Weekly Manitoba cattle report

Winnipeg, (MarketsFarm) – Manitoba cattle auctions were quiet over the Christmas and New Year holidays, but firmness in the United States futures markets could bode well for prices when activity resumes in the first sales of 2020.

“I’m looking for a rally in the fats (butcher cattle) into about March,” said Ben DiCostanzo, senior analyst with Walsh Trading in Chicago.

He expected nearby live cattle futures would attempt to trade above US$130 per hundredweight over the next few months. That would mark an improvement of about US$5 from current levels, and the top end of the price range values have traded in over the past four years.

However, seasonal trends would then point to a “May/June swoon,” according to DiCostanzo.

He was less optimistic on feeder cattle, but expected the nearby futures could still get into “the mid-US$150s” over the next few months.

“We usually get a rally in the first quarter, as we get less cattle going through and demand seems to be holding steady,” said DiCostanzo.

The cattle futures market also has an eye on export potential, with a trade agreement between the U.S. and Japan possibly opening the door to more U.S. beef sales. “We could see demand from overseas compete with our local demand and help push prices higher,” said DiCostanzo.

The looming trade deal between the U.S. and China could also have some spillover support for cattle, although the country is not a major customer for U.S. beef. “If they do (buy beef), that’s an added bonus,” said DiCostanzo, although he expected the pork sector would be more directly influenced by any agreement with China.

“You need competition to drive prices higher,” he added noting that “as long as the stock market remains firm I think we’ll do fine.”

“It will take an outside event to dampen peoples’ spirits, and unless that happens things should hum along,” said DiCostanzo.

Most Manitoba cattle auction yards will hold their first sales of 2020 during the week of Jan. 6 to 10.

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