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 prices up
Western Canadian fed prices rose for the first time in four weeks, catching up with the previous week’s strong rally in the U.S. market.
The weighted average fed steer price was $170.74, up $2.83, and heifers averaged $169.12, up $1.87.
However, with more market-ready cattle expected, market power is shifting to packers from cattle feeders. This is leading to weaker basis levels and prices at a discount to the United States and Ontario.
More grid cattle have been noted over the past couple of weeks because the grid base prices are at a premium over the current cash market.
With more formula-priced cattle, packers can extend the pick-up date for cash cattle. Cattle bought during the week were scheduled for delivery at the end of June/beginning of July.
Three U.S. packers were in the Canadian market, and two of them bought cattle.
Western Canadian fed cattle were formula-priced against the six-state average and purchased on the cash market. Negotiated cash sales were at US$217 delivered. Depending on freight and dressing percentage, prices worked back to the low C$170s on a live basis.
Ontario prices were $9 higher than the Alberta market, prompting Manitoba cattle to move to Ontario for slaughter.
Western Canadian fed slaughter totalled 42,000 head two weeks ago, the most since September 2016.
Over the past 10 years, excluding 2014, the average decline from first half highs to second half lows was 17 percent.
Summer slaughter levels will have an influence, but the price decline this year is expected to be more than 17 percent.
Fed prices could fall as low as the upper $130s. Fed prices have never dropped more than 30 percent over the past 29 years.
D1, D2 cows ranged $105-$120 to average $111.63 per cwt, down 17 cents. D3 cows ranged $90-$105 to average $98.50.
Rail grade cows rose a little to range $207-$212. Butcher bulls fell $1 to average $129.
Weekly western Canadian non-fed slaughter to June 3 rose to 6,722 head. Slaughter for the year is up eight percent at 159,038 head.
Weekly exports to May 27 fell for a third straight week to 3,024 head. For the year they are down 27 percent.
Strong grilling demand supported prices.
Stocker prices and steer calves rose $2-$3, thanks to good demand from those who want to put them on pasture.
Similar weight heifer calves rose $3-$3.50.
Feeders 700-800 pounds were mixed on quality with steers falling a bit, while heifers rose more than $3.
Feeders heavier than 800 lb. were steady to $2.75 higher.
All weights of feeder steers traded at the highest level since the first quarter of 2016.
Auction volumes were 17,211. Volume is up 19 percent for the year at 622,342 head.
Weekly exports to May 27 were steady at 1,328 head. They are down 43 percent for the year.
Grass cattle procurement is winding down, and auction volumes should dwindle through to August. Fewer calves will be at auction, and prices are expected to trend mostly steady to lower.
The incentive to sell large feeders will continue as short keep profitability exceeds retained ownership to finish.
U.S. beef stronger
Choice was up US$4.81 at $250.39 per cwt., and Select was up $2.79 at $220.01.
The boxed beef market has been strong since early April, and Choice prices have exceeded the levels seen in the same week in 2015.
Boxed beef values typically peak within the next couple of weeks and fall after the demand for the July 1 and July 4 holidays is filled.