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 stronger
The fed steer Canfax average was $151.99 per hundredweight, up $1.29, and heifers averaged $143, down 26 cents.
A weaker U.S. cash market was offset by a weaker Canadian dollar.
Western Canadian fed basis levels strengthened, and fed prices established new second half highs.
In five out of the past six years, second half highs occurred in December.
Roughly half of the cattle traded were set for delivery the following week, while the other half were scheduled for the week of Dec. 18.
The Alberta-Nebraska cash-to-cash basis strengthened to +44 cents from -$4.38. It was the first time since mid-September that Alberta fed prices were stronger than the Nebraska market.
Western Canadian prices are also at a sizable premium to the Ontario market. Over the past two weeks, Alberta fed steer prices were $14 higher than their eastern counterparts, the largest premium since April.
Market-ready supply is tight. Most of the spring-placed cattle are cleaned up, and early placed summer yearlings need more days on feed before they are marketed.
This supports prices, but the upside is limited because packers could scale back hours to match tighter cattle supplies.
In the United States, dressed sales in the north ranged from US$187-$188, $1-$2 lower.
Northern feeding states re-gained their premium over the south. Week over week live sales in Colorado were $1.50-$2 lower at $118-$118.50 while southern regions traded at mostly $117, $3-$4 lower.
Chicago cattle futures fell all week as big speculative funds sold long positions. Long positions are bets that prices will rise.
D1, D2 cows ranged $81-$93 to average $86.60, up 30 cents.
D3 cows ranged $70-$84 to average $76.50.
Rail grade cows were $165-$170.
Slaughter bulls were $95.94, down six cents.
Auction volumes are slowing but remain ample. Western Canadian cow slaughter two weeks ago topped 10,000 head, the most since the fall of 2014 and the second largest since December 2013.
Tighter fed supplies should support non-fed slaughter rates.
Cow prices usually improve at this time of year, but recent prices have been fairly flat and the rally this year might be modest.
There was a weaker tone across the feeder and calf market.
Calves were generally $1-$3 per cwt. lower while yearlings were mostly $5-$8 lower.
It has been a hectic fall run, with Saskatchewan and Alberta auction mart volumes from September to November totalling 1.17 million head, more than 130,000 head larger than last year.
Throw in minimal exports and more imports of feeder cattle, and there are reports of feedlots being full, which will weigh on feeder demand.
Although prices are lower, basis levels are very strong.
The feeder cash-to-futures basis bounced back to positive territory after briefly being negative the previous week. The basis, at +$4.31, was the strongest since October.
Chicago feeder futures fell throughout the week and closed more than $5 per cwt. lower.
Auction mart volumes are expected to seasonally decline in the next few weeks, but demand for feeders may also continue to soften. Calf prices could be pressured lower. Bred cows were $1,650-$3,100, and bred heifers were $1,750-$3,150.
U.S. boxed beef prices were steady with Choice up 44 cents at $205.08 per cwt. and Select down 38 cents at $183.83.
The cutout started strong, but a weaker tone developed by the end of the week. Canadian prices were not available.
The American newsletter Cattle Buyers Weekly notes that even though turkey is major part of Christmas meals, bone-in beef rib roasts are also important for end-of-year meals.
The number of American stores with sales on rib roasts last year went from 360 at the start of December to 2,700 in week two and then soared to 14,250 in week three and 14,830 in week four.
The U.S. Livestock Marketing Information Center notes that the large supply of chicken, pork and beef is hurting turkey demand in the United States.
Annual turkey consumption this year is pegged at 5.2 billion pounds by LMIC, down from 5.3 billion in 2016, a decline of two percent.