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 jump
Fed steer and heifer prices took a hefty jump last week with steers rising by $5.07 per hundredweight to average $162.64 and heifer prices rising $4.63 to average $160.94 per cwt.
As of April 27, Alberta fed prices rallied $7.50 per cwt. in the previous two weeks and were sitting within $4.80 of the January highs.
With fed prices moving back to the low 160s, slightly positive feeding margins and strong basis levels have encouraged producers to pull cattle ahead of schedule. Many producers are indicating calf marketings are running well ahead of last year.
Western Canadian steer carcass weights rebounded 13 pounds and were sitting 20 lb. larger than last year. Carcass weights are expected to trend lower and seasonally should bottom in late May or early June.
In the live cattle futures market, the June contract has been trading at roughly a $17-$18 discount compared to April. This is one of the largest discounts June has ever been to April in recent history as larger fed cattle supplies are being priced into the market.
Cash to futures basis levels against the April live cattle futures was +5.45 last week. Looking at it from a different perspective, all the fed cattle that traded were being scheduled for the middle of May delivery, and cash to futures basis levels against the June market ranged from +24 to +28.
It is common to see basis levels strengthen from April to May. Basis levels in early May are traditionally the strongest of the entire year.
Weekly Canadian fed exports totalled 6,844 head, the second largest volume seen this year. Exports from Eastern Canada totalled more than 1,500 head, the largest volume seen this year.
In the outlook, there are rumblings that a Saturday shift is being added by one of the major western Canadian packers. Also of note, over the past 30 years, monthly average fed prices have strengthened only six times from April to May. The rally seen over the past couple of weeks could be short-lived.
In the United States, very light trade was reported last week with live sales in the south at US$121 and dressed sales at $195. Both live and dressed sales were fully steady with the previous week.
A stronger price tone was noted April 27 with live sales in the south reaching $124 and dressed bids reported up to $198 in Nebraska.
Feeder prices rebound
Warm weather renewed buying interest last week, and Alberta feeder prices rebounded $7-$8 higher. Light calves from 300-500 lb. surged sharply higher last week, and prices were trending generally comparable with a year ago.
Grass type 500-700 lb. calves saw prices firm $5-$6 higher than the previous week. Feeders over 700 lb. saw selective buying and prices rallied $3-$7 higher.
Last week’s Alberta feeder index surged almost $7 higher to $184.81 while the calf index firmed modestly to $214.58. Weekly auction volumes were 31 percent larger than the previous week at 24,749 head, fully steady with the same week last year.
Cow-calf pairs traded in a range of $1,600 to $3,000 last week.
Year to date auction volumes were 16 percent lower than a year ago, totalling 418,048 head. Feeder exports to the U.S. for the week ending April 14 surged 57 percent larger than the previous week to 7,705 head. Year to date, feeder exports are 36 percent larger at 71,216 head.
Feeder and stocker prices are expected to seasonally strengthen as supplies moderate, but feed prices could limit the upside. Feedlot managers will acquire some pen space in coming weeks but will be mindful to limit fill rates until the pen floors harden up.
Good demand is expected to continue for grass cattle and for 700-800 lb. feeders to place against the late fourth quarter of 2018 and the first quarter of 2019. Large feeders over 900 lb. will likely see limited buying interest and price upside when placed against the sluggish September-October fed market.
Slaughter bull prices strong
Prices for D1 and D2 cows, as well as slaughter bulls, were also up last week. Cows were up C$267 to average $96 per cwt., and bulls rose $2.92 to average $111.50.
Dressed cow bids were reported at around $182-$187 delivered. Butcher bull prices rallied to reach the strongest prices seen since the end of August 2017.
Western Canadian non-fed slaughter for the week ending April 21 was four percent smaller than the previous week at 7,168 head. Year to date, western non-fed slaughter was eight percent larger, totalling 134,973 head.
Canadian non-fed exports to the U.S. for the week ending April 14 were up 32 percent, totalling 3,215 head. Ample non-fed supplies are anticipated over the next few weeks with a flush of calving culls.
Beef trade higher
U.S. cut-out values rallied significantly higher last week with Choice $8.74 higher than the previous week, trading at US$220.15, and Select trending $6 higher to $204.48. The Choice/Select spread widened to $15.60 as Choice demand strengthened.
U.S. beef production at 508.5 million lb. is the largest weekly production seen this year. On a weekly basis, U.S. beef production is up six percent compared to the same week last year and nine percent larger than the five-year average.
Good grilling season beef demand is anticipated again this week, and cut-out values could firm higher.