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 steady
Weekly average Alberta fed cattle prices have traded within a tight range over the past six weeks.
For the week ending Aug. 11, trade started at $236 per hundredweight delivered, generally $3 to $5 lower than the previous week. Moderate volume trade improved to $238-$239 delivered, which helped shore up weighted average prices. Steers finished the week $1.22 per cwt. lower, at $141.79. Fed heifers were $140.73, un-changed from the previous week with thin volume trading.
The Alberta cash to futures basis strengthened to +2.87. Weekly sale volumes were the largest seen this year.
Western Canadian fed slaughter for the week ending Aug. 5 slipped 17 percent lower than the previous week to 39,581 head. Year-to-date western Canadian fed slaughter was nine percent larger, totalling 1,054,353 head.
Canadian fed cattle exports to the United States for the week ending July 29 were 16 percent smaller than the previous week at 6,253 head, and year-to-date exports are seven percent larger at 183,151 head.
In the U.S. active trade, recent live sales were reported from US$114-$116. The majority of sales in the south were $1-$3 lower than the previous week at $115. Dressed trade in the north was generally from $183-$186 delivered and $1-$5 per cwt. lower.
U.S. steer carcass weights for the week ending July 28 surged seven lb. larger than the previous week to 875 lb. but were eight lb. lighter than a year ago. Stocker prices trended steady to modestly lower than the previous week, and feeders traded steady to $10 lower.
Cows down slightly
D1 and D2 cows traded at C$98.13, down $1.25 from the previous week.
Non-fed volumes have tightened. Many commercial auction facilities are seeing their lightest cow volumes of the summer.
It is common to see light numbers at this time of year, but it could also be price related because non-fed prices are trading at the lowest levels since the beginning of March.
D1, D2 cow prices have declined for seven consecutive weeks, easing 12 percent from their highs in late May.
Over the past 10 years (excluding 2014) the average decline from spring highs to second half lows stands at 26 percent. D1, D2 cows have potential risk of moving back to the low $80s.
Feeders drift lower
There has always been a close correlation between fed prices and calf-feeder cattle prices.
When fed cattle prices see a larger than average decline, it is not out of the question to see a larger than average decline in the calf market.
This year, fed cattle prices have declined more than 25 percent.
Over the past 20 years there have been only four other years where fed prices experienced a 25 percent or larger decline, that being in 2016, 2009, 2007 and 2004.
Looking at those four years, the average decline from first half highs to second half lows on 550 lb. calf prices stands at 27 percent. So far this year, 550 lb. calves have dropped 17 percent, and there still is potentially more downside risk to the calf market.
Cow-calf pairs traded at $1,700 -$2,500.
U.S. beef drops
The U.S. Choice cutout dropped US$4.53 per cwt. to $200.63, and Select dropped $1.59 per cwt. from the previous week to $196.19. Increased slaughter, slow demand and lower fed cattle prices all contributed to the lower cut-out prices.
The U.S. Department of Agriculture July retail prices were released Aug. 11. Choice beef retail value saw the first month-to-month decline since December 2016, down two percent from June.
Compared to a year ago, Choice beef value was up .2 percent. Lower cut-out values in the past two months could provide more feature opportunities at retail.
Canadian cut-out prices were not available.