Canfax report

Posted

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.

Fed cattle steady

The western Canadian fed market showed exceptional strength in mid-December as prices traded near annual highs. Live prices in the United States have dropped about $13 per hundredweight in recent weeks.

Many Canadian producers, hoping for a more stable market, thought they might carry cash cattle into the new year as the Chicago cattle futures market fell. However, this was not necessary because the Canadian cash-to-futures basis strengthened further.

Canadian packers bought all the cattle offered in the cash market.

Fed steers averaged $179.21 per cwt. in the week ending Dec. 19.

Premiums were paid for cattle scheduled for delivery during the holidays.

Producers negotiating lift times beyond the first week in January saw less aggressive bids.

The Alberta-Nebraska cash-to-cash basis is much stronger than the historical average of -$8.05 and kept U.S. buying interest at bay.

Weekly fed exports to Dec. 6 totalled 7,324 head and marked the eighth straight week where exports have exceeded year ago volumes.

January is not known as a strong beef demand month.

However, reduced slaughter volumes over the holidays will help clean out the beef pipeline and should stabilize cut-out values.

The last Alberta-Saskatchewan cattle-on-feed report found that fewer yearlings were placed on feed than a year ago, which should keep market-ready supplies manageable in January.

Export demand will have to be watched closely. Interest in the western Canadian fed market could slow if U.S. fed supplies increase.

Cows steady

Slaughter cow prices were steady with D1, D2s at $120-$136 to average $128.13, and D3s ranging $105-$121 to average $113.88.

ADVERTISMENT

Market supplies are large for the season but have yet to outpace demand.

Rail cow bids were steady at $245-$250 per cwt. delivered.

Butcher bull prices rose 50 cents to average $140.94 per cwt.

Weekly western Canadian non-fed slaughter fell 21 percent Dec.13 to 7,986 head.

Non-fed slaughter was down nine percent at about 317,402 head this year.

Weekly exports to Dec. 6 rose to 8,986 head. They were about eight percent smaller for the year at about 327,355 head.

Slaughter cow marketings were expected to swell early in 2015.

Demand should remain strong.

Feeders plummet

Chicago feeder futures fell the three cents per day limit for five consecutive days until Dec. 17 as traders came to the realization that feeders were overpriced relative to fed cattle and the beef market.

The slide shook Canadian buyer confidence and cash feeder prices plummeted.

Feeder steer prices fell almost $8 per cwt. on average in the week ending Dec. 19, and heifer prices were $4.75 lower.

Limited supplies and varied quality contributed to light stocker prices tumbling $10-$11.

Feeder steers 400-600 pounds fell $6, and similar weight heifers fell $5.

ADVERTISMENT

Steers heavier than 600 lb. fell $7-$9. Heifer fell a little less.

Alberta auction volumes were down 38 percent at 24,078 head, the lowest weekly volume since the first week of September.

The yearly auction volume to mid-December was 1,658,178 head, up three percent.

Weekly feeder exports to Dec. 6 rose four percent to 11,472 head.

Feeder exports were up 43 percent to mid-December at 429,549 head.

The drop in the Chicago feeder market is believed to have bottomed out.

Beef weaker

Canadian beef prices were not available.

U.S. beef cut-out values slid $3.50 because most retailers had their needs met. Beef fell even as packers sharply cut back their slaughter.

Cattle-on-feed neutral

There were 10.876 million head in American feedlots Dec. 1, up one percent from the previous year. That matched expectations.

It was the largest year-on-year increase of cattle-on-feed since the summer of 2012, but the total was still five percent below the five-year average.

Placements in November were 1.795 million, down four percent from last year, as expected.

Marketings in November were 1.475 million, down 11 percent, close to expectations and the second lowest for the month in the life of this report series.

Other disappearance was 74,000, up nine percent.

ADVERTISMENT