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Short week stays quiet as most major marketings done

USDA’s latest Cattle on Feed numbers will be bearish

The Victoria Day long weekend limited activity at Manitoba’s cattle auction yards during the week ended May 26, but the market was steady for the animals that still moved.

“I didn’t see any change from the previous week. Everything was fully steady on the feeder cattle,” said Robin Hill of Heartland Livestock Services at Virden.

The butcher cattle market was down in Alberta during the week, he said, but that weakness had yet to make its way to the Manitoba feeder sector.

The reduced volumes did limit some of the buying interest, as it’s getting harder for buyers to get a load together to move east.

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“The small volume takes some of the bigger players out,” said Hill, adding that the slowdown was normal for this time of year, as most of the major marketing is done for the time being and ranchers are now just cleaning out pens.

“We’re seeing a few local guys on the marketplace, poking away on some cattle for grass,” said Hill. However, those buyers are only looking for small volumes, which aren’t enough to really sway the market.

In addition to feeder cattle, open cows and feeding-type cows going out to grass account for much of the animals moving at this time of year.

With cattle moving out to pasture, a shot of rain was appreciated during the week as the moisture helped the hay and pasture land green up, said Hill.

U.S. futures prices didn’t do much to provide direction during the week, but the strengthening Canadian dollar was being followed closely, he said.

The currency gained roughly a cent relative to its U.S. counterpart over the course of the week, settling May 26 at 74.32 U.S. cents, which weighs on Canadian cattle prices.

In other news, the U.S. Department of Agriculture’s Cattle on Feed report during the week showed the largest number for April in 14 years. The inventory in large feedlots on May 1, at 11 million head, was up two per cent from the previous year after placements in April ran 11 per cent ahead of the year-ago pace. The large U.S. number will be bearish for prices, as demand may back off slightly.

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Phil Franz-Warkentin - MarketsFarm

Phil Franz-Warkentin writes for MarketsFarm specializing in grain and commodity market reporting.

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