FEEDER cattle grids have jumped 10-20c in the past fortnight as rain across dry parts of the country brings optimism back to the market.

While grids have risen, there was a wide spread of prices given to Beef Central this morning as the rain impacted market finds a new level.

In the north, 400kg+ flatback feeder steers were quoted between 465-485c/kg – up 20c on the past fortnight. Angus steers were quoted between 525-530c/kg, up 5-10c.

Southern Angus prices are also on an upward trajectory, with quotes between 530-545c/kg for heavy feeder steers and British Cross steers between 500-510c/kg. The Angus market was moving up as this report was being compiled.

Rain across New South Wales and Queensland last week has largely been attributed to the increase in prices, with anywhere between 50-100mm falling.

More rain is forecast to come across Northern NSW in the coming days, with many producers in that area hoping that it might bring on a reduced fodder crop. Water is also an issue in the area and there will no doubt be many hoping that the rain can fill some dams.

(See last week’s episode of The Week in Beef for more insight into the situation in NSW)

Early sales reflecting increase in prices

Heavy feeder cattle prices have lifted significantly at saleyards this morning.

Tamworth prices increased have increased by 28c, with 106 heavy feeder steers averaging 501c/kg – that is a reduction of 66 head on last week’s yarding.

At Wagga, an offering of 417 heavy feeder steers averaged 532c/kg, which is up 21c on the week before.

National Livestock Reporting Service Wagga reporter Leann Dax said rain had reduced the yarding significantly.

“Feedlots were particularly active, seeking to acquire cattle with weight, which intensified competition across various weight classes and led to a surge in prices,” she said.

“A standout aspect of the sale was the heightened restocking activity, with buyers willing to pay up to 100c/kg more for lighter weight categories, reflecting their determination to secure stock on the day.”

Meat & Livestock Australia’s saleyard-based feeder steer indicator has also increased on the fortnight, closing today at 484c/kg – which is up 11c on last week. The heavy (400kg+) section of the indicator is up 13c to 495c/kg.

Angus prices could rise further

While the spread between Angus and crossbred prices has contracted in the past fortnight, there is a feeling that Angus prices are about to rally.

As more producers in Southern NSW manage to get an autumn break, there is a feeling that supply may tighten.

Forward contracts are another part, as processors and supply chain managers navigate China’s 55pc safeguard tariffs. Animals going through abattoirs in September/October are expected to get to China at the start of next year, when the tariff-free quota opens again – adding extra demand.

Forward contracts for 100-day grainfed cattle (not specifically Angus) have already lifted 10c between August and September, with last Tuesday’s Weekly Kill column told the September contract is 850c/kg carcase weight.

While Angus prices are expected to increase in the coming months as supply tightens, there is also an expectation that plenty of feeders will be available later this year. Large numbers of weaners that were sold out of the Northern NSW earlier this year onto paddocks in Southern NSW, Victoria, South Australia and up to Queensland. They’re likely to come online later this year as heavy feeders.

Increase in StoneX swaps participation

StoneX Australian meat and livestock manager Ripley Atkinson said participation in the forward contracting/risk management tool had increased in the past 10 days with the rain.

He said active sellers had put offers of 500c/kg into late this year, while buyers (feedlots) were bidding the market up to 480c/kg for the November contract – these rates represent the Queensland flatback feeder steer (<51% Bos Indicus content, 0-2 teeth) delivered to the Darling Downs.

“In line with the spot market rising, forward contracted prices have also lifted – reflecting an improvement in confidence from the sell side and for buyers, the need to manage additional marketplace competition amidst steady to tighter supply,” he said.