It has been a busy week in the cattle markets, as Canada and the United States are on the brink of a trade war that we would not have imagined a year ago. Much of that is out of the control of feedyard owners and ranchers, but the impacts will most certainly be felt, depending on the outcome.
Protein demand is currently strong, and is definitely playing a role in carcass weights and other fundamentals of this beef market.
What we know
- Future prices had a volatile week with no clear direction. October live cattle were up 0.43% on the week but three of the five days were down and an almost limit up day (+2.90) on Wednesday saved the week.
- Demand is strong. In the U.S., there is not only strength in boxed beef shipments, but also exports.
- Packers are experiencing very good margins which is pulling cattle forward resulting in lowered carcass weights. This is also good for producer margins.
- Talk of a “wall of cattle” is still dampening the mood for many analysts and producers trying to comprehend its potential impact on the market.
- Due to NAFTA risk it is important for producers to watch the Canadian dollar very closely in the coming weeks to look for hedging opportunities.
- Feed barley prices in Lethbridge for the week ending June 1, saw a range of $257 to $270 per MT. A month ago on the week ending May 4, 2018, the price was $25 to $262/MT.
Hear Anne Wasko and Shaun Haney discuss all of these issues in this weeks Beef Market Update.