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Values under pressure on lower-quality cattle

U.S. cattle markets have taken some of the shine off Manitoba’s fall run so far

The annual fall cattle run was running at full steam at auction yards across Manitoba during the week ended Oct. 23, with large volumes moving through the rings. However, the big numbers and sharp losses in U.S. cattle futures markets weighed on prices.

“We’re in the middle of it now, it’s the busiest month of the marketing year,” said Allan Munroe of Killarney Auction Mart.

While a good silage crop and favourable conditions at feedlots had led to some optimism in the cattle sector ahead of this year’s fall run, the recent drop in the futures has cut into that sentiment somewhat.

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“The shine has gone off of it at the moment,” Munroe said.

Live cattle futures in Chicago have lost about US$10 per hundredweight over the past two weeks, with the December contract trading at US$103/cwt on Oct. 22. Feeder cattle posted even larger losses since the beginning of October, with the January futures settling around US$125/cwt on Oct. 23.

Killarney holds its sales on Mondays, and other auctions around the province saw prices deteriorate with the futures further as the week progressed.

While the futures could quickly change for the better or worse, the seasonal nature of the industry will keep the numbers high at auctions over the next month.

The run is expected to continue over the next month, with sales already filled up into the middle of November. “We’ll stay busy into December, unless we see a major correction in prices,” said Munroe.

From a marketing standpoint, calf weights were up on the year, he said, which was a positive sign. He added that the hay crop wasn’t spectacular, but noted feed supplies were generally OK compared to 2019, when many producers didn’t even have their silage off at this time.

Good-quality cattle were seeing the best demand, with middleweight lower-quality animals under the most pressure, according to Munroe.

Demand was coming from both the west and east, with the good calves going to the east. Some feeders were also staying locally, as Manitoba feedlots fill up for the winter.

Feeder steers in the 400- to 500-lb. weight category were bringing $200-$260/cwt during the week, while heifers in the same weight class topped out at $210/cwt for the most part.

Butcher cows came under some pressure, but volumes were light on that end of the market with the focus on feeders at this time.

D1 and D2 butcher cows were generally trading at around $65-$75/cwt across the province during the week.

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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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