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 fall
Fed cattle prices were hammered lower again with the Canfax steer weighted average at $129.72 per hundredweight, down $4.56, and heifers at $129.44, down $3.43.
Both federal Alberta packers were active on the cash market and buyers were still looking for cattle for the second half of October delivery.
October is traditionally the second-weakest Canada-to-United States cash basis month of the year.
That has not been the case this year, as Alberta fed cattle prices have traded -51 cents to +$1.35 against the Nebraska market over the past two weeks.
Canadian fed exports in September were large, ranging from 5,300 to 9,200 per week, but are expected to moderate this month.
Packer inventories have tightened and plants may be forced to scale hours back in coming weeks.
Basis levels remain historically strong, which would suggest there is not a lot of upside to the market.
Prices will likely average in the low $130s for the second half of October.
In the U.S., dressed sales in the north were US$4 to $6 lower, while in the south, live prices were $4 lower.
Weighted average prices in Nebraska came in below $100 for the first time since December 2010.
In addition to the weight of excess supplies of beef and pork on the market, losses were driven in part by a rising American dollar that made U.S. commodities, such as beef, more expensive in some international markets.
Cattle prices might also be adjusting to the lower cost of production from low feed grain prices.
Ample cow and bull supplies on the market pushed prices lower.
D1, 2 cows ranged $82-$97 to average $88.79 per cwt., down $2.46. D3s ranged $72-$86 to average $79.25.
Rail grade cows ranged $173-$178.
Butcher bulls fell 86 cents to average $110.70.
Weekly western Canadian non-fed slaughter to Oct. 8 fell eight percent to 5,323 head.
Weekly exports to Oct. 1 fell 10 percent to 4,698 head.
Cow marketings will increase in coming weeks, pressuring prices lower.
The weaker fed cash and Chicago cattle futures markets weighed down feeder prices.
Calf prices were generally $3.50-$5.50 per cwt. lower.
Feeder steers heavier than 800 pounds saw a similar price decline while heifers fell sharply, down $7.50.
Prices eroded more aggressively as the week progressed.
In steers, the seasonally narrow calf-yearling spread has been steady for five weeks, but the heifer calf-yearling spread has tightened because of lackluster buying interest.
Eastern buyers showed interest, providing competition.
There was a range of lot size, and quality and cold wet weather limited marketings at some auctions.
However, volumes were up 22 percent over the previous week.
For the year, volume is down nine percent at 887,899 head.
Weekly exports to Oct. 1 surged to 3,308 head. For the year, exports are down 39 percent.
More new -crop calves and salvage cows are anticipated at auction.
US beef lower
U.S. Choice cutout was down US$1.88 at $181.60 per cwt. and Select was down $2.45 at $172.61.
Even with the lower cut-out prices, packer profit margins should remain good thanks to the lower cattle costs.
In the U.S., weekly slaughter is strong. Retailers are offering sales on beef.
Weekly Canadian AAA cut-out values to Oct. 7 rose C$4.41 to $246.13 and AA rose $3.38 to $238.57.
Cattle on feed
For the third consecutive month the number of cattle on feed in Alberta and Saskatchewan was below the previous year.
The on-feed number for Oct. 1 was 579,572, down 18 percent from the same time last year and down 17 percent from the five-year average.
It was the smallest on-feed number for October on record, going back to 2000.
Placements in September were 175,585, down 19 percent.
Heifers as a percentage of placements, were 44 percent, up from 38 percent last year.
Strong domestic slaughter and fed cattle exports caused the September marketing number to rise to 167,937, up 23 percent over last year.