Coronavirus ends hopes for positive year for markets

Top importer China among the hardest hit, dampening demand

As 2020 began there was a lot of positive sentiment, with hopes that the year was going to be a good one for the cattle industry, said Brian Perillat, manager and senior analyst with CanFax. However, that has been changing with the COVID-19 coronavirus outbreak, as cattle auctions are not immune to what’s happening on the world stage.

“Futures markets have been off. Fed cattle and feedlot prices have been coming down and are under pressure,” Perillat commented, noting that some feedlots are likely losing money.

“Right now there’s a lot of cautious and negative sentiment in the market. Whether it’s panic or real is kind of the issue,” he added.

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With China being a top importer, and hardest hit by COVID-19, that will reach back to hurt cattle prices in Canada, Perillat said.

However, not everything has hit the doldrums, as smaller calves have been holding strong. It’s the larger cattle that have been hit the hardest with the recent downturn, he pointed out.

Also, a weaker Canadian dollar will help to cushion the blow, he noted. After holding steady for about a week, the loonie slipped under 75 U.S. cents, which will make cattle exports more attractive.

Kirk Kiesman, auctioneer at the Ashern Auction Mart, echoed Perillat’s outlook.

“It’s kind of made everything that’s short term a little under pressure. Anything that’s long term has been selling a lot better than we thought it would be,” Kiesman stated, noting there are producers willing to gamble that the markets will turn around.

There were still good volumes at Manitoba’s auction houses, with Ashern, Brandon, Killarney and Winnipeg each reporting in excess 1,000 head. Several prices for feeders saw ranges increase by $1 for the lows and the highs.

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Glen Hallick - MarketsFarm

Glen Hallick writes for MarketsFarm specializing in grain and commodity market reporting. He previously reported for Postmedia newspapers in southern Manitoba and the province’s Interlake region.

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