Basis soars to record
Fed prices edged slightly lower with the Canfax steer average at $201.45 per hundredweight and heifers at $199.87.
Dressed sales were $337-$338 delivered in light trade.
The Alberta fed cash to Chicago futures basis strengthened to a record shattering high of +$20.31. With the record basis and stronger Canadian dollar, American buyers did not attempt to compete for western Canadian cattle.
Feedlot managers were unwilling or unable to book new fed contracts while the futures market failed to align with the lucrative cash market.
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Market-ready supplies are current as strong prices pull cattle forward.
Feedlots are trying to maximize feeding potential and improve profit by leaving cattle on feed longer.
Alberta fed prices should remain well supported.
Feedlots and packers in the United States were at a standoff last week.
There were a few dressed sales in the north at US$257 per cwt.
Cow supply tight
The western Canadian cow kill fell to 3,700 from 5,000, the smallest kill this year, which reflects seasonally tight non-fed supplies.
D1, D2 cow prices have averaged $147-$148 per cwt. over the past three weeks. D3 cows last week averaged $130.10.
Butcher bulls were steady at $167.56, $3.50 shy of the record set at the end of April.
Cow-calf producers are current in their marketing, and supplies are anticipated to remain manageable. Hamburger demand should be solid through the May long weekends in Canada and the U.S.
There were reports of increased dairy cow slaughter, but U.S. boner cow prices held steady with a weighted average of $215.50 cwt. dressed.
Feeders vary on quality
The western Canadian calf and feeder indexes fell on tighter supplies and varying quality.
Some producers sorting their grass inventory are marketing the heavy cattle instead of turning them out on grass.
The stocker market is seasonally picking up momentum.
The 650 lb. steers class often sets first half prices highs in May or June, but they are trading $10 lower than their mid-April highs of $308.50 per cwt.
Some areas in Alberta and Saskatchewan are dry, which has slowed interest in buying cattle to put on grass.
The Canadian dollar has risen. A one cent move in the Canadian dollar can account for roughly a $5 per cwt. swing in feeder prices.
Southern Alberta feed barley bids have pulled back from recent highs, but prices remain seven percent higher than in February.
U.S. beef rises
U.S. Choice cutout last week was US$257.58, up 68 cents, and Select was $245.84, up $1.79.
Canadian boxed beef prices for the week ending May 1 were C$311.50 per cwt. for AAA, down $3.01, and $308.55 for AA, down $3.36.
The Canadian cutout has traded at par to a premium over the U.S. market in recent weeks.
The AAA enjoyed a $1.52 premium over Choice, while the AA’s premium over Select was $11.94, the most since July 2009.
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.
