FEEDER cattle prices across the board have softened in the past fortnight, with seasonal uncertainty starting to build across large parts of the Eastern Seaboard.

Angus cattle on feed at Teys Jindalee feedlot

Clear market signals for feeder cattle are really only starting to emerge this week, with previous weeks seeing disruptions from floods in the north and the heatwave in the south.

Most yards are now saying they are booked forward for most of February, with the seasonal turnoff in the south delivering more cattle than what was expected.

Feedlot buyers who spoke to Beef Central this morning were quoting +400kg flatback feeder steers on the Darling Downs between 475-495c/kg – about 20c less than the last feeder market report.

Southern Angus prices have taken a 20-30c hit in the past fortnight, with feeder steers this morning quoted between 470-490c/kg. One Angus quote in the north was given at 490c/kg, with the buyer saying he was unsure if that might be too high. One large Angus lotfeeder was issuing no quote.

Southern crossbred steers (no indicus) were being quoted about 460c/kg.

Tale of two seasons

While a strong season is emerging in North and Central Queensland after some big floods in recent times, there is some concern about Southern Qld and New South Wales.

A large backgrounder who spoke to Beef Central this morning pointed out that if you a draw a line between Rockhampton and Tambo, areas to the south of that line are starting to need some rain after hot weather in recent weeks.

It must be mentioned that the traditional wet season for that area still has at least two months to play out.

Further south, in areas of Central NSW there is concern about a lack of surface water, which has been pushing cattle to market.

There is a feeling that some good rain in either of these areas will completely change the market dynamics.

The heatwave and public holiday reduced numbers at saleyards last week, however, there has been some big yardings at Wagga, Dubbo, Roma and Dalby in recent weeks. Roma has another 7000 on the draw for tomorrow.

Two operators on the Darling Downs who spoke to Beef Central this morning said they were sourcing most of their cattle from further south. One said they could source a softer animal for good value, even when freight costs are added on.

Differing strategies with China

China’s increased tariff on beef imports is still causing some uncertainty in the feeder market, with feedlot operators taking different strategies.

Several mid-fed Angus programs have been ditched as a result of the decision and many have dropped their premiums for HGP-free cattle.

One large Qld operator was still offering a premium for HGP-free cattle to keep the options open if the China market opened up again.

Another southern operator said the troubles with the China market had driven a lot of lotfeeders to pursue EU-accredited cattle, in a bid to find premium markets in both the EU and UK.

Forward contracts firm to softer

Bids and offers on forward contracts under the StoneX Australian Feeder Cattle Swap tool are showing a slight softer trend than the current market.

Feeder cattle swaps for March and April have been locked in at 480c/kg and one for February has been locked in at 490c.

StoneX Australian meats and livestock manager Ripley Atkinson said there had plenty of participation to start the year.

“Open Interest continues to steadily build, particularly in the front month contracts (<4 months from today),” Mr Atkinson said.

“On price movements, stronger supply has continued to limit upside, but the general market consensus is that it is only one rain event away from a strong rally.”