THERE’S been a 20c/kg correction in forward contract 100-day grainfed cattle prices for delivery during the second half of June.

Several large Queensland export processors running 100-day programs have reduced their contracts for late June delivery from 700c/kg carcase weight to 680c/kg this week.

Supply may be partly responsible, with the latest quarterly grainfed industry survey showing record numbers of cattle on feed at the end of December, reaching close to 1.3 million head.

Flat trading conditions in some markets due to economic slow-downs, especially in China, has also kept a handbrake on beef demand, despite recent rises in grinding beef value into the US. One contact suggested there was little in the way of a processor margin with 100-day contracts at 700c/kg.

“Volume of export to the US has not grown as rapidly this year as some people had anticipated,” one trade source said. “Boxed cuts and trim are moving in export channels, but just not as rapidly as they thought it would be just a month or two ago – especially for cuts.”

“Japan took greater volume that the US last month, despite the strength of the Japanese Yen,” he said.

There have also been reports this week of grainfed cattle being pushed back in processor production schedules, due to technical on-plant issues.

Feeder prices ease 30-50c

Feeder cattle prices have also shown a sharp correction over the past month.

Heavy flatback feeders ex Downs are trading out of the paddock around 345-350c/kg liveweight this week, having hit 380c only a month ago, with isolated reports of as much as 400c/kg being paid in a few deals.

That means a paycheck anywhere from $135 to $250 leaner, per head, compared with feeders sold in late January or early February.

Weather had a lot to do with February feeder pricing, grainfed supply chain managers told Beef Central, with the heatwave conditions followed by widespread rain, shortening supply for a period.

In contrast, there was plenty of feeders now on the move axcross eastern Australia, as more country starts to dry out, and parts of southern Australia starts to get dry in a typical late-summer pattern.

The National Livestock Reporting Service’s saleyard Feeder Steer Indicator (feedlot buyers only, weights up to 600kg, 0-2 teeth) has also reflected the trend, falling from 355c/kg this time last month, to 333c this morning.

Angus heavy feeders are this week making anywhere from 365-380c/kg in the paddock, depending on location, Beef Central was told. That margin for black cattle over equivalent flatback feeders has opened up a little again, after struggling to get past 5-10c/kg for a period, due to lack of export quality beef demand.

“There’s plenty of black feeders available in the south, but they are still 20-25c/kg (freight cost) away from where most of them will be fed,” one livestock manager said.

“So even if they are being bought out of the paddock at 360c/kg in southern NSW or northern Victoria, they are still +380c/kg landed in a Downs or northern NSW feedlot.”

“But if the numbers of feeder cattle continue to come forward, it’s a supply and demand market. If availability exceeds what is needed, feeders will continue to come under pressure,” he said.

Feedgrain

Feedgrain prices have also softened over the past month, suggesting that depending on each yard’s grain position, impact will be seen in margins at some point.

“For those yards who are short and don’t have a grain position, they will be feeling it today, but for others the price relief will take longer to arrive,” one contact said.

“But ultimately, it will help all lotfeeders.”