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Cattle prices well supported as volumes drop for summer

Recovery in feeder and fat cattle futures is supportive

Activity is slowing down for the summer at cattle yards across Manitoba, although values remain steady for the odds and ends still finding their way to market.

A number of cattle yards are already operating at a reduced summer schedule, with sales on a biweekly basis before a complete shutdown in July. Volumes were light at the yards that did hold sales, with only a few hundred head on offer at any given location.

Lower volumes helped keep prices well supported for what was still moving through the rings, with values generally steady or even up a bit on some classes compared to the previous week.

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“Our volumes are starting to drop… as guys get their animals ready to go to grass if they’re not there yet,” said Robin Hill of Heartland Livestock Services at Virden.

With the smaller volumes, it is harder to get loads together for eastern orders, with most of the interest coming from local buyers and some from Alberta.

Hill thought many of the feeder cattle being sold now were likely originally set to move in the fall, but with conditions on the dry side some producers were deciding to sell now in order to save their pastures for cow-calf pairs.

While there was some much-needed rain in some areas during the week, many pastures are still in need of moisture, said Hill. Most producers got at least something in the latest band of showers, “but it could be at least double.”

On the butcher side, prices held steady, with much of the activity tied to cows that lost their calves now coming to market.

Feeder and fat cattle futures in the U.S. both recovered off of nearby lows over the course of the week, which was supportive for prices in Manitoba. Weakness in the Canadian dollar also provided some support.

The latest Cattle on Feed report from the U.S. Department of Agriculture was released May 25, showing 11.6 million head in U.S. feedlots with a capacity for 1,000 head or more as of May 1. That was up five per cent on the year, and the second-highest inventory at that point since records started 22 years earlier. New placements into feedlots in April, of 1.7 million head, were down eight per cent from the same month in 2017. The numbers were in line with market expectations and did little to move values.

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Phil Franz-Warkentin - MarketsFarm

Phil Franz-Warkentin writes for MarketsFarm specializing in grain and commodity market reporting.

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