While cattle continue to perform strongly, the big story across the Flow family at the moment is the surge in canola prices. A good season in the southern hemisphere and major worries in the north augur well for canola growers.
The Australian dollar rose 2 per cent this week against the greenback, to 78c to the USD. It now stands at 20 per cent higher than it was at the same time year ago.
Cattle
Despite recent minor falls, the Eastern Young Cattle Indicator continues to climb on a longer-term trend, after 2019 that was relatively steady all year, spiking in early 2020 but continuing to track upwards ever since.
Meat and Livestock Australia reports:
"The quality of stock offered has continued to support the feeder market, while those after restocker cattle have also provided an excellent offering across all categories. The feedlot and restocker interest is fuelling prices, providing an excellent return and validating commitments that investing in high quality genetics and breeding programs will nurture stock through to point of sale.
"Quality stock have been well received across all categories including heifers, PTIC cows and cow and calf units that are highly valued to the restockers, while heavier yearlings provide an opportunity for the feeder market to purchase cattle ready for feedlot entry at younger ages."
Thursday's EYCI sat at 905.75c/kg, with rises for feeder steers (464.75c, up 0.5c on the last indicator, and 1.75c on last week), Medium cows (287.5c, +3c, +6c) and heavy steers (374c, +3.25c, 03.75c).
National slaughter numbers continue to climb, still short of the same position in the previous two years.
Victoria
Victoria leads the eastern seaboard in medium steer prices, at 422.8c (up 13c this week), not far behind WA (432.1c). Vealer steers rose 20.8c to 484.4c and remain the most improved on last year, up 142.4c.
Western Victoria's cattle prices were all inferior to central west and Gippsland prices.
Swan Hill traded 600 head on Thursday, up 200 on the previous week, but MLA states the lift was due to light calves coming in early as the season turns extremely dry in nearby districts.
On Wednesday, yardings at Warrnambool remained low and down on the week before, 617 head (-182) with quality reported as plain to average.
NSW
New South Wales leads the nation, on available data, in restocker yearling steer prices (583.9c) with southern NSW well ahead of other parts of the state with a 629.9c price compared with the Hunter (542c) and northern NSW (482.2c).
NSW also leads the eastern seaboard on vealer steer prices (525.5c, despite falling 13.2c this week - and prices fairly even across the whole state) and feeder yearling steer prices (469.7c, up 6.8c in NSW this week, southern NSW close to the highest prices across the state) with WA highest nationwide at 537.4c and 512c respectively.
Medium steer prices rose fastest this week, up 23.8c to 409c, with southern NSW prices (442c) second only to central west (459.3c).
On Monday, Wagga cattle sales rose slightly 100 head to 3,300 but MLA reported favourable sales conditions:
"Dry conditions and strong prices contributed to higher numbers. The limited availability of good domestic trade cattle meant processors had to up the ante to purchase stock. Secondary cattle were well supplied with a large percentage destined for feedlots. All the regular export and domestic buyers were in attendance. There were several northern and local restocking orders in place however buyers struggled to find adequate numbers of well-bred types."
SA
South Australian prices generally lag the other states, however, sales volumes have been very low of late, producing unreliable data. For instance, Mount Gambier numbers fell again on Wednesday, down 296 head to 397 with mixed quality yet again. On Tuesday, numbers rose 70 head to 420 at the Dublin SA Livestock exchange, with quality again fair to good.
Processor yearling steers rose 30c to 445.6c, but feeder yearling steers fell 52c to 383c.
Sheep
Australia's domestic sheep prices have been on a slow slide in recent weeks, but showed signs of life after a jump in yard volumes after the Easter break. Thursday's daily indicators for the eastern states have restocker lambs at 952c, up 1c on the last indicator, 23c on the week before and 9c on 4 weeks. Merino lambs also rose (765c, +8c, +15c, -4c) as did light lambs (852c, +3c, +9c, -3c).
However, trade lambs (804c), heavy lambs (775c) and mutton (639c) all continued their downward trajectory.
Nationwide, Queensland's lamb prices are well ahead of any other state, with the exception of restocker lambs where the south-eastern states have a strong advantage. Queensland light lamb prices jumped 124c, to 947c, this week.
Western Australian prices are inferior across all categories to the eastern states, suffering heavy falls in trade and heavy lamb categories.
National sheep slaughter numbers climbed above the same mark in 2020 this week, approaching the 2019 levels. Numbers tend to fall from here through to the middle of winter.
Lamb slaughter numbers also rose to 386,843 for the week ending 16 April, the strongest they have been at this time in the last two years. It was a rise that was also noticed at Thomas Elder Markets, with Matt Dalgleish noting Victoria led the charge in higher slaughter numbers and NSW levels also higher.
Victoria
Victorian prices are healthy across the board but only the strongest for merino lambs, at 786c and equal-highest for heavy lambs (778c) with NSW.
Horsham yardings fell sharply on Wednesday compared with the week before, down 6,834 to 10,600.
NSW
New South Wales has the best restocker lamb prices at 1,009c, led by southern NSW with 1,044c compared to northern NSW 1,040c and central west 932c.
NSW heavy lamb prices are close to Queensland's, at 778c (falling 18c this week and compared with Qld's price of 786c), the same rate as Victoria (778c).
Light lambs fell heaviest in NSW this week, down 49c to 844c.
On Thursday, Wagga trade remained strong at 44,200 head, with MLA reporting:
"Lamb numbers lifted with producers wanting to offload as dry conditions prevail. Trade weight lambs 21kg to 24kg were well supplied and quality was fair to very good. Extra heavy lambs 26kg to 30kg were quite mixed. Lambs over 30kg carcase weight were outstanding with buyers upping the ante for the heaviest portion. A full field of buyers were in attendance and all were operating. One major domestic processor was selective preferring shorter skin lambs showing plenty of shape and finish. Local restockers were operating at times, but feedlot demand kept restockers on the back foot."
