What I am watching:

• The latest three-month rainfall outlook is encouraging but is largely centered on regions that are already wet.
• The potential of greater Chinese access will add to an already historically high export flow – when will we start to larger volumes and see positive price impacts?
• A packed schedule of spring bull sales will be fascinating to watch – especially given the frenzy of action has been in recent years.

The steady-as-she-goes cattle market:

• The Australian cattle and beef industry seems to have entered a period of steady-as-she-goes, with prices relatively stable and seasonal conditions balancing out nationally. The EYCI appears to have gotten very comfortable in and around 600c/kg cwt, with the usual southern processor interest for northern cattle kicking in. The supply of quality young cattle continues to be rewarded and lot feeder interest is robust. According to the “textbook” this is how the supply chain should work…its only taken 3-4 years to get back into rhythm!
• The latest three-month rainfall outlook points to a 60-75% chance of exceeding median falls through July – September, likely to kick off in the coming week with unseasonably heavy rain forecast through key inland NSW and Queensland regions. Hopefully some of the very dry areas (lowest on record for the first half the year for coastal eastern SA and western Victoria) in southern Australia have a wet finish to winter and set producers up for the spring.

Given we are halfway through 2024, and if this was a football game, the commentators would give predictions for how the second half plays out. So, without the bombarding of gambling adds, this is how I think the second half plays out under the following three assumptions:

1. As predicted, we get a wet finish to winter & spring feed explodes through 80% of the key cattle regions.
2. Export demand maintains its robust pace, with more buyers entering the market.
3. Australian dollar stays in the high 60’s, with no major trade impediments into key markets.

Prediction 1 - The EYCI will exceed 800c at some stage in October or November – that’s over 30% on where we are right now and well above 2023 levels.

Prediction 2 - Heavy cattle and cows will become tight on the back of a good spring, with a 35% upside to prices in the final quarter of the year.

Prediction 3 - Herd expansion intentions will be considered by some producers into 2025, but taking care of debts will be a screaming priority.