Dollar deals solid demand

After stabilising just above 360 cents a kilogram (carcase weight) for much of September the Eastern Young Cattle Indicator has risen to 364.25c/kg on Tuesday evening.

Much of the lift in the EYCI was driven by dearer markets on Monday at Forbes, Wagga Wagga, Toowoomba in Queensland and Pakenham in Victoria.

At Forbes there were more prime young cattle yarded than the week before and the market for those that fit the EYCI specifications were nearly 20c/kg dearer.

At Wagga, which on Monday contributed the most cattle to the EYCI calculation, the market was nearly 9c/kg dearer than last week and also averaged dearer than the indicator.

Market Information and National Livestock Reporting Service manager Ben Thomas said the buoyant EYCI has been assisted by patchy showers and fairly strong feeder and processor demand.

"In addition, the recent weakening of the Australian dollar will assist the price of our product in international trade, however, the impact is never seen immediately," Mr Thomas said.

He added that Australia had already been exporting record volumes of beef for more than 18 months now, driven by unprecedented slaughter numbers.

There's little sign of slaughter numbers decreasing in the short term.

"Higher prices are enticing producers to off-load whatever finished stock they have, but there are still quite a few store stock entering the market from drought regions," he said.

"Furthermore, with the Australian dollar recently easing, combined with some isolated showers, and likely maintained strong export demand, prices look to hold steady."

It's a similar story in the store market where although there were still plenty of plain cattle being offered the values have held up well.

Bowe and Lidbury agent Greg Lidbury, Maitland, said at the annual spring female sale at Maitland last Saturday there was certainly a dearer trend evident for the quality lines of young cattle.

"At the same time, some of the cattle were plainer in condition which is a reflection of the season where these lines had been running," Mr Lidbury said.

As a result the overall sale market trend was firm when compared to other recent sales in the district.

He said the better conditioned lines drew strong demand from the processors, while the plainer lines attracted strong restocker interest.

Western store sales have also recorded stable sale results propped up by solid local competition.

A.J.F. Brien and Sons livestock agent Peter O'Connor, Coonamble, said at the Coonamble store sale on Wednesday last week the quality and condition of the cattle was very good.

"The rain before the sale came at a good time for restockers," Mr O'Connor said.

As a result cows with calves sold to a top of $1110 for four- to five-year-old Hereford cows with calves.

Mecardo analyst Angus Brown raised a good point that it's remarkable to think that slaughter is still running 20,000 head a week higher than last year's record levels.

He said the only conclusion being that the herd is continuing to be liquidated as prices have risen.

"Export prices can fall 10 to 20 per cent and there would still be room for cattle prices to rise: even more so in young cattle markets," he predicted.

"Historically we haven't seen slaughter fall late in the year, with it usually occurring following the Christmas/new year break.

"This would be the target time for a rapid rise in cattle prices as the 'have to get them off before Christmas' cattle have gone.

"Moreover, it might have rained, which will obviously push prices strongly."