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.

Alberta direct cattle sales saw active trade this week, and dressed prices improved by $4-$6 per hundredweight from the previous week.

The majority of local trade was reported dressed from $256-$258 per cwt. delivered. A significant portion of this week’s offering traded to the United States at US$199 per cwt. A weaker Canadian dollar encouraged U.S. buyers to aggressively bid into this week’s Canadian cash market, so about 10,790 head went south.

Weighted average steer prices rallied $3.50 per cwt. higher than the previous week to average $153.78, while heifer prices pushed $7 per cwt. higher to average $156 per cwt.

So far this year heifer sale volumes are 20 percent larger than a year ago and steer volumes are up six percent.

This week’s Alberta-Nebraska cash basis continued seasonally soft, estimated at around minus $18.22 per cwt.

Basis weakens

On a cash to cash basis, Alberta calf prices are at a $10 per cwt. discount against the American market, while heavier feeders are at a $3 per cwt. discount.

Over the past couple of weeks, Saskatchewan and Manitoba 600 pound steer prices have been trading at a $1-$4 per cwt. premium over Alberta. These lightweight stockers are likely being supported by U.S. interest. Weekly feeder exports to the U.S. totalled 6,090 head, the largest weekly volume this year.

Alberta 850 lb. steer cash to futures basis levels weakened, going from -12.62 to -16.83 per cwt. this week. The last time basis levels were this weak was July 2016.

The steer-heifer calf price spread continues to widen, and over the past two weeks 550 lb. heifer calves have been trading $33-$34 per cwt. below the same weight steers. As spot barley prices continue to strengthen, pushing cost of gains higher, the steer-heifer prices spread is not expected to narrow.

The continued strength of the deferred live cattle contracts is supporting the heavyweight feeder market. On March 8, the August and October live cattle contract closed above US$117 per cwt.

The U.S. Department of Agriculture February cattle on feed report said inventories are seven percent larger than last year. This adds more fed cattle to the mix, and January marketing volumes were the largest since 2003.

January placements were down five percent, but drought conditions in the southern part of the country had more cattle entering feedlots earlier than normal.

Cow prices steady

Cow prices have stalled. Since the beginning of the year they have ranged from $82-$84.50 per cwt. Over the past 20 years, the only time prices stayed this flat was in 2003.

Auction market volumes are light, but slaughter volumes remain historically larger. Most of the cows being marketed are coming out of feedlots. They are marketing cows in a timely manner because western Canadian cow carcass weights are 19 lb. smaller than last year and fewer are grading D4.

Beef trade improving

U.S. cut-out values continued to firm higher this week with all Choice and Select primals gaining momentum. Choice surged $6.09 per cwt. higher than the previous week, and Select rallied $3.27 per cwt. higher with moderate to good demand reported on a generally light offering. Choice loin surged aggressively $12.56 higher than last week, and Select trended over $5 per cwt. higher.

Fresh U.S. 90 percent ground firmed at $1.63 per cwt. higher last week, closing on March 7 at $214.48 per cwt.

Meat and poultry stocks in cold storage at the end of January totaled 2.3 billion lb, slightly lower than last year.

Current Canadian cut-out values for the week ending Feb. 23 were not available.

National inventory

Statistics Canada released its January inventory report at the beginning of March that showed another decline in the beef cow herd. Cow numbers in Eastern Canada were down 1.4 percent compared to one percent lower in the West.

Alberta controls 41 percent of the national herd followed by Saskatchewan at 30 percent. There are 1.5 million cows in Alberta, and Saskatchewan saw a slight bump up to 1.1 million cows. British Columbia also reported an increase of 1.8 percent more cows at 208,300 while Manitoba’s herd fell 6.6 percent to 411,000 head. Ontario has 242,000 and has remained fairly stable.

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