The cattle market has rallied and there's talk of rain on the horizon, but producer sentiment is cautiously optimistic at best.
As of Tuesday, the Eastern Young Cattle Indicator was sitting at 428c/kg cwt, representing a 60-cent uptick since the start of the month.
It's also a 23% improvement from the low of 349c/kg cwt seen in mid October, in what could be the much-touted bottom of the market for 2023.
Analysts expect prices will remain relatively stable in coming weeks, and agents have reported a better vibe within the market on the back of the upward movement.
TopX principal Cyril Close said producers aren't getting too animated about it though, nor are they holding their breath over the Bureau of Meteorology's revised rainfall outlook, which forecasts more favourable conditions in December and January.
"When it starts running down the gullies, we’ll start getting a bit animated, but in the meantime I think caution is still a big part of what everyone’s doing," Mr Close said.
Many northern producers are still waiting for the season to break, with only patchy pockets of grass-growing rain being seen in recent weeks.
Those who have been lucky enough to get under decent totals have re-entered the market, with Mr Close saying there was an influx of graziers at Roma this week, the likes of which haven't been seen for several months.
"Some of those have obviously had substantial rain, like two and three inches; it’s the right time of year and it has started to grow a bit of feed," he said.
"The general players were there, but they were getting outmuscled by the producers that were trying to get in before the job does rise much more, if it happens to continue raining.
"They know they’re taking a risk and a big punt, though."
It's a different story in the south, where the season has been 'fantastic'.
Nutrien south-east region livestock lead Adam Mountjoy said it's hard to complain about how the season panned out in southern Australia this year.
"The Victorian season has been excellent for a start, and you’d say 70% of SA is in a buoyant position this season," Mr Mountjoy said.
"Tasmania has been split – the south of the state has been fairly tough this year, however they’ve had a kind winter in the north."
Despite a widespread 'drought in confidence' through the early part of spring, driven by how quickly the market had turned, Mr Mountjoy said he was becoming more confident by the day that cattle prices were looking to rebound.
"One thing that will hold us in good stead is we'll be selling plenty of good weight," he said.
"On the back of good seasons, we’ve been able to put on some cheap kilos and we’ll be selling some heavy cattle from now, right through until the upcoming weaner selling season in 2024."
How the weaner selling season plays out will be dependent on rain in the north, Mr Mountjoy said, but there was already evidence of confidence amongst southern buyers.
"There’s certainly restocker activity now as we get to a more acceptable feeder price, with the ability to change over some feeder cattle now through until the Christmas period and be able to restock with some young weaner cattle at some pretty attractive returns."
Restocker yearling steer to heifer premium record broken again
Last month, the restocker yearling steer to heifer premium reached the highest level on record at 44%.
While restocker yearling steers usually run at a premium to heifers, it's the size of the premium that serves as a barometer of market conditions.
Meat & Livestock Australia global supply analyst Tim Jackson said as cattle prices stabilise, the premium will be a useful tool to gauge market sentiment.
"Historically, the premium ranges from 9% to 22% roughly 70% of the time, and usually only exits that range for short periods of time," Mr Jackson said.
"The premium has now been above the 22% ‘normal’ limit for the past eight months, since March 2023. This is the longest period the premium has been outside the normal range on record."
Mr Jackson said the rapid, sustained increase in the restocker yearling steer to heifer premium was very unusual and suggested confidence in the market was low.
"Additionally, the speed of the increase suggests that the outlook among participants shifted much faster than in previous cycles," he said.
"Over the past several weeks, cattle prices have stabilised, sitting close to or above month-ago levels. While still down substantially from year-ago levels, this ends the pattern of consistently dropping prices that occurred this year."
Ultimately, weather is the main determinant of cattle prices, but other factors can influence the outlook in the market, Mr Jackson said.
"With more stable cattle prices and continued improvements in weekly slaughter numbers, the restocker yearling steer to heifer premium will be a useful tool over the coming months to determine if market confidence is improving."