WHILE the season and supply situation continue to play into the hands of those selling cattle, analysts are now starting to talk price realignment and a slightly bearish outlook.
The benchmark Eastern Young Cattle Indicator (EYCI) has jumped another 7 cents a kilogram carcase weight in the past week to sit at 775c/kg, which puts it very close to the 784c/kg record it set at the end of August.
It is travelling a solid 286c/kg above year-ago levels and has been sitting at or above the 750c/kg mark for much of this year.
Dry and windy conditions this week, particularly in Queensland but also in parts of Victoria which are on a knife's edge, may bite into the restocking fervour temporarily, and see a few more offered, but the bigger picture of La Nina conditions still bodes very strongly for the cattle market.
Mecardo analyst Adrian Ladaniwskyi said the EYCI could not stay at such a high level forever.
"At the moment, it is driven by restocking pressure but the Australian cattle market is out of sync with worldwide cattle prices and there is a lot of competition out there from South America and the US," he said.
"We are also coming into a worldwide depression caused by COVID-19.
"The ability of people to continue to pay high prices for beef will be limited, not to mention the spread between the prices processors have been receiving on the export front versus what they are paying for cattle; they are making losses at the moment and that can't continue forever."
The global scene was definitely the big unknown, agents said, however, they also pointed out warnings about decreasing international demand flowing back to the Australian cattle market had been out there for much of this year but restocker demand had continued to dominate.
Southern agents said the very good season in parts of Victoria, coupled with ongoing demand from NSW restockers with full paddocks and limited access to cattle, was pushing prices for young cattle at their yards beyond what even the EYCI indicated.
"Our store market has been well over that since early August; smaller cattle are now making in excess of 600c/kg," Bill Wyndham & Co auctioneer Colin Jones, Bairnsdale, said.
While East Gippsland was on a cusp and needed rain "immediately", buyers in other regions were snapping up cattle on offer, he said.
"Usually around this time of the year, fat cattle start coming out of NSW and the Victorian market takes a dip but with amount of cattle still going into NSW I think things are different this year," he said.
"If you believe La Nina talk, that will only continue but we don't excited about things until they happen."
Elders Ballarat livestock agent Marty Gleeson said feed growth would fire up as it got warmer, pumping even more demand into the market for the smaller pool of cattle available.
"While ever NSW is green, our market will stay strong," he said.
Fat cattle were also selling well, and were in short supply, making $2000-plus a head, he said.
That provided restockers and traders with incentive to pay the bigger prices.
A lot were going to Tasmania but Victorian processors were still active, he said.
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