Monday's sales at Corowa continued in healthy number but down 885 head to 11,915, with mixed quality and all weights and grades on offer.
SA
South Australia continues to record strong restocker lamb prices (970c, up 44c this week), behind NSW on 1,009c.
Merino Lamb prices fell 23c in SA to 745c.
Both Naracoorte (Tuesday) and Mount Gambier (Wednesday) yardings fell heavily on the week before, down 6919 head to 9633, and down 1,200 head to 663, respectively. MLA reports from the Naracoorte sales:
"Quality was mixed with something to suit all orders with less weight over the offering this week as the market ranged from firm to dearer in price."
Numbers were up however at Dublin's SA Livestock Exchange, rising 1,000 head to 15,000 with quality reported to be extremely mixed.
Wool
The Eastern Market Indicator at Australian Wool Exchange show prices are fairly steady, moving slightly upwards 6c to 1,291, buoyed by the south index (up 8c) offset by falls in the north (-6c) and west (-2c). The indicator continues its sluggish upward movement after turning from an 830c low in September 2020.
ABARES reports that wool prices remain 14 per cent lower than the previous year's indicator on the eastern market indicator, nonetheless better than the western indicator which, whilst higher than the east, is 21 per cent down on the previous year.
The latest available report from Elders shows a fluctuating sales week ending 16 April:
"A familiar pattern continued at the Australian wool auctions last week, with a large initial offering, a decrease in price leading to large withdrawals and more wools passed in, before a scramble for quantity kicked prices up on the last day. Initially the build-up in quantity after the one-week Easter recess saw around 54,000 bales would be offered. This was pruned back to an even 50,000 before the first bounce as it didn’t seem that buyers had suddenly found a heap of demand. After a pretty doughy start the pass in levels rose with up to 20% of the Fremantle wools heading this way. On Wednesday, the second selling day the currency increased quite sharply, just to add another factor into the mix and again buyers remained circumspect and tentative for everything except the superfine merino types."
Pigs
Pig slaughter numbers are at the highest they have been for two years, at 93,036 head for the week ending 16 April 2021.
Dairy
Global dairy trade prices remain strong on the ABARES data compiled on Wednesday, albeit steady on the previous week but skim milk powder 37 per cent higher than a year ago and whole milk 29 per cent higher than the same time last year.
Grains and Oilseeds
Andrew Whitelaw from Thomas Elder Markets reported on Friday morning:
"Overnight we have seen a humungous rally across all grains. To put how large this rally was into perspective. I fell out of my bed, when I was checking my phone."
Wheat
ABARES reports improved wheat prices on the world indicators, with wheat up 6 per cent to 284c US per tonne. Wheat prices on the APW1 delivered Melbourne continues its upward climb, still well short of 2020 prices which were trading at close to 360c at the same time the previous year.
NSW DPI reports that Australian wheat prices rose 1 per cent to $293 a tonne domestically, predicting another huge national crop after Tropical Cyclone Seroja dumped 20-40mm of rain on Western Australia's cropping areas. AWB told a similar story in their Tuesday update:
"Amazingly, our compatriots across the country in Western Australia are having no such troubles with topsoil moisture after Cyclone Seroja passed through the state early last week. The cyclone dropped 15-50mm across the state and was perfect timing for many farmers as they had either sown the seeds into dry paddocks or returned after the Cyclone had passed to sow the seeds into the newly available moisture."
Andrew Whitelaw at Thomas Elder Markets further observes:
Wheat conditions in the US are unfavourable, and in conjunction with flying corn, prices are pushing upwards. China is expected to import 28mmt of corn, a rise from previous estimates of 24mmt and well above the normal <7mmt.
Barley
Barley prices are up 0.9 per cent on last week, to $220/tonne (feed) with reported tightness in road and rail logistics helping prices rise on the east coast.
At this rate, Barley is on track to sit higher than it did when the price crashed in May 2020, but still well short of the 350c prices barley was trading at before mid-April 2020 when the crash began.
Canola
ABARES reports that canola is up 2 per cent to 616c, up a strong 73 per cent on the prices a year ago, whereas NSW DPI say it is up 3.3 per cent to $621 per tonne, supported by strong international soybean prices and heavy frost in France affecting their crops at a critical time.
Regardless, canola prices continue to rocket past the same levels in 2020 in a bullish run compared to other grain and oilseed commodities.
Andrew Whitelaw at Thomas Elder Markets diagnosed the situation thusly:
On canola, things are really tight globally, which we have written about in recent articles. Canada has to import canola ahead of harvest to keep the crushers crushing. As similarly unusual as Australia importing wheat.
AWB attributes the price drivers to northern hemisphere conditions, while noting growing conditions will have a spring in canola growers' step:
Canola is a particular highlight this season, with pricing at historically high levels farmers are rotating their paddocks away from traditional early crops such as faba beans or oats, and into canola. The subsoil moisture the many farmers now have stored, thanks to the wet and cool summer we have experienced, also makes canola an attractive choice. Once established, the canola plant has a large taproot that can access moisture stored deep in the soil profile and this opens up this soil profile for future years. The challenge now is to establish the canola plant with variable topsoil moisture after rain in April has largely been missed in Central and Southern NSW.
And it’s not just the sowing conditions that are driving many farmers across the country to increase their canola plantings. The canola pricing for November/December delivery are historically high as countries in the Northern Hemisphere, particularly Canada, battle a severe drought.
This has sent the benchmark European November futures price soaring over 16% in the space of just three months. The price has climbed from $616 AUD in January to over $735 AUD today, a rise of almost $120/mt over the period.