Activity was mixed at Manitoba’s cattle auction yards during the week ended Jan. 23, with Ag Days in Brandon likely limiting some of the action on the western side of the province as producers took in the show.
Numbers in the west were expected to pick up the following week, while steady trade was anticipated across the rest of the province.
Looking at what did move during the week, “grass cattle are very strong,” Rick Wright of Heartland Order Buying said, adding that anything 700 lbs. or lighter was seeing better prices from December. “The heifers have picked up about 10 to 15 cents/lb. since the Christmas break.”
However, he described the market as “very weight and flesh sensitive,” with 750- to 850-lb. animals seeing a little bit of weakness due to volatility on the slaughter side and expectations that supply will outstrip demand when those animals are ready to move to slaughter.
Meanwhile, the bigger cattle (900 lbs. and up) that will be killed before the end of June are looking strong with aggressive demand, he said.
A drop in the futures market on Thursday caused some buyers to pull back their bids late in the week, according to Wright.
Expectations for large cattle-on-feed numbers out of the U.S. accounted for much of the selling pressure in Chicago futures, with both live and feeder cattle contracts falling to their weakest levels in two months.
While the Canadian cash market is not directly linked to U.S. futures, activity there usually sets the broader tone in the North American trade.
The futures may be seeing some nearby weakness, but Wright thought the longer-term outlook remained favourable for U.S. beef and cattle, given some of the recent trade deals the country has signed.
While bilateral agreements the U.S. has made with China, Japan, and Korea could cut into some Canadian business, he expected Canada would sell more into the U.S. while also filling other demand holes.
“It will displace a little bit, but it won’t displace a lot,” Wright said of increased U.S. exports. Canada has developed some new markets in recent years as U.S. trade issues put them on the sidelines.
“We’re very much driven off of the U.S. market,” senior Canfax analyst Brian Perillat said, adding, “if they can ship more product and their demand for cattle goes up, that’s good for all of Canada and the U.S.”