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Down Demand, Drought, Dollar Undermine Markets

DWAYNE KLASSEN RNI

Ca t t l e prices at the auction marts in Manitoba generally lost ground during the week ended June 5. The upsurge in the value of the Canadian dollar was blamed for the pullback in prices, with demand from the packers also beginning to slow.

Dryness concerns in Western Canada, the growing cost of feed and concerns about the lack of pasture availability were also factors tied to the weaker values.

A few auction yards were closed this week with a number of other marts scheduled to begin seasonal summer shutdowns during the first or second week of July and then reopen sometime in the middle to end of August.

“The dry conditions and the increased cost of feed did little to help the cattle markets this week, Gene Parks of Pipestone Livestock Sales said. “Adding to the downward pressure on cattle prices was the push by the Canadian dollar to the US92-cent level this week for at least a day or two.”

Parks expected the strong Canadian dollar to be an undermining price influence in the cattle markets in the immediate term.

The strong Canadian dollar was particularly believed to have been hard on butcher cattle prices, with the value of cows also dropping significantly, said Jim MacArthur, general manager of Heartland Livestock Services at Virden.

“The price for cows was easily down C$3 per hundredweight this week,” he said.

MacArthur agreed that the dollar played a huge role in the price declines this week, but the declining economy was also an undermining factor in the weaker bids.

“Essentially, the packers are indicating that they are having trouble moving the meat, which is backing up demand for the cattle to some degree,” MacArthur said.

The interest in buying cattle came from the normal outlets, he said, but at a slightly reduced level as a result.

The demand from U. S. outlets was steady, but interest from buyers in the West and East was down, MacArthur said.

George Davis, chief technical currency analyst for RBC Capital Markets in Toronto, said the Canadian dollar was expected to undergo some further easing over the next month or so before resuming a firming trend.

“The Canadian dollar is in need of undergoing a downward correction and with that the currency could move back to the US88-cent level in the next one to three months,” Davis forecast.

There was a chance the Canadian dollar could drop as far as US86.5 to 87 cents during the summer months, he said, but that would depend on North American equity markets also undergoing a downward correction.

However, Davis cautioned that once the corrective phase has been played out, the Canadian dollar is expected to resume its strengthening trend, and possibly make a push back to the US92.5-and possibly 93-cent level in the three-to six-month outlook.

FROM THE AUCTION FLOORS

Note: All prices in Canadian dollars per hundredweight (cwt.). These prices also generally represent the top one-third of sales reported by the auction yard.

Ashern Livestock Mart: No auction was held this week.

Gladstone Auction Mart: No information was available.

Grunthal Livestock Auction Mart: There were 81 slaughter cattle and 266 feeders sold at the Grunthal yard on June 3. In the slaughter market, age-verified cows brought $44-$48, while mature cows traded from $39 to $43. Ageverified bulls brought $50-$57.50.

Feeder heifers weighing 600 to 700 lbs. sold from $82 to $103; 500-600 lbs., $85-$102; and 400-500 lbs., $85-$99.

Feeder steers weighing 900-1,000 lbs. sold from $73 to $79.50; 800-900 lbs., $80-$86; 700-800 lbs., $86-$94; 600-700 lbs., $90-$104.50; 500-600 lbs., $93-$117; and 400-500 lbs., $93-$110.

Heartland Livestock Services, Brandon: A total of 755 cattle were on offer in Brandon on June 2.

A1-A2 steers went for $82 to $85 and A1-A2 heifers, $80-$83. D1-D2 cows went for $44-$52.50; feeder cows, $35-$43; shells, $20-$34; and good bulls, $56-$64.

Feeder steers weighing 900-1,000 lbs. went for $86-$92; 800-900 lbs., $92-$100; 700-800 lbs., $96-$107.50; 600-700 lbs., $98-$115; 500-600 lbs., $97-$115; 400-500 lbs., $95-$113.50; and 300-400 lbs., $98-$111.

Feeder heifers weighing 800-900 lbs. sold for $88-$95; 700-800 lbs. , $90-$97.25; 600-700 lbs., $95-$106; 500-600 lbs., $96-$109; 400-500 lbs., $95-$109; and 300-400 lbs., $90-$104.

Heartland Livestock Services, Virden: There were about 427 cattle sold at the sale held on June 3. Butcher steers brought $80-$84 while butcher heifers sold from $79 to $83.50. Age-verified young cows sold for $49 to $55; D1-D2 cows, $46-$51; D3 cows, $41-$46; shelly cows, $30-$40; and mature bulls, $59-$65.50.

Feeder steers weighing 900-1,000 lbs. brought $80-$88; 800-900 lbs., $87-$96; 700-800 lbs., $96-$107; 600-700 lbs., $100-$111; 500-600 lbs., $103-$116; and 400-500 lbs., $105-$122.

Feeder heifers weighing 900-1,000 lbs. traded from $75 to $85; 800-900 lbs., $83-$91.50; 700-800 lbs., $85-$96; 600-700 lbs., $90-$102; 500-600 lbs., $97-$108; and 400-500 lbs., $98-$108.

Pipestone Livestock Sales: There were 330 cattle sold at the sale held on June 1. Included in the sale were 193 slaughter animals and 137 feeders.

In the slaughter market, D1 cows brought $45-$53; D2, $34-$42; D3 cows, $20-$31; and bulls, $64-$68.

Feeder steers weighing 800-900 lbs. fetched $88-$100; 700-800 lbs., $90-$114; 600-700 lbs., $92-$116.50; 500-600 lbs., $97-$121.50; and 400-500 lbs., $100-$123.

Feeder heifers weighing 800-900 lbs. brought $76-$94; 700-800 lbs., $79-$103.50; 600-700 lbs., $88-$109; 500-600 lbs., $89-$112.50; and 400-500 lbs., $104.50-$115.

Ste. Rose Auction Mart: A total of 310 cattle sold at the June 4 sale.

In the slaughter market, D1 and D2 cows ranged from $38 to $47.50, while D3 cows brought $28-$37 and bulls sold from $50 to $61.

Feeder steers weighing 700-800 lbs. traded from $102-$110; 600-700 lbs., $105-$117; 500-600 lbs., $94-$129; and 400-500 lbs., $90-$130.

Feeder heifers weighing 600-700 lbs. sold from $90 to $104; 500-600 lbs., $90-$104.50; and 400-500 lbs., $95-$113.

Taylor Auctions, Melita: The sale held on Thursday, June 4 resulted in 150 slaughter cattle and 92 feeders being sold.

In the slaughter market, A1-A2 steers over 1,000 lbs. traded at $80-$84; A1-A2 heifers over 850 lbs., $78-$81.50; D1 and D2 cows sold from $47 to $54; D3 and D5 cows, $35-$47; and good bulls $60-$68.

Feeder steers in the 900-to 1,000-lb. weight category ranged from $80 to $92; 800-900 lbs., $90-$102; 700-800 lbs., $100-$105; 600-700 lbs., $105-$110; 500-600 lbs., $105-$115; 400-500 lbs., $110-$118; and 300-400 lbs., $110-$120.

Feeder heifers weighing 800-900 lbs. fetched $80-$88; 700-800 lbs., $85-$90; 600-700 lbs., $90-$100; 500-600 lbs., $90-$105; 400-500 lbs., $95-$110; and 300-400 lbs., $100-$110.

Winnipeg Livestock Sales: There were 1,483 head of cattle sold at the sales during the week ended Friday, June 5.

In the slaughter market, dry fed cows brought $38-$48; good fleshed, $32-$38; lean, $24-$32; young age verified, $45-$56; and good bulls, $55-$64.

Feeder steers weighing 900-1,000 lbs. brought $85-$92; 800-900 lbs., $85-$92; 700-800 lbs., $90-$97; 600-700 lbs., $98-$106 and 500-600 lbs., $100-$116.

Heifers weighing 700-800 lbs. ranged from $82 to $88; 600-700 lbs., $90-$95.50; and 500-600 lbs., $95-$101.

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