Canfax report

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

The fed steer weighted average rose $3.34 to $153.82 per hundredweight. Heifer trade was comparable but too small to establish an average.

Dressed sales were generally $5 per cwt. higher than the previous week at $258-$260 delivered.

Fed prices rallied more than $24 over the past nine weeks.

Deferred delivery was a key negotiation component on fed offerings as market-ready inventories were aggressively pulled forward.

Feedlot managers would prefer to defer delivery and give cattle more days on feed.

Others are trying to defer taxable income until 2017.

The cash-to-futures basis im-proved to +$6.33 and was the second strongest weekly basis this year.

Weekly western Canadian fed slaughter to Dec. 10 fell nine percent to 28,335 head.

Weekly exports to Dec. 3 rose to 6,771 head.

Tight market-ready supply will restrict the kill over the holidays, and chain speeds will slow.

In the United States, cash cattle bids in the Plains were up to US$112 per cwt. compared to as much as $115 for asking prices, Reuters reported. The previous week, cash cattle brought $109-$112.

Cows stronger

D1, D2 cows ranged C$85-$100 to average $92.10 per cwt., up $2.17.

D3 cows ranged $78-$91 to average $84.38, up $6. That was the largest week-over-week increase this year.

Some strength was from packers, but there was also speculative buying of leaner types to put back on feed. Rail grade cows ranged $178-$183.

Western Canadian cow slaughter volumes topped 9,000 head for five consecutive weeks. Slaughter has now started to moderate.

Slaughter bulls were $102.50, up $1.19.

Feeders strong

Alberta calf and feeder prices are at a premium to the U.S. market. Feeder exports are at a crawl, totalling a meager 237 head for the week to Dec. 3.

A lot of cattle could again be targeting the summer-fall fed cattle market if exports do not pick up during the first quarter of 2017.

The cash market was steady to higher as the western Canadian feeder and calf index saw modest gains. On average, steers rose 87 cents per cwt., and heifers rose $1.02.

Stronger cash prices prompted some producers to sell cattle ahead of schedule.

Alberta and Saskatchewan auction mart volumes for the first half of December are up 45 percent compared to last year.

There was not much discount on heavy cattle. In some cases, 1,000-1,050 pound feeders were trading at the same price per pound as 900 lb. feeders.

Cash prices for immediate delivery are stronger than for late January or early February.

Bred cows averaged $2,000 per head and heifers $2,250 with top-end sales near $3,000, the highest this fall.

The average steer calf-to-bred cow ratio was 1.80 to 1.87 in the first half of December. It is taking almost two steer calves to buy one bred cow. The five-year average calf-to-bred cow ratio for December is around 1.6.

Cattle on feed

There were 870,569 cattle on feed Dec. 1 in Alberta and Saskatchewan, down 10 percent from last year at the same time. It was the fifth straight month that inventories were below a year ago.

Placements into feedlots were delayed into November because of the late fall. The total was 269,894, up 19 percent from last year.

Heifer placements rose 42 percent, while steers were up only seven percent. Steers were marketed earlier this fall.

Marketings in November were 127,142, up five percent.

Market-ready supplies should be manageable through much of the first half of 2017, given the aggressive marketings and delayed placement patterns.

U.S. beef up

U.S. boxed beef Choice prices Dec. 15 rose US$3.98 to $193.46 per cwt., and Select climbed $7.12 to $178.54.

Weekly Canadian cutouts to Dec. 9 fell with AAA down C$4.33-$249.01 per cwt. and AA down $1.90 to $230.20.

All primals traded steady to lower with middle meats posting the largest decline. The AAA-Choice spread was -$1.42 per cwt., compared to +$0.91 the previous week and -$14.20 last year.

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