Recent rains in the south enough to lift confidence, and that’s all that matters.
Price outlook through winter is solid, supported by fundamentals, but dry conditions on major cattle regions are a market risk moving forwards.
StoneX Feeder Cattle Swap forward bids and offers remain stable out to the end of 2025.
Despite not being enough to be considered drought breaking rain, the recent falls in southern Australia have most certainly been enough to spark a lift in confidence. And that is all that matters, making the rain event enough to drive improved demand and in turn a rally in light cattle markets in the past fortnight.
This buying behaviour and subsequent market move reinforces the fact that confidence is and will continue to play a major role in price performance alongside supply and demand in determining prices for the Australian beef industry.
There’s an argument to be made that while the seasonal conditions remain favourable in the areas of the country that aren’t affected by drought, cattle prices will be supported. Evidence of this is the continued purchasing of light cattle by northern buyers out of southern markets, which although has slowed in recent weeks as cold weather closes in, is still very solid.
These winter months will bring processor cattle into focus once more, particularly if southern regions continue to receive further rain, shortening availability of any slaughter stock in the south even more.
Unsurprisingly the recent rains have supported light cattle prices in southern markets with producers opting to chase stock which consume less feed as their first point of call in buying demand.
In the north Queensland remains a big paddock, meaning these regions can handle large volumes of stock when conditions allow, like they do at present. These confidence and season driven dynamics are the foundation of a supportive outlook on pricing over winter.
The major factor which we may see later in 2025 is the change in seasonal conditions in northern Australia and subsequently availability of grass and water which could affect confidence, lift supply and pressure the market.
With a wet June forecast for large parts of Australia, opportunities on buying cattle remain plentiful and this situation poses the question, where is the opportunity in the market?
One must consider the potential of preparing future or existing breeding females in anticipation of a southern herd rebuild, particularly on lines and types suited to these regions.
A good example is a PTIC article, particularly younger cows or first calving heifers for a spring calf. With the option if southern demand doesn’t transpire to retain the weaner and sell the cow into what will be a relatively favourable processor market.
The markets always provide plenty to consider and when taking a longer-term view of the market, good opportunities continue to present themselves, particularly at present, in some stock types others might not be looking at.
The StoneX Australian Feeder Cattle Swap’s forward bids (buyers) and offers (sellers) remains relatively stable out to the end of 2025. Market activity and trades continue to rise as most activity and open interest sits within the June – October contracts.
Positions are now closing that were booked in early 2025, indicating the strategic utilisation of the swap as a risk management tool long in advance of where a physical forward price can provide surety for a producer.
Education and understanding about the concept of risk management remains the fundamental building block for cattle producers to better utilise tools as a legitimate way to manage their exposure to downside price risk.
Ripley Atkinson's experience in the red meat industry and current role at StoneX developing price risk management tools for Australia’s sheep and cattle sectors ensures he delivers unique, whole of supply chain insights and analysis across key factors such as prices, supply, production and the drivers of the sheep and cattle cycles.
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