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 rally ends
After spending two weeks averaging in the low $160s, western Canadian fed prices exhausted their three-week price rally, closing $6 per hundredweight lower to average $157.77 for steers and $156.19 for heifers.
Ontario fed prices had a strong week as new annual highs were established. It is not uncommon to see the price spread between eastern and western Canada narrow.
In 2016 and 2017, eastern Canadian prices moved to a premium against Western Canada in late spring/early summer. Eastern Canadian fed prices are expected to regain their premium over the West in the upcoming weeks.
Local and U.S. buying interests were supportive last week in Alberta. Prices were hugely dependent on delivery dates. Most of the cattle that traded last week were being scheduled for late May/early June delivery with sales ranging from $262-$270 delivered. Producers were negotiating delivery dates for mid-June, and most of the sales were at $262 delivered for that time frame.
For the weeks ending April 28 and May 5, western Canadian fed slaughter volumes totalled 40,881 and 37,122 head, respectively. This ranks as the first and third largest weekly slaughter volumes seen this year.
Even though more calves are entering the slaughter mix, the amount of cattle grading Prime is surprising. Most recent data reports that Prime grades as a percentage of all A grade cattle was 3.8 percent, the second highest Prime percentage over the past two years. With more calves hitting the market, Prime/AAA grading tends to decline.
As for the outlook, packers may not be as long bought as they suggest because cattle are being lifted quicker than anticipated. That said, packers have bought a lot of cattle over the past few weeks and the leverage shift from cattle feeder to packer is occurring.
In the United States, last week saw light trade. Live sales in Colorado, Texas and Kansas were reported at US$122, which was $3-$4 lower than the previous week.
Cull cows move
Cull cow prices trended steady to higher last week. D2 cow prices were almost C$3 higher than the previous week, trading at $90-$106 to average $98.30 per cwt. Following a three week rally, butcher bull prices eased $1.75 lower to average $112.25.
Western Canadian non-fed slaughter for the week ending May 5 was slightly smaller than the previous week at 7,782 head. Year to date, western non-fed slaughter was 10 percent larger, totalling 150,735 head.
Canadian non-fed exports to the U.S. for the week ending April 28 were four percent larger at 2,996 head. Slaughter cows continue to be aggressively marketed on low feedstocks, and the higher salvage prices have been attractive.
Good feeder demand
Feeder prices ramped higher last week with good demand observed across the board for all types of cattle.
Light calves less than 500 pounds saw prices strengthen on modest offerings, and grass type 500-700 lb. calves firmed $2.50-$5 higher than the previous week.
Feeders over 700 lb. trended fully steady to higher as feedlot pens dry up and bunk space becomes available. Last week’s Alberta feeder index surged almost $3.50 higher to $186.47, and the calf index saw comparable gains, ending the week at $217.44.
Auction volumes have been seasonally large for the past two weeks. Year to date auction volumes are 12 percent lower than year ago, totalling 483,214 head.
Feeder exports to the U.S. for the week ending April 28 were 27 percent larger the previous week, totalling 7,980 head. Year to date feeder exports are 34 percent larger at 85,467. Cow-calf pairs traded at $1,750-$3,100.
In the outlook, prices for 500-600 lb. steers have historically strengthened 17 times in the past 30 years from May to June, and more recently prices have strengthened in seven of the past 10 years.
This year’s late spring has delayed grass cattle buying interest. It is highly probable calf prices will strengthen in the coming weeks.
Beef trade steady
U.S. cut-out values traded steady to higher this week with Choice up US$3.50 to $231.07 and Select trending sideways at $209.14. Moderate to good boxed beef demand continued last week on a moderate offering.
The Choice/Select spread continued seasonally wide at $21.93.
Canadian cut-out values rebounded higher for the week ending April 27 with AAA up C$5.30 and AA trending $3.79 higher.