will certainly be amplified with northern rain.

Online, prices are already surging, with AuctionsPlus reporting the substantial rainfall totals through key supply regions in Queensland and NSW being felt across most categories.

All five steer categories jumped on AuctionsPlus last week, with an indicative line of weaned Hereford/Santa cross steers, averaging 183.4kg, from Boulia, Queensland, selling to $1,210/head.

Analysts have long said a lid will be maintained on the grass-fever driven demand by the lack of ability of processors to extract more at the end.

Data is now showing processor margins are expected to stay at record loss levels for most of this year.

NAB's Rural Commodities Wrap for March says the resilience in the domestic cattle market is now 'frankly well beyond fundamentals.'

NAB Agribusiness Economist, Phin Ziebell said if restocker activity slowed due to drier weather or a reassessment of future prices, there are some real downside risks for the market.

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