A Portfolio Manager with Winnipeg-based Ventum Financial says cattle prices have been trading sideways over the last two months.
David Derwin noted full-weight live cattle futures were trading around $240US per cwt in mid-June then dropped to around $220 per cwt.
Its a similar situation for the feeder cattle market – sitting near the high of $370US per cwt at the end of June, then down to just over $300US, and back up to around $330US per cwt.
"So the market has certainly been moving sideways for the past couple of months. That’s positive in the sense that that downtrend that had started in the early summer has turned more into a sideways market." Derwin said.
But when looking at prices over the past month, they've gone up, he said.
November feeder cattle futures have gone from $300US per cwt to $330US per cwt, while full-weight live cattle futures increased to $220US from $210 in the last month.
Derwin said there are a lot of small moving parts influencing the prices, from beef plant closures in the U.S. to the Trump Administration's efforts to lower domestic beef prices through imports of foreign beef.
However, he adds "whether those factors have any longer-term meaningful impact remains to be seen because there's still just the bigger-picture inventory and supply demand in this cattle market."
"These prices could be still stuck in a very wide range over the next few months."
But the long-term trend remains good for producers as Derwin noticed strength developing in futures prices for next spring and summer and could see feeder prices move up another 10 to 20 dollars and live cattle prices up another 10 dollars.
In Tuesday trading, October live cattle futures closed at $217.22 per cwt, down 22 cents on the day, while December live cattle futures closed unchanged at $220.80.
October feeder cattle was up $1.75 to close at $333.65 per cwt and November feeder cattle was also up $1.62 to $330.90 per cwt.
