Lambs contraction reaction

25-04-2020 by admin

Shipment challenges following widespread rain and production shortages has resulted in a lamb market jump with the ESTLI rising to a yearly high of 565c/kg cwt.LAMB supply concerns across the country have pushed processors to release enticing forward contracts up to 600 cents per kilogram in a bid to secure supply for next month.
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The Eastern States Trade Lamb Indicator (ESTLI) has been pushed to a yearly high of 565 cents per kilogram this week, following a dramatic 35c, or 6.6 per cent, rally last week.

This was attributed to the impact of widespread rain on stock deliveriesand the three per centyear-on-year fall in production.​

The heavy rain was behind Forbes’, NSW, dramatic absence of numbers last week when more than 20,000 sheep and lambs were withdrawn from the weekly sale due to logistical problems getting trucks to and from the yards.

“It was too wet to move trucks around last week and people were of the opinion the rain would be of benefit to the market – they were right,” Forbes Livestock Agency director Bill Dunn said.“The market on Tuesday was dearer by $8-10/head for heavy export lambs.”

The rain reaction was subdued in South Australia and Western Australia with trade lamb indicators at 494 and 484c/kg cwt respectively.

Major lamb buyers released forward contracts this week for June from 580-600c/kg cwt, while the average trade lamb over the hooks rate in NSW averaged520c/kg cwt, Victoria 550c/kg and SA 550c/kg.

Sheep prices followed the upward trend, with Victoria’s Mutton indicator recordingthe national high last week, at 359c/kg cwt, NSW at 346c/kg, SA 309c/kg and WA at 242c/kg.

Corcoran Parker livestock agent James Cleeland said supply had been impacted by a summer sell-off of lambs due to the dryspring and summer across southern Australia.

“With the forward contracts out at 600c/kg, it is safe money but we might find in June and July that the market is all of that and a bit more,”Mr Cleeland said.

“There is definitely less urgency to sell lambs now we have had the break which has given people more confidence.

“The reduced number of lambs at the moment is due to people sowing, a significant numberhas been sold early as light lambs and some producers have chosen to hold numbers following the rain.”

Elders Wagga livestock agent and auctioneer Joe Wilks said producers were well positioned due to thesupply shortage and seasonal break.

“I think the market has only way one way to go and that is up,” Mr Wilks said.

“Processors are throwing out good money for forward contracts because they can see the numbers will cut out.

“It’s in the farmers’ hands at present instead of the other way around.”

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