EYCI rises as forecast improves and restockers come out to play

The Eastern Young Cattle Indicator, which has jumped 60 cents a kilogram carcase weight in the past month to rise back above the 400c mark, has made a rare appearance in mainstream media.

The rally has been welcomed by enthusiastic agents and industry leaders as a tentative sign that some much-needed producer optimism was returning.

Analysts generally believe there is now more potential for prices to improve than start plummeting again.

Rural Bank's November Insights say cattle prices will likely remain stable through the next month.

The uplift in demand has also met with reduced supply to help the market along.

Most of the key saleyards are seeing smaller numbers on offer, with Meat & Livestock Australia reporting national yardings fell by close to 7000 head last week to sit at the lowest figure in five weeks.

In Queensland, this was largely due to much a smaller yarding at Roma and the absence of Charters Towers. In Victoria, the Melbourne Cup public holiday meant that several usual sales did not run.

MLA analyst Tim Jackson reported restocker heifers have led the way and price increases have been strongest in Queensland, with some categories lifting by as much as 200c/kg liveweight on the back of rain.

Dalby agent Richard Bumstead, Gilliland Livestock Marketing, said there was noticeably more positive sentiment about, courtesy of the better weather outlook.

Not only does the next fortnight have a very high chance of above-average rainfall for many cattle-producing regions but the outlook from December to February has also improved to be within the realms of normal for many areas, rather than 20 per cent or less chance of average rain.

"The rain so far has been patchy but it's definitely delivered optimism," Mr Bumstead said.

"As the market has kicked, people have started to think if they don't buy now, they might not get them."

In the south where seasonal conditions have been quite good, there have been other factors at play in pushing the market up.

Victorian cattle fattener Wayne Osborne, South Gippsland, said bigger lines, of up to 100 head of consistent, better-quality cattle, had created more competition among buyers who were chasing just that.

"A lot of producers have now reached a point in the production cycle where they need to sell," he said.

"Some had been sitting on those cattle for a bit longer than usual because the market was so low.

"At the same time, buyers are putting a weathered eye to what the kill price will be and the overall tone is no one is saying that will collapse much further. So buyers are getting a bit more confident in their margins and wanting to restock."

Still, the EYCI remains more than 600c/kg below where it was this time last year.

Mr Osborne records prices at saleyards in his region of Angus, black baldies, Hereford, Red Angus and Shorthorn offerings.

At Leongatha, from the end of October until last Friday there has been a $50 to $70 a head average increase across all weight ranges. Year-on-year, prices are still down 50 to 60 per cent.

That percentage decrease had been the story for most of this year and was repeated at other saleyards, he said.

Consultants say most producers are still conscious of a hot, dry summer ahead and the rain so far has not altered many intentions around feeding.

In northern NSW, for example, thousands of early-weaned calves are being fed but there are nowhere near as many feeding breeders as there were in the last drought.

The pain of that experience was still raw and, combined with the severity of this crash, has meant they will likely stay on the conservative side in terms of restocking for the remainder of this dry spell.

Some of those producers say they have now sold between 200 and 300 cows.

Some agents also said it would take a lot more than this early rain to bring the majority of restockers back in a significant way, given the lack of confidence that had set in.