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 rally

It was a great week for cash cattle with the Canfax weighted average for steers at $167.52 per hundredweight, up $3.98, and heifers $166.06, up $2.70. Those were the highest prices of 2017 and the best since March last year.

Exports to the United States have picked up in recent weeks and domestic slaughter is running above year ago levels, so yearling supplies are being worked through at an aggressive pace ahead of schedule. The trend is expected to continue.

Both major Alberta packers were active, and a few cattle also traded to American packers. Western Canadian slaughter fell to 36,300 head. With packer margins seemingly positive, reduced slaughter volume is likely a strategy to manage cattle.

Alberta cash-to-Chicago futures basis levels were the strongest this year. The last time fed prices were at a $9 premium over the nearby Chicago live contract was in June 2015.

Prices often rally from the first half of March to the second half of the month. Spring highs will likely be reached sometime in the next 30 days. In the U.S., rising beef prices allowed packers to bid higher for the tight market-ready supply. Dressed sales in the north were US$5-$10 higher than the previous week, while southern regions traded $3-$4 higher on a live basis.

Cows stronger

D1, D2 cows ranged C$94-$106 to average $100.90 per cwt, up $1.65. D3 cows ranged $80-$96 to average $90.30, steady with the previous week.

Rail grade cows ranged $191-$196 delivered, up $3.

U.S. buying interest helped lift butcher bulls almost $7 higher to average $122.20.

Weekly western Canadian non-fed slaughter to March 11 fell 19 percent to 6,600 head. Weekly non-fed exports to March 4 were steady at 3,884 head.

For the year, exports are down 31 percent. Strong non-fed prices could flush out more calving culls if weather and road conditions allow shipping.

Feeders rally

The feeder steer average rose $3.51 per cwt., while heifers rose $2.69. Stocker calves lighter than 600 pounds rallied $3-$5.50.

Broad buyer interest lifted steers 600-800 lb. $4.50-$5.50, while heifers rose $2-$2.50.

Large feeders heavier than 800 lb. saw steady prices.

Weekly sales volume fell 14 percent to 33,823 head. It appears spring volumes have peaked and should tighten toward the third quarter.

The year’s auction volume is down eight percent. The year’s exports total 17,810 head, down 27 percent from last year.

Auction offerings in coming weeks should remain manageable. Interest from those who want to put cattle on grass should be good, but feedlot interest might moderate given strong placements in February.

Eastern buying is supportive, and feeder exports to the U.S. usually ramp up from March to mid-April. Bred cows ranged $1,300-$2,300.

Beef soars

The Choice cutout was US$222.36 March 16, up a strong $6.80, and Select was $213.87, up $4.87. The cut-out rally normally wanes by mid-March.

In Canada, the AAA cutout in the week to March 3 was C$274.32, up $4.90, and AA was $266.69, up $5.66.

Cattle on feed

There were 871,956 cattle on feed in Alberta and Saskatchewan feedlots March 1, down six percent from last year and from the five-year average.

Placements in February were 148,539, up seven percent.

Marketings in February were 100,281, down 15 percent.

With the historically wide steer-heifer calf spread, there was a notable increase in heifers lighter than 700 lb. entering feedlots.

Heifer calves lighter than 600 lb. rose 82 percent compared to last year, while 600-700 lb. heifer placements were up 31 percent.

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