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.
Slaughter volumes rise
Canadian fed slaughter volumes are up 10 percent compared to last year and Canadian fed cattle exports to the United States are running above year ago levels, so fed cattle supplies are being aggressively worked through the system.
Following seven consecutive weeks of lower prices, weighted average steer prices strengthened $2 per hundredweight, averaging $150.19 per cwt. Fed heifers also rose by $2.52 last week to average $149 per cwt.
Packer competition was more evident last week with all three western Canadian packers buying cattle. Dressed sales ranged from $250-$254 delivered. Packer lift dates started to tighten up. Two weeks ago they were buying cattle for three to five week delivery, but last week most cattle that traded were scheduled for the week of March 18.
Over the past 10 years, the average increase from first quarter lows to second quarter highs stands at 12 percent. Assuming first quarter lows are in the books, an historical increase would put fed prices on track to establish second quarter highs in the mid $160s per cwt.
With dry conditions last summer, grass cattle came in ahead of schedule and there could be a bigger than normal hole between yearlings and fed calf supplies. Placements of feeders weighing more than 700 pounds in October and November were down 11 percent and 17 percent, respectively, