Fed cattle lower
Packers had good captive supply but feedlots were current in their marketing.
The result was light trade last week with lower cash prices.
Fed steers averaged $117.84 per hundredweight, down $1.50, while heifers were $116.76, down $1.77.
Dressed sales generally were $198 per cwt. delivered, down from $199-$201 the week before.
A few cattle went to the U.S. at prices comparable or at a slight premium over local sales.
Cattle sold to the U.S. were scheduled to be lifted within a week whereas local lift times are sitting two to three weeks out.
Alberta fed cash-to-futures basis weakened $1.47 to close at -$13.93. The five-year average is -$12.11. Basis levels have not been this weak since mid-April.
More slaughter cows will be available soon and packers will meet some of their needs that way.
There is little incentive for Canadian packers to buy for later delivery because the new country of origin labelling rules coming at end of November will likely restrict access to the U.S.
But in the short term, American packers should be aggressive on the Canadian fed market.
Normally fed prices rise at the time of year but that is unlikely unless there is a change in the U.S. market.
Slaughter cows up
Cow prices were up $1-$1.50 per cwt. on a seasonally light volume. D1, D2 cows ranged $72-$83 to average $78 and D3s ranged $64-$75 to average $69.30.
Rail cow prices were mostly steady at $150-$155 delivered.
Butcher bull prices fell 74 cents to average $86.18 per cwt.
Weekly western Canadian slaughter to Sept. 28 rose eight percent to 6,761 head.
Weekly non-fed exports to Sept. 21 were unavailable.
American buyer interest will support prices this week, to help offset the negative pressure from increased supplies going to market now that harvest is over.
Feeder prices surge
There was a large offering of quality feeders but prices rallied on strong demand.
Calves 300-400 pounds rose sharply. Middle weight steer surged $3-$4 per cwt. and heifers rose $2-$3.
Feeders 700-800 lb. were little changed, perhaps indicating off-type yearlings in the mix.
Steers heavier than 800 lb. rose $1-$2 while heifers in that class rose more modestly.
Alberta auction volumes rose 32 percent to 40,773 head .
Year-to-date auction is up 41 percent over last year but when compared to the historic third quarter average, volumes are down 86,000 head.
Volumes in coming weeks are expected to increase.
Last week’s price surge could spark increased marketings this week that could pressure prices.
Canadian beef mixed
Processing margins in the U.S. are negative and cattle slaughter was running behind the year ago volume.
The USDA boxed beef report was not available, but other market reports showed that U.S. boxed beef prices were steady to weaker.
Weekly Canadian cutouts to Sept. 27 were mixed with AAA down 93 cents per cwt. at $193.36 and AA up $1.05 at $183.68.
Cutouts typically gain strength in the fourth quarter with a steady to wider AAA-AA spread.
If the same pattern holds true this year, look for cutouts, especially AAA, to firm.
Montreal wholesale prices were steady at $224-$225 per cwt.
This cattle market information is selected from the weekly report from Canfax, a division of the Canadian Cattlemen’s Association. More market information, analysis and statistics are available by becoming a Canfax subscriber by calling 403-275-5110 or at www.canfax.ca.