Canfax report

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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 lower

The fed steer weighted average was $138.53 per hundredweight, down $3.54 and heifers were $136.55, down $4.28.

Dressed prices were $6-$7 per cwt. lower than the previous week.

For the past eight weeks, fed prices have been tracking slightly below the five-year historic trend.

Sale volumes for the week were moderate. Feedlots however, were not overly aggressive sellers and a significant portion of the fed offering was carried over.

For the second week in a row, the Alberta cash-to-cash basis was at a premium to Nebraska and strengthened to +$4.46.

Western Canadian fed slaughter for the week ending Aug. 19 rose 23 percent to 43,038 head.

For the year slaughter is up eight percent.

Weekly exports to Aug. 12 were steady at 6,032 head. For the year they are up eight percent.

The five-year historical price trend indicates prices should fall through to the first week of October. If fed prices continue to follow the trend, fed prices could bottom in the low to mid $130s.

This would put annual lows at a whopping 30 percent below the spring high reached in the first week of May.

Summer demand is waning and packers are expected to remain short bought.

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In the U.S., scattered live trade was reported $3 lower in the south with trade at US$106-$107 per cwt.

Rail sales in the north developed midweek with prices $4-$5 lower, mostly at $170.

Cows lower

D1, D2 cow ranged C$93-$106 to average $99, down 42 cents. D3 cows ranged $84-$95 to average $90.07.

Rail grade cows ranged $184-$189 per cwt.

Western Canadian cow slaughter volumes totalled 6,120 head two weeks ago, the third largest volume over the past 15 weeks. So far in August, cow slaughter volumes are up 2,150 head compared to last year at the same point.

Alberta prices have a $12 premium against the U.S. and $8 over Ontario markets.

Non-fed supplies are expected to increase into September but should remain manageable.

Over the next month, it is possible D1, D2 cows could average $94-$98 thanks to a resilient trim market.

Few calves on market

Over the past couple weeks, electronic sales have accounted for more than half of the total auction mart volume.

Most of the cattle on offer are yearlings. Calf volumes are very light, other than a few cow-calf pairs being split at auction.

In the forward delivery calf market, buyers are looking for weight as there is very little price slide being bid into the fall market.

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Steers weighing from 600-699 pounds across the Prairies for October-November delivery saw a weighted average of $204.27 per cwt. based at 617 lb., whereas 500-599 lb. steers settled at $209.86 based at 540 lb.

Heifer calves 500 lb. for fall delivery are trading $24-$30 lower than same weight steers, while heifers 600 lb. are $12-$26 behind steers.

This is largely dependent on whether replacements are being retained or sold.

Interest from the east has been noted, but demand has not been as aggressive as in recent years. Eastern Canadian fed prices have been at a discount to the Alberta market for the better part of this year.

Feeder cattle traditionally move toward the cheapest grain source. The U.S. now has a cost of gain advantage over Alberta, and there has been talk of importing U.S. corn.

For now, local feedlots are willing to bid a premium into the market to keep calves and feeders at home.

Last week, Alberta calf and feeder values were at a $2-$9 premium over the U.S.

Beef lower

In the week to Aug. 24, Choice fell $3.88 to US$191.75 per cwt. and Select dropped $5.54 to $188.66. The Choice cutout is now four percent lower and Select is three percent lower compared to last year.

Canadian boxed beef prices for the week ending Aug. 12 traded steady to lower with AAA up 44 cents per cwt and AA down $1.83 per cwt.

AAA remained at a premium over Choice at $3.87 per cwt., while AA was at a $3.70 per cwt. discount compared to Select.

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