Fed prices lower
The Canfax fed steer weighted average price last week was $185.06 per hundredweight, and heifers were $183.67.
The prices were about $6 less than in mid-January but remain comfortably higher than current break-evens.
Dressed sales were steady with the previous week’s sales.
Packers in January had to bid aggressively for fed cattle, partly because the number of slaughter cows is down.
The positions of the two major Alberta packers on inventory appears quite different: one plant is buying for beginning of March delivery while the other is scheduling cattle with a two week delivery.
Larger fed supplies are anticipated this month, and the Alberta plants could use the opportunity to slow chain speeds in an attempt to regain leverage. U.S. packer interest was noted, but no sales were confirmed.
American bids were working back to the mid $180s, depending on yield and location, which was comparable with local sales. The week’s cash-to-futures basis weakened but remained stronger than the five-year average.
Prices in the coming weeks will depend on several factors. Fed supplies should increase but remain manageable. Much will depend on how packers manage slaughter volumes and how beef demand fares, given that pork is much cheaper.
The fed market is anticipated to trade in the low $180s to the upper $170s.
Slaughter cow prices were steady with D1, D2s ranging $125-$141 per cwt. to average $133.88 and D3s ranging $112-$126 to average $119.
Rail bids were steady at $256-$261 per cwt. delivered.
Butcher bull prices were steady, averaging $146.31.
Weekly western Canadian non-fed slaughter to Jan. 24 rose 33 percent to 9,298 head.
Weekly non-fed exports to Jan. 17 rose 52 percent to 7,407 head.
Heavy feeder steers pressured
Alberta feeder steers traded mixed with calf prices rising more than $3 per cwt. However, larger feeders heavier then 800 pounds fell $6.
Average heifer prices were $3.29 lower with declines in all weight ranges.
Strong local demand for bunk replacements and grass cattle contributed to the steer calf price rally. U.S. buyers were aggressive competitors.
The steer calf-to-feeder spread over the past six weeks is the widest ever recorded.
The smaller calf crop and fewer yearlings available outside of feedlots are supporting prices.
Alberta auction volumes last week fell 14 percent to 28,000 head .
However, auction volumes are running 11 percent larger than last year at this point.
Weekly feeder exports to Jan. 17 rebounded to 8,942 head.
The pace is about 30 percent ahead of last year.
Feeder supplies should begin to tighten as strong prices flush background feeders to market.
The ability to manage feeder cattle risk with the Western Livestock Price Insurance Program and improved contracts should maintain generally steady to higher prices.
U.S. beef cut-out values were sharply lower.
A 30,000 head week-over-week increase in cattle slaughter last week added pressure for packers to move inventories, while demand for beef remained soft.
Choice fell US$11.06 to $244.59 and Select was down $10.55 at $238.34.
Canadian cut-out values were unavailable.
The Montreal wholesale price was steady at $316-$318 per cwt.
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.