Australia-Cattle slaughter.

AUSTRALIA-In a land of extremes, the heatwave across drought areas of southern Australia is currently having a much larger (negative) impact on cattle markets than the flooding rains covering 60pc of Queensland shires.

Consequently, cattle slaughter remains high for this time of the year, as southern producers are forced to offload due to feed and water shortages. Also, restocker demand is weak, as both southern and northern producers have little ability to take on stores at this time – with paddocks too dry or too wet. While the weather is influencing cattle prices at this time, MLA says the continued weak export demand is also affecting values - the beef trade disruption from the credit crisis, associated currency shifts and unprecedented uncertainty is causing buyers to run down stocks before re-entering the market. With only weak import buying from Korea and Russia, and many Australian producers forced to offload, buyers in Japan and the US are able to retain the benefit of the low $A for the time being. The key Eastern Young Cattle Indicator (EYCI) at the end of the week had fallen to its lowest since November 200, according to the MLA. It closed at 299c/kg - down 14c/kg on that of the previous week. It’s now more than 60c/kg below last year’s peak of 361c/kg, in October.