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 rise
The fed steer weighted average was $163.54 per hundredweight, up 32 cents, and heifers averaged $163.36, up $1.49.
U.S. packers bid at a price premium to the local market, and a handful of Alberta cash cattle traded south for the first time in almost a year.
However, there was apprehension to market short-fed cattle to the United States because slaughter and grading discounts were expected to negate most of the potential marketing advantage.
Most sales remained in Alberta with dressed prices at $275-$276 per cwt. delivered.
A few loads of short-fed and clean-up cattle traded at a slight discount.
The Alberta cash-to-futures basis was steady and seasonally strong at +$6.95. Weekly western Canadian slaughter to March 4 rose 31 percent to 32,782 head.
Weekly exports to Feb. 25 fell seven percent to 6,739 head.
The market was well supported by strong beef prices and a rising Chicago futures market. There was no surplus of market-ready cattle.
Seasonally, beef prices tend to weaken into April before recovering in May.
In the U.S., live prices in the south were steady at US$124-$125 and steady to $2 higher in the north at $125-$127.
Dressed sales in the north were steady to $4 higher at $200-$204.
Butcher cows and bulls set new highs for the year.
D1, D2 cows ranged C$90-$106 to average $99.25, up $1.55. D3 ranged $80-$95 to average $89.90.
Slaughter bulls were $115.35, up $4.65.
Non-fed volumes at auction were reduced by poor weather across much of Prairies. The Alberta-U.S. cow price spread has narrowed in recent weeks.
From January to February, D1, D2 cows traded $6 over the U.S. utility market, but the premium has now narrowed to $1.
Western Canadian trim prices are higher than the U.S. market, resulting in an uptick in trim imports into Canada.
Heifers rose on average $2.93 per cwt., while steers were up 49 cents.
The heifer-steer spread narrowed, but the 550 pound steer-to-heifer price spread remains historically wide.
With southern Alberta barley prices down 24 percent from last year, one would expect to see heifers priced more competitively, but that has not been the case.
Heifers 550 lb. traded $31 less than steers, compared to a $29.50 discount last year at the same time.
Heavier feeders strengthened in recent weeks, but basis levels have weakened as they usually do.
The forward delivery market was lightly tested.
Saskatchewan steers based at 950 lb. for September delivery traded from $164-$165.25.
Using a 0.10 slide, 850 lb. basis levels are around $3.50 to $4.50 f.o.b.
Weekly Canadian feeder exports were the largest this year, totalling 3,708 head. However, exports are 50 percent smaller for the year.
Competition between grass buyers and terminal feedlots is good on cattle weighing 600-725 lb.
A few grass cattle from Manitoba appear to be going to Alberta.
More calves than yearlings were placed in feedlots in the second half of 2016, so feedlots will be looking at a slower inventory turn rate. Pen space for new arrivals could be an issue.
U.S. boxed beef prices rose again with Choice up US$7.21 at $215.56 per cwt. and Select up $5.28 at $209.
Whether consumer demand will keep up with the strong beef prices will be a key factor to watch.
Weekly Canadian cut-out values to Feb. 25 were also strong with AAA up C$7.92 at $269.42 and AA up $8 at $261.03.