Cash cattle markets on both sides of the border and futures in the U.S. are reporting sluggish volumes but steady prices.
Rick Wright of Heartland Order Buying said few feeders are entering sales rings and most of what’s being sold on cash markets are cull cows and bulls.
“With our holiday on Sunday, Monday and theirs (U.S.) on Wednesday, it kind of put a monkey wrench into the market, as far as getting prices established,” he said.
However, on cattle for deferred deliveries, Wright said his company made internet sales on 700 feeders that saw 950-lb. steers for September sell for $180/cwt in Manitoba and heifers at 925 lbs. sell for $175.25 for August delivery.
The current market is mostly for cows, which are selling for 80-90 cents/lb., he said.
Although many people are talking about how cow prices should be better because it’s hamburger season, Wright said cows are competing for slaughter space with fed cattle.
“The packers are making a very tidy profit on what they’re killing right now. The meat demand is quite strong.”
Robin Hill of Heartland Livestock Enterprises at Virden said his company’s sale was held to clear out calves still in the yard from the Virden and District 4-H sale on July 3.
In all, 242 animals sold, with about two-thirds of those being destined for slaughter. Good cows and fed cows sold for 80-86 cents.
Small volumes make it difficult to quote prices for feeders, he said, but the market was steady compared to last week when bids for 400- to 500-lb. steers came in at $210-$230/cwt. Heifers (600-700 lbs.) sold for $170-$190/cwt.
Producers will start haying in July and that is likely to be the biggest market driver for the month. If producers are busy and the cattle have lots of feed, nobody will be in a rush to push cattle to market, he said.
Wright said he’s noticed a bit of nervousness over potential tariffs and a global trade war affecting beef markets, but those concerns are not affecting buying habits.
Strong export and domestic demand are currently driving the fed cattle market, he said. The supply peak is not far off, he added, and he’s not expecting fed cattle to go down much more over the next week or 10 days.
“But last year at this time, we were selling cattle for over $3 dressed, and today we’re selling for $2.30, $2.40, $2.44, depending on what part of the country you’re in.”
In the U.S., Ben DiCostanzo, senior strategist at Walsh Trading in Chicago, said cash markets have not seen enough cattle to establish pricing.
Packers will eventually need to enter the market and that could spark a rally in futures markets, he said, but when that would happen remained the big question. Futures contracts were reaching highs of US$107.57/cwt for August live cattle, with a resistance point of US$107.35, he said. August feeders were reaching highs of US$153.62 with resistance at US$153.50.
“They’re struggling to get above those resistance levels, but if they do, we could see a larger rally take place, which would defeat the packers’ plans.”
Cash prices being offered by packers were currently around US$108, he said, while producers were looking US$112 or higher.
“So we’ve got quite a big range.”