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 LOWER
The Canfax weighted average fed steer price was $147.46 per hundredweight, down $1.78, and heifers were $146.66, down $2.12.
U.S. cattle futures and cash market were also lower. Futures were lower on worries that the monthly cattle-on-feed report might show more placements than expected. This proved true with the report showing an increase of 10.2 percent, much higher than the expected 7.7 percent increase. The higher number will mean more market-ready cattle in 2018.
Most dressed trade in Alberta were at $248-$250 per cwt. delivered, $2-$4 lower.
Improved basis levels and some large cattle that needed to be sold resulted in moderate trade.
Some feedlots were able to negotiate 1,050 pound weight breaks on their larger cattle.
Three Alberta packers were on the market with two looking for cattle in the next week or two, while the other was booking for December delivery.
U.S. packers were in the market with competitively priced bids.
The cash-to-futures basis improved $1 and is almost $7 stronger than two weeks ago. On the other hand, the basis is still weaker than it was at the end of October.
Western Canadian steer carcass weights dropped 19 lb. Steer carcasses tend to peak at this time of year, so the high may be in.
The fed market appears to be well supported at current price levels.
Packers are looking for quick pick-up cattle and have offered to lock up January cattle at a premium to current prices, which bodes well for demand.
The weaker futures market could be offset with a seasonal improvement in basis levels.
The U.S. fed market was buying for a short week. U.S. Thanksgiving is Nov. 23.
Live trade in the south was $4-$5 lower, mostly at US$119 per cwt., and rail trade in the north was $4 lower at $189-$190 cwt.
Western cow slaughter topped 8,500 head, the largest since February. Slaughter peaked at 9,750 head last year at the same time.
Larger cow slaughter volumes are likely still ahead. Peak volumes may not occur until early December this year.
D1, D2 cows ranged $80-$94 to average $87.33, down four cents. D3 cows ranged $69-$83 to average $77.33, down about $1.
Rail grade cows ranged $168-$173. Butcher bulls set new annual lows, averaging $96.56, down $1.89.
Canadian non-fed beef production is up almost 13 percent this year, but 85 percent trim prices have performed well. Lower imports played a role.
Beef imports from New Zealand are down 10 percent, and Australia’s are down 39 percent.
There is still a chance that D1, D2 cow prices could challenge or overtake the September lows.
Big auction volumes continue across the Prairies, and feeder price averages fell with steers down about $1.50 and heifers down about 50 cents.
Ontario 550 lb. steer calves are $63 per cwt. higher than last year, while western steer calves are up only $45-$48.
As a result, Ontario buyers will continue to be strong competitors.
Producers faced lower calf prices last year, and many opted to keep heifer calves for backgrounding into the new year. This year, more heifer calves are on offer.
Alberta-Saskatchewan cattle on-feed data shows placements of heifers lighter than 700 lb. are up 56 percent over the past two months, while steer placements are up only one percent.
Barley for early 2018 delivery is trading at about a 10 cent per bushel premium over the spot market.
U.S. feedlots hold a cost of gain advantage over western Canadian for the foreseeable future.
Bred cows ranged $1,500-$2,300 per head, and bred heifers ranged $1,500-$2,400.
It is early, but the bred market seems to be under-performing, given that calf prices are about $250 per head higher than last year.
With 950 lb. feeder heifers averaging around $1,735 per head, this should put a floor price on the bred heifer market.
Volumes have been light, but exposed heifers have already been placed on feed.
Bred cow and heifer volumes over the next 45 days could be large, suggesting this may be a buyer’s market. Bred prices traditionally increase heading into December.
US BEEF LOWER
The U.S. Choice cutout to Nov 16 was down $2.50 at US$210.21 per cwt., and Select fell $10.47 to $187.83. .
As Select plummeted, the Choice-Select spread spiked to $22 from $14. That was $7, or 47 percent, wider than a year ago.
Weekly Canadian cutouts to Nov. 11 rose with AAA up $1.75 at C$249.96 and AA up $4.63 at $243.34.
The AAA-Choice spread widened to -$20 from -$17, while the AA-Select spread narrowed to -$7 per cwt. from -$9.