AN easing of young cattle prices over the past week looks to be driven by increased supply but analysts and agents are insisting it's too early to call the start of the much-touted downward run.
Still, it is a shift from the resilience the market has shown for most of the year when prices have held, or even increased, against a backdrop of larger yardings.
The Eastern Young Cattle Indicator has dipped 33.34 cents a kilogram carcase weight in the past week to sit today at 1084c.
Last week, numbers on offer within the indicator lifted by 2300 head, much of that in key Queensland yards Roma and Dalby.
Mecardo analyst Adrian Ladaniwskyj said indications were supply was increasing, but it was still at historically low levels.
"There has been a lot of wet weather over the past few weeks which could be creating logistical challenges and dampening enthusiasm to bring cattle onto properties," he said.
While forecasts are for the EYCI to drop back to the mid 900 range by the end of December, Mr Ladaniwskyj said that decline would likely come in earnest further into the year.
"In northern and central Queensland, forecasts are for above average rain and temperatures for the rest of winter - that could translate into above-average pasture conditions and be enough to provide additional confidence for producers, which in turn will keep prices high," he said.
Across the board, the national cattle indicators were a sea of red ink last week, with restocker steer prices pegging a 5.3 per cent price decrease, Mr Ladaniwkyj reported.
With weaner prices still very much in record territory, but feeders showing distinct signs of weakening, producers are raising questions around whether steers and heifers which have been weaned recently should be sold now or grown out.
Fellow Mecardo analyst Angus Brown said feeder upside was limited, without an increase in beef exports prices or a fall in grain prices.
Mecardo's expected spring feeder value is 500c/kg live weight.
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Victorian agent Peter Stevenson, AWN at Shepparton, said demand was starting to wane for secondary cattle in lighter condition but big money was still being paid for the better article.
"There is not the scramble for everything that was there this time last year," he said.
"We are reasonably safe with prices holding on the finished product through winter but come spring, I think the whole job might come off a bit."
Supply was still very limited in the south, he said.
That was due to a combination of people selling earlier on account of the record market but also traders stepping out of the game, Mr Stevenson said.
"A lot of traders in this area have not wanted to enter the market at such high weaner rates so they've shifted to share cropping instead - a lot of hay was made last spring, for example," he said.
"While that has taken some buyer competition out of the young cattle market, it is also reducing supply of backgrounded cattle."
Strong demand fundamentals
Despite the plethora of challenges abattoir bosses are facing, the sole positive performer on the cattle market last week was processor steer prices, which went up 5pc.
Mr Ladaniwskyj said demand on the global market was holding strong.
Moving forward, good support would come out of United States and the growing middle class in Asia, he said.
"Once the US hits their rebuild cycle, it will likely coincide with when our conditions turn more to average and that 90CL product to the US is one of our largest export markets," he said.
Most beef co-product prices in Meat & Livestock Australia's June report were also up, however where there were dips, they tended to be heavier than the lifts.
For example, head meat averaged $6.37/kg which was 97c/kg higher year-on-year but heart prices were down from last month, averaging $2.54/kg, to be $1.41 below year-ago levels.
Rendered products remained firm while tallow prices were very strong based on biofuel demand from Singapore and the US, coupled with reduced production.
The hide market eased further with orders difficult to finalise whilst shipping and energy costs continue to rise. Market recovery is expected to take quite some time with high stock levels of raw material on hand.
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