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Few cattle are on offer to soak up increases in prices

Market watchers haven’t yet seen a ‘wall of cattle’ arrive

With few cattle moving through the system it’s tough to get a real test on prices, but Mike Nernberg of Winnipeg Livestock Sales said small numbers were moving in Alberta.

With 50 yearlings sold earlier this week, the count was too small to provide a solid indication of prices, but 900-lb. heifers sold around the $180/cwt mark and 900-lb. steers sold for about the same.

Prices were higher than many in the industry were expecting, he said, and he hopes that will prompt more producers to sell.

“It looks like in the next two weeks prices will draw them out because prices are higher than last year.”

It’s still early days in summer, he said, so prices have yet to become firmly established, but they are currently sitting at about 20 cents higher than a year ago.

With feed grain prices remaining high, he said he thought more cattle might be moving through auctions, but that isn’t happening.

Cattle marketings seem to be more spread out this year, he said. The usual bump up in calves going to market this spring didn’t happen.

“The fat markets didn’t come down as much as the experts said they would; this wall of cattle hasn’t shown up. So, the fat market, instead of going down over the summer, has come up.”

Packers are buying on the open market because they can’t contract at a profit, he said.

It’s a case of having to eat our way through the present oversupply, he said. However, the hot weather isn’t doing the cattle industry any favours.

“It’s too hot. Everybody is eating watermelon, strawberries and potato salad.”

Brian Lemon, general manager for Manitoba Beef Producers said he sees strong, but not great, prices.

“We’re interested to see how the dry weather and lack of rain and how it affects the fall run or whether animals will move early.”

He said he’s hearing packers have a lot of supply on hand and that could affect volumes.

Meanwhile, exports seem to be moving along well. Futures for live cattle on the Chicago Mercantile Exchange are at 109.175 cents/lb., up 0.225 cent from the previous day’s close.

The U.S. Livestock Marketing Information Center report issued July 13 reports prices for 750- to 800-lb. yearling steers at Oklahoma City averaged US$145.13/cwt during the first six months of this year. That’s up compared to US$138.68 during the same period of 2017.

The report also pointed out cash market prices in a five-market average were up 2.8 per cent for the first quarter of 2018 compared to 2017, but April-to-June prices have been 12 per cent below the year previous. The pricing outlook depends on how trade situations develop, it said.

About the author

CNSC

Terry Fries writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.

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