Wet weather is holding producers back from rushing to sell their cattle in Western Canada, according to an analyst.
“Volumes are a decent size, but they’re not burdensome by any means. (They’re) maybe slowed down a little bit by the weather and guys maybe reassessing if things are going to green up. It just takes a little bit of pressure off,” said Brian Perillat, manager and senior analyst at Canfax.
Dry weather throughout the summer had led to scorched pastures and reduced hay yields, as the start of the fall run drew close many rushed to cull cattle in order to preserve what little feed supplies they had. Wet weather throughout most of September has caused regrowth of pastures — and has led producers to reconsider selling so fast.
About 10,700 head ran through the eight main Manitoba auction marts for the week ended Sept. 28, up from about 8,400 head sold the previous week.
According to Perillat, due to sale sizes evening out, prices for cattle have been high on the Prairies.
“The fed cattle prices have been sort of inching higher or moving higher the last couple of weeks,” he said. “So the feedlots and buyers are feeling a little better, I guess, and that’s just flowing into the calf market; it remains pretty darn strong.”
A weaker Canadian dollar, due to North American Free Trade Agreement (NAFTA) negotiations, had been supportive for the market also. According to Perillat, most trade uncertainty didn’t carry over to the cattle market.
U.S. futures markets have also been supportive for Canadian cattle markets. Cattle futures have been rallying the last few weeks, according to Perillat, with early-2019 futures hitting contract highs.
Higher pork prices have also been supportive for the cattle market, according to Perillat. Pork prices have strengthened due to tropical storms in the U.S. and concerns over African swine fever in China and Europe.
“It’s tough, when pork prices are under extreme pressure, to get too bullish on cattle, but they all seem to be going in the right direction now,” he said.
The prices should hold throughout the next few weeks as long as there isn’t a glut of cattle thrown onto the market.
“It’s hard to say, but for right now, things are looking a little more positive than they did a month or two ago,” Perillat said.