Fed cattle supplies are manageable thus far into summer but seasonally fed cattle trend lower in the third quarter due to increasing market-ready supplies and declining demand for middle meats. Timely marketing through the second quarter left inventories current which should limit the downside ahead. Watch for sharp fluctuations in the Canadian dollar which have the potential to impact fed prices.
Eight hundred and fifty feeder prices will climb in coming weeks. They usually peak in August or early September as yearlings head off grass for town. The 550 feeder prices typically peak in early summer and slide as the fall run picks up. Good grazing will likely keep cows and calves on grass a little longer this fall so the volumes going through the markets may build more slowly in August and September. Indications are positive for calf prices this fall. Early deferred U. S. sales have calves forward contracted at levels above a year ago. Feed prices will be a factor and markets will be watching weather and crop progress reports closely in coming weeks. Haying is underway as I write this and many areas are struggling with wet, cool weather that could impact forage costs and ultimately calf prices.
There is no significant reason for weakness in the cow market in the near term. Cow beef values dipped but volumes are small enough to hold the price. Rising volumes in the third quarter will pressure the market, but not as steeply as in recent years. Demand for grinding beef is still driving this market on both sides of the border and reduced herd numbers will be supportive to prices.