Fed cattle rise
Trade in the Canadian market finally picked up enough last week to allow Canfax to establish prices, with fed steers at $136.73 per hundredweight and heifers at $140.16.
Prices were catching up with the sharply stronger American market of the past few weeks.
The Canadian cash-to-futures basis strengthened more than $10.75, thanks to the Canadian rally and slightly lower Chicago futures. The American cash market fell $2 from the record high prices of $152 the previous week.
The weekly western Canadian sales volume was down four percent at 11,296 head.
Weekly western Canadian fed slaughter to March 1 rose 22 percent to 33,418.
Weekly fed cattle exports to Feb. 22 rose seven percent to 7,824 head.
A few cash cattle were carried over, but the show list was expected to remain mostly steady.
Fed slaughter was adequate and up from a year ago, but packers have a comfortable supply.
Lackluster bids are anticipated this week, and prices should be steady to lower.
Cows set record
The western Canadian cow slaughter dipped lower than last year’s pace for the second week.
D1, D2 cows ranged $85-$105 to average $94.36 per cwt. and D3 cows were $75-$90 to average $84.50. It was up $4.50 from the previous week and a record high.
Cull cows have set first-half highs in March only twice in the past 10 years: 2004 and 2005.
Rail grade cows were $188-$193 per cwt.
Canadian packer demand for butcher bulls was sluggish because the market is largely export driven, even though the export pace is down two percent from last year at this time.
Non-fed supplies will continue to tighten, which could force packers to cut kill levels.
Export demand should remain firm because western Canadian prices are $16-$17 lower than U.S. utility cow prices.
Competition for grass cattle remains strong.
Steers and heifers 400-600 pounds are trading at their highest levels in Alberta, Saskatchewan and Manitoba.
In recent years, 850 lb. steer prices have trended lower in March and the first half of April.
Demand for bunk replacements is brisk as heavier feeders trade at or near record highs.
However, a price decline of two to three percent over the next month and a half would not be surprising. Strengthening barley bids and slightly lower live cattle futures will act as headwinds against the feeder market. Corn futures also have been rising, and feed prices could become an issue. The Alberta auction volume fell 18 percent with the cold weather last week, to 28,933 head.
Weekly feeder exports to Feb. 22 rose eight percent to 11,142, the most since the first week in December.
With cattle-on-feed inventories trending above last year, some feedlots say bunk space is becoming an issue.
Bred cows ranged $1,210-$1,750 per head. Bred heifers were $1,250-$1,775 and cow-calf pairs ranged $1,200-$1,750.
U.S. beef soars
U.S. cutouts jumped $14-$14.17 US per cwt., lifted by tight supply, reduced packer slaughter and rising pork prices.
The Choice cutout was $235.58 and Select was $233.00.
Cutouts were only $4.45 below the record set Jan 22.
U.S. packer margins should improve as fed cash prices come off their record highs and beef prices rise.
Canadian cut-out values for the week ending March 1 are unavailable.
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.