EYCI lifts 11c on rain, with more upward movement expected

Expectations are its effects will again be felt in increased demand once restockers have had time to assess what it will mean for feed on hand.

The Eastern Young Cattle Indicator has jumped 11 cents a kilogram carcase weight in the past week, to sit today at 565c; while the processor cow and heavy steer indicators have both lifted similar amounts.

Yearling steers, however, stayed in the red.

Meat & Livestock Australia senior market information analyst Ripley Atkinson said continued high supplies of yearling steers on-farm was negating the need for restocker buyers to compete in the market, which in turn was softening demand and therefore prices, despite tighter supply.

Last week, national yardings fell by 38 per cent, or 16,600 head, MLA data showed.

NSW slaughter volumes reach its highest level in more than three years. Nationally, slaughter is now on a level peg with the five-year average.

It is now very clear that the processor warnings that started as far back as last year about the need for more capacity to deal with the number of cattle likely to come online is playing out.

Those concerns, along with exactly what the forecast dryer season will deliver, continue to affect sentiment in the cattle game, agents and analysts say.

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Mecardo's Angus Brown said it was typical to see supply react first on the back of rain like what has just been received.

"Restocker demand takes a little longer to react, as buyers wait until the feed is on hand," he said.

"The recent downward trend will have plenty wary of jumping in, but it looks like we might be seeing the low."

Victorian agent Stephen Street, Elders Myrtleford, said it wasn't just producers with good feed on the horizon holding back stock that had affected supply - it was simply too wet in parts to shift stock around.

Some of those cattle numbers would flow through again soon. As well, quality at this time of the year would continue to affect prices, with most of the best runs now sold, he said.

Still, Mr Street and many other agents feel the market 'overcorrected' with its big dip since last December.

"It might just start to show a rise shortly," he said

"The parts of Queensland that were very dry have had a bit of rain now and that will lift demand.

"We haven't seen much of northern processor buying down here yet but that may come now and the extra competition will support prices."

On the other hand, Mr Street made the point that many were still reeling from the lofty prices paid for cattle last year and the year before.

"From January to now, the top black weaner steer calves have lost up to $800 - that's a big drop that someone has to absorb somewhere," he said.

"There are a lot of cattle still out there that cost $2400 a head as weaners, that still haven't gone anywhere.

"There are many balls in the air and lots of opinions as to what the market will do but it's fair to say the weather will play a big part as it always does."

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