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 up
Cattle prices continued to recover with the Canfax weighted average steer price at $161.85 per hundredweight, and the heifer price at $164.03.
Alberta dressed prices were steady to $5 per hundredweight higher.
Steer prices over two weeks rebounded $8 but were still $3.68 lower than they were before prices crashed the first week of May.
Prices were the strongest for immediate delivery. There was about a $5 discount for two to three week deferred delivery.
The Chicago futures market drifted lower during the week.
The week’s Alberta cash-to-futures basis weakened by 75 cents to $2.40 per hundredweight.
Weekly western Canadian fed slaughter to May 14 surged 12 percent to 35,401 head because fewer cows and bulls were in the mix.
Weekly fed exports to May 7 fell 11 percent to 7,325 head.
Packers have topped up the number of cattle they have on contract and might have sufficient inventory for the grilling season, giving them the opportunity to pressure the cash market.
Prices in the southern United States were US$130-$132 last week, down $2-$4.
Northern dressed sales were $4-$5 lower with most trade at $205.
American feeders are marketing aggressively, and carcass weights in the U.S. fell below year ago levels for the first time in almost two years.
D1, D2 cows ranged C$92-$108 to average $99.60 per hundredweight, down $2.07 from the previous week. It was the first time since March 2014 that the average price had slid below $100.
D3 cows ranged $84-$97 to average $90.30.
The last time butcher cows set first half lows during May was in 1995.
Both Alberta packers appeared to have a five-day kill week, but no additional hours were committed to D grade cattle.
Western Canadian cow slaughter totalled 3,966 head, the smallest kill this year.
Cow slaughter for the year is up 12 percent.
Some producers say they are culling late calving cows to manage stocking rates for summer grazing.
Recent rain has helped pastures, which could relieve marketing pressure.
Demand improved for heavier feeders, while calves and light stockers were steady based on lighter volumes and quality.
The largest week-to-week price increases were seen in Ontario, where feeders heavier than 700 pounds fetched a premium over the Alberta market.
When 850 lb. steers set highs in January, lows tend to occur in late April or early May. That was the case this year as steers 800-900 pounds established lows in the first week in May and since then have rebounded 4.7 percent.
The feeder market is following a trend similar to 2012. Prices rallied about seven percent by the end of June when feeders bottomed in May 2012.
With strengthening feeder prices, the 550 lb. calf to 850 lb. feeder price spread has narrowed and is now the tightest this year.
The calf-feeder spread was $40.50 compared to $71 last year. However, that is in line with the May five-year average of $44 per hundredweight.
Feeder exports for the past three weeks have trended above year ago levels.
U.S. cutouts to May 20 jumped higher with Choice at US$227.16, up $12.70, and Selects at $211.16, up $5.91.
The Choice-Select spread widened to $16.01 from $9.22 the previous week and $12.90 last year.
Weekly Canadian cut-out values to May 14 rallied sharply with AAA at C$274.64, up $9.47, and AA at $266.78 up $7.99.
Canadian prices are running at a premium over the U.S. with the AAA-Choice spread at $1.28 per hundredweight and AA-Select at $7.90 per hundredweight.