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 market rallies

The weaker Canadian dollar and rising cash cattle market in the United States drove the Canfax fed cattle averages sharply higher.

Fed steers averaged $148.15 per hundredweight, up $7.38, and heifers were $147.77, up $5.03.

The local market was not keeping pace with the U.S. rally.

The Alberta cash-to-Chicago futures basis widened to -$11.91. The basis was about $1 weaker than the five-year average for the week and was the widest since August 2016.

Most cattle sold were to be delivered within two weeks.

Fed cattle exports topped 9,000 head, which was the second largest weekly total this year.

Fed prices usually rally this time of year as supplies tighten and retailers buy for the holidays.

The strong pace of slaughter should support prices.

In the U.S., cash cattle in the south traded at US$121-$125, up from $116-$119 the previous week. Dressed trade was mostly at $192-$195 in the north.

Packer margins were good, giving them capacity to bid higher. Also, beef values should improve as demand for more expensive cuts rises into the holiday season.

Cows lower

Larger supplies at auction have kept prices in check.

D1, D2 cows ranged $80-$95 to average $87.64, down $1.44. D3 cows ranged $70-$85 to average $78.33. Rail grade cows ranged $170-$175.

The average for D1, D2 cows in Ontario is more than $20 lower, and younger Ontario cows might be shipped to Western Canada.

Bulls hit the lowest price since March 2014, at $99.06, down $1.03.

Some speculators are taking advantage of the low prices to buy cows with an eye to hold them a few weeks to hit the Christmas or early new year market.

Fall feeder run peaks

Alberta auction volume was more than 105,000 head for the second consecutive week. The last time there were two consecutive weeks over 100,000 head was 2002.

Last year, the combination of lower calf prices and ample forage and feed grain stocks encouraged producers to carry cattle into the new year.

This year, stronger calf prices and higher priced and better quality grain have encouraged producers to sell calves much earlier.

The fall run has likely peaked, and with a large flush of calves already marketed, some feedlots may be getting close to capacity.

This could limit trade later this month and into December.

A few 30- to 45-day weaned calves were offered, and premiums have been hard to come by.

Pre-conditioned feeder values will likely increase in coming weeks, or at least gain ground on fresh weaned calves.

Yearling volumes are seasonally declining, but the few sold are trading strong. Steers and heifers heavier than 900 pounds rose $3-$6 and traded at the highest point since February-March 2016.

Yearlings from Saskatchewan and Manitoba are going to Alberta to be fed.

Western Canadian calf and feeder prices remain at a premium to the U.S., which will limit export demand.

Beef rises

Canadian steer carcasses to Oct. 28 averaged 924 pounds, down five pounds from the previous week and about equal to last year. Heifer carcasses rose two lb. to 852 lb. That was 13 lb. more than last year.

U.S. steer carcasses are 16 lb. lighter than last year.

U.S. Choice beef jumped US$5.88 to $208.25 Nov. 2, while Select was up $1.25 at $193.16.

Choice is now up $20 over last year, and Select is up $19.

Weekly Canadian cutouts to Oct. 28 rose 55 cents to C$246.86 per cwt. on AAA and $1.41 to $234.19 on AA.

AAA was up $15 from last year, and AA was up $11 per cwt.

Stronger U.S. prices and a weaker Canadian dollar meant the AAA-Choice spread widened to -$11.09 per cwt. from -$1.54, while the AA-Select spread widened to -$12.28 from -$4.65.

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