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 steady
Fed prices closed last week fully steady with the previous week. Fed steer prices were down only slightly, by 15 cents, to average $160.54 per hundredweight. Fed heifers were up 17 cents to average $159.67. It was the third straight week that weighted average steer prices closed over $160 per cwt.
Last week top-end dressed sales were reported at $270 per cwt. delivered and were paid by both packers. Cattle that were bought last week would be lifted in one to two weeks.
U.S. packer interest was noted, and depending on freight and dressing percentage, bids were working back to the upper $150s per cwt. on a live basis. Last week, front-end live cattle futures established new contract highs. The bullish optimism in the cattle complex continues to be primarily weather driven because some U.S. states have received a record amount of moisture.
In Western Canada, cash prices did not keep pace with the gains seen on the futures market, resulting in weaker basis levels. Last year’s strong basis levels and positive feeding margins encouraged producers to sell fed cattle ahead of schedule. This is not the case this year.
Basis levels are much weaker than a year ago and a lot of the yearlings placed in late summer and early fall have breakevens in themed to upper $160s per cwt. Given that producers are facing negative feeding margins, fed cattle are not being pulled forward. With mild temperatures and good performance relative to last year, cattle are staying on feed for additional days.
For the week ending Jan. 12, western Canadian steer and heifer carcass weights are 27 and 34 pounds larger, respectively, than last year. Carcass weights could remain above year-ago levels right up to spring.
North American packer margins have narrowed because beef cut-out values have not kept pace with higher cattle prices. Reduced hours for western Canadian packers for January have moderated demand for cattle.
Slaughter bull price rises
Prices for D2 cows ranged from $76 to $91 per cwt. last week to average $83. D3 cows ranged from $65 to $80 to average $73.21. Slaughter bull prices rose by $3.79 last week to average $94.36 per cwt.
Non-fed prices traded unevenly steady last week. Dressed cow bids firmed modestly with bids reported from $163-$168 per cwt. delivered.
Western Canadian non-fed slaughter for the week ending Jan. 12 was 38 percent higher than the previous week at 9,858 head. Year-to-date western non-fed slaughter was four percent larger at 16,992 head.
Canadian cow carcass weights are running 11 lb. lower than the same week last year. A significant number of cows are on feed for the commercial white cow market. Boner cow offerings at auction are ample, and it appears some year-end tax cows are returning to the marketplace.
A backlog of slaughter cows is building, and prices could ease lower on large front-end packer supplies. Lean trim value has strengthened, which should encourage continued large non-fed harvest.
Good feeder demand
Alberta feeders saw good demand last week, and prices trended fully steady to higher. Light calves less than 500 lb. traded barely steady while 500-700 lb. calves trended fully steady to higher.
Feeders over 700 lb. traded mixed with steer prices reported generally steady and heifers easing $1-$2 per cwt. lower than the previous week. The majority of trade last week was for immediate delivery to likely replace recently marketed fed cattle. It should be noted that a significant volume of slaughter cows were reported at auction last week.
Year-to-date auction volumes total 41,267 head, seven percent larger than a year ago. The U.S. Department of Agriculture reports that Canadian feeder exports to the U.S. for the week ending Jan. 6 totalled 1,180 head. The USDA also reports that total 2018 feeder exports to the United States were 65 percent larger at 194,064 head.
The Canfax cattle-on-feed report of Jan. 1 showed larger steer placements for all weights during December, while heifer placements were lower across the board. Most electronic feeder sales last week were also steers. This may indicate more heifers will be offered in the future.
The steer-heifer calf price spread through December was the widest since March, and the spread will likely increase during the first quarter as steer calf prices firm higher. Good demand is anticipated for all calves this week, and prices should strengthen through the first quarter as buyers begin to shop for grass cattle.
Choice cutout down
The U.S. Choice cut-out value eased modestly lower last week to US$212.50 on seasonally soft demand. Select trended mostly steady at $207.64. Boxed beef movement is back to typical weekly trade volumes.