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 prices climb on active trade

Alberta direct cattle sales saw active trade last week and average prices rise by $1.19 for steers to average $163.83 per hundredweight and by $1.59 for heifers to average $162.53.

Fed steer prices last week rallied five percent higher than annual lows seen five weeks ago during the second week of April. The bulk of live trade last week was reported at $162. Early dressed sales May 2 started out at $272 delivered and firmed to $275 delivered late that afternoon and on May 3.

Average rail sales were about $2.50 per cwt. higher than the previous week’s dressed trade. U.S. bids procured a few cattle last week with prices from US$213-$215. Light fed calves were on offer again last week and discounts for carcasses less than 700 pounds were reported.

For the slaughter week ending April 28, Canadian steer carcass weights plummeted 15 pounds lighter than the previous week to an 876 lb. average. Compared with the same week last year, steer carcass weights were 19 lb. heavier. Western Canadian fed slaughter for the week ending April 28 was 11 percent larger than the previous week at 40,881 head. Year to date western fed slaughter was nine percent larger, totalling 550,936 head.

Both the Canadian and western weekly slaughter volumes were the largest seen since late November 2017. Canadian fed cattle exports to the U.S. for the week ending April 21 were 18 percent smaller than the previous week at 5,595 head and year-to-date numbers were down 15 percent, totalling 83,644 head.

Through May, front-end supplies should continue to be pulled forward and show lists will remain manageable. Packers will need to offset light carcass weights by harvesting a few more cattle to maintain current large production. Beef freezer inventory for summer grilling is accumulating and an increased offering of larger cattle will soon shift leverage to the buyer.

In the U.S., live trade developed in the middle of last week from $124-$126 in most feeding areas, generally $2 higher than the previous week. Sales in the north were reported in a wide trade range from $190-$200. The majority of sales were around $195 delivered and the tone was steady to $1 higher.

Cow price drops

In non-fed trade, D1 and D2 cows traded in a range of C$88-$104 per cwt. to average $95.43. Slaughter bulls were up $2.50 over last week to average $114.

Canadian cow prices continued to trade below last year and the five-year average. For the beginning of May, it was the lowest Canadian cow price since 2013. Non-fed slaughter volumes continued to trend above year-ago levels. Slaughter volumes remain elevated in part because Alberta D1, D2 cow prices have been trading at a $16 premium to the U.S. cow market, which continues to limit Canadian non-fed exports. As well, given less than ideal calving conditions over the past month, more calving culls are hitting the market compared to last year.

Non-fed prices traded mixed through commercial auction facilities last week. Trading 50 cents lower, D1, D2 cow prices moved off annual highs while butcher bull prices are the highest since late August. With barley and forage prices higher than last year, speculative interest to dry lot cows over the summer has been limited.

Stockers rally

From lows in early April, calf and lightweight stocker prices have rallied $11-$16 while feeders over 800 lb. strengthened $6-$13 per cwt.

Seasonally larger volumes of heifers have been noted through commercial auction facilities. In some instances, heifers are making up 75 percent of the total offering.

Strength over the past few weeks has been noted on 800-900 lb. heifers with sales reaching up to $170. There has been seed stock interest on certain groups of heifers but the biggest factor supporting prices has been the grass market. Good demand and active buying interest is being observed on lighter conditioned heifers weighing 800-850 lb.

Compared to last year, fewer Manitoba grass and feeder cattle are coming west to Alberta. Eastern and U.S. bids may be more competitive than bids from the west.

Cattle on feed data over the past six months has shown larger placements in Canada and the U.S. As a result, larger fed supplies are coming this summer.

With year-over-year increases in fourth quarter placements in 2017 and first quarter placements in 2018, many North American feeder cattle have been marketed ahead of schedule. Placements moving forward will struggle to keep pace with year-ago levels, suggesting a potential year-over-year drop in second quarter placements for both Canada and the U.S.

Barbecue season

U.S. cut-out values continued to seasonally rally higher with Choice grades surging almost US$7.50 higher than the previous week, to reach $227.56, and Select more than $4.50 higher at $209.17. Strong Choice demand widened the Choice-Select spread to $18.39.

Canadian cut-out values for the week ending April 20 slipped C$3.28 and $2.57 lower than the previous week for AAA and AA, respectively. AAA rib eye firmed modestly to $9.61. Good grilling season beef demand should gain momentum as patio and picnic tables are put to service.

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