Moving into the summer, Manitoba’s ranchers are watching cash markets and the weather, with both delivering good news.
Cattle futures at the Chicago Mercantile Exchange (CME) saw some turbulence over the past week, though prices for cattle at auctions in Manitoba were able to resist that pressure.
“The cash market didn’t seem to reflect it,” said Allan Munroe of Killarney Auction Mart.
Rain improved ranchers’ optimism about the cattle feeding situation this summer, which was supportive for the market, he said.
“Guys were concerned about the pastures, they were dry. They were very concerned about what was going to happen,” he said.
“But we’ve had a lot of rain, pastures got that drink they needed, so there’s a little bit of optimism and local guys interested.”
Most areas across Manitoba received beneficial rains on the week, supporting crop conditions.
Prices also drew out some sales that would have otherwise been held over until September, Munroe said.
Those stronger cash prices also lent themselves to increased volumes, as did earlier concern about pasture conditions.
“Our last couple of sales were probably double what we would expect in the end of May and mid-June,” he said.
The Killarney market had 370 head at its sale on June 12, the last sale until the fall run in September.
Though cash prices in Manitoba were divergent from movement in the futures, many ranchers are still keeping an eye on fluctuation in that market.
CME cattle futures often move into a weather-based market into the summer, taking on a level of volatility, Munroe said.
“Everyone guesses how the corn and stuff in the States is going to be,” he said. “It can change quickly based on what happens, or the forecast in Iowa.”
In terms of the prices Canadians are paying for beef, a new report from Dalhousie University says those prices are expected to edge up.
This year, meat prices are expected to increase between seven and nine per cent, the university’s semi-annual Food Price Report said.
Low inventories of cattle and hogs are expected to be partially responsible for the increase.
Through the summer, ranchers will be watching feed grain prices, trade movement and the Canadian dollar.
Currently, feed grain prices in Western Canada are slightly higher, as spring-threshed grain did not weigh on inventories as much as previously thought.
Trade groups are also watching the anticipated renegotiation of the North American Free Trade Agreement (NAFTA).
The Canadian dollar recovered from its earlier lows in the week ending June 16, which has the potential to curb demand from the U.S.