Prices for cattle at Manitoba auction yards stayed relatively firm amid declining volumes. Around 4,600 animals made their way through the rings during the week ended May 19, down from 7,500 the week before.
There was some softening on heavier-weight steers, while lower-weight animals held their own and ticked higher in a few cases.
“The cash market is extremely strong on the feeder cattle,” said Rick Wright of Heartland Order Buying Co.
Prices have been above average at many stockyards over the past couple of weeks, he said. Buyers have also been very active in purchasing forward contracts on yearlings.
“Lots of guys are buying grass cattle so they can go out on the pasture,” he added.
The futures market has been somewhat volatile, according to Wright. The cash market has been running ahead of the futures for the past three or four months, he added.
As a result, Wright said, the basis is starting to widen.
“Certainly there’s some mitigated risk there as well, so the guys are surprisingly aggressive.”
For the past five months, he said, many experts have been saying the market was on the cusp of softening, but “it’s not as big a risk as we thought it was going to be… The market has been considerably better.”
One of the surprising things about recent auctions is how many cows have been moving, according to Wright.
“The prices are steady on the cows and we don’t think they’ll change much over the summertime; the numbers should drop on them,” he said.
Prices for heiferettes on the slaughter market trended a few dollars higher at some locations.
Bids for mature bulls stayed mostly steady.
Reports out of Chicago indicate U.S. packers have enough inventory now to get them through the rest of the month.
Wright expects demand for top cuts of beef to remain steady due to the approaching Father’s Day holiday.
“We’re in grilling season coming up here so steaks and hamburgers are going to be in strong demand,” he said.
One factor working against Canadian cattle is the climbing value of the Canadian dollar. Growing doubts over the U.S. administration’s ability to push through a business-friendly agenda have been weighing down the U.S. dollar and supporting the loonie.
During the first week of May the Canadian dollar was just over 72 U.S. cents but has since moved above the 74 U.S.-cent mark, as of May 23.