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 stabilizes
The fed market stabilized last week following the second largest weekly price drop in the past five years. From their highs in January, fed prices have declined 13 percent and are trading at the lowest point since October.
Given the recent pullback in fed prices, cattle are being sold below breakeven levels in both Canada and the United States.
In western Canada, with breakevens in the upper $150s per hundredweight, losses are estimated to be around $175 per head. Negative margins and current feedlot inventories saw producers not overly-motivated to market cattle. Sale volumes were light last week as many producers were indicating cattle could easily stay on feed for another month. Buyers were making inquiries early in the week and a stronger tone was noted May 23.
Most of the dressed sales were reported at $245 delivered and deliveries were for the week of June 18. Western Canadian fed slaughter volumes for the week ending May 19 totaled 38,302 head, the third time this year that slaughter volumes have been below year-ago levels.
Canadian fed export volumes for the first two weeks in May were down 43 percent or 6,300 head compared to last year.
As for the outlook, Canadian fed supplies are not expected to increase to the degree the U.S. will over the next 30 days. That said, larger numbers are still ahead of us and timely marketings will be critical especially during the summer months.
Last year feedlots were profitable on their summer inventory. This is not expected to be the case this year, which could impact marketing rates and potentially keep carcass weights above last year.
In the U.S., Iowa trade trickled in from May 22-24 with dressed sales ranging from US $180-$182, which was $3-$5 lower than the previous week’s weighted average price. Other than very light trade in Iowa, significant trade did not develop in the other major feeding states.
BBQ season helps
D1 and D2 cows traded in a range of C$88-$104 per cwt. last week, to average $97.70. Slaughter bulls rose by $1.40 last week to average $113.31.
Non-fed prices firmed with supportive interest in feeder cows and great weather for grilling. Dressed cow bids firmed $1 higher ranging from $184-$189 delivered. Butcher bull prices rebounded following a two-week decline.
Western Canadian non-fed slaughter for the week ending May 19 was 11 percent lower than the previous week totaling 7,201 head. Year to date western non-fed slaughter was 12 percent larger totaling 166,036 head.
Continued good demand is anticipated as grilling season shifts into high gear. Low feed stocks and late spring grass has resulted in some green calving culls coming to market. Supplies are expected to remain manageable through summer, but a lack of spring moisture is causing concern in some areas. Dry pasture conditions could potentially flush a few more cows to market.
Feeders saw selective buying interest last week and prices trended unevenly steady. Good demand was observed for heifer calves less than 600 pounds to place against the first quarter fed market, and as grass cattle.
Steer calves from 400-600 lb. saw overhead resistance and prices realigned $5-$6 lower. Steers over 700 lb. firmed modestly higher last week and are the bunk replacement of choice.
Steer prices were $22-$26.50 per cwt. lower than the same week last year. The western Canadian feeder index rallied over $10 higher to $186.47 and the calf index was mostly steady at $209.84.
Cow-calf pairs traded from $1,625-$3,200.
Weekly auction volumes were 27 percent smaller than the previous week and year to date were 10 percent lower totaling 527,484 head. Feeder exports to the U.S. for the week ending May 12 were modestly lower than the previous week, totaling 9,571 head, but were the third largest weekly volume of this year.
Year to date feeder export volumes were 52 percent larger at 104,899 head.
The 20 and 30 year historical 550 lb. steer price trend indicates prices have likely plateaued. The 10-year historical price trend, however, tells a slightly more optimistic story on reduced cattle inventories, fewer feeders, and calf prices that continue to firm higher towards the end of June.
Auction volumes are expected to seasonally tighten and calf prices moving forward remain fundamentally well supported. Yearling prices are expected to track seasonally stronger until end of summer grazing in August.
Beef values lower
U.S. cutout values eased US $3.50 lower this week. Choice traded at $229 and Select at $204.93. There was generally light to moderate boxed beef demand on a moderate offering. Choice rib plummeted $14.50 lower than the previous week while Select trended sideways. Slaughter has ramped up for four straight weeks and for the week ending May 12 was 654,736 head, the largest weekly U.S. slaughter since June 2013.
Canadian cutout values for the week ending May 11 were not available.