Store cattle prices have improved but Asian markets need more heat for a big kick

The Eastern States Young Cattle Indicator has lifted 26c/kg in the past month, but it has jumped around the 600c/kg mark since March with no clear direction.

Cattle prices have shown some improvement at southern store sales in the past week.

The Eastern States Young Cattle Indicator has lifted 26c/kg in the past month, to be tracking at 623c/kg yesterday.

But, the benchmark indicator has been oscillating around a 30c/kg band since March, seemingly without moving decisively up or down.

And while one key analyst believes there is good reason an almost 30 per cent lift could arrive in time for Christmas, another says improvement in demand from crucial importers would need to lift to give exporters solid confidence to bid up.

Rabobank senior proteins analyst Angus Gidley-Baird said nationally, cattle prices had tracked “sideways since March”.

Northern parts of Australia had recorded an increase in cow prices in the past week, which he attributed to a lift in US imported trim beef prices.

However, a significant gap remains between prices that US importers were prepared to pay and domestic cattle rates in that country.

Mr Gidley-Baird said Australian exporters still needed to see a lift in demand from soft key Asian markets – Japan, South Korea and China – before “we will see strong upside price signals”.

“We need to see more incentive there for exporters, who need to sell the whole carcass, not only grinding beef (which often went to the US),” Mr Gidley-Baird said.

Market analyst Tim McRae, a developer of the On the Box selling platform, predicts the EYCI will lift 30 per cent by the end of the year.

This is providing the forecast wet finish to winter and spring arrives, and a feed flush appears through 80 per cent of the key cattle regions in Australia; export demand remains and the Australian dollar also holds steady.

Based on those assumptions proving accurate Mr McRae expects the EYCI to exceed 800c/kg carcass weight in October or November and heavier cattle and cows will become tight on the back of a good spring, with a 35 per cent upside to prices in the final quarter of the year.

A lift in confidence was apparent at store sales in the past week with local buyers and feedlotters at Leongatha pushing weaner categories 20c/kg stronger.

At Bairnsdale, prices were up to $200 dearer, according to the National Livestock Reporting Service, with weaner Angus steers, 393kg, making $1550 or 394c/kg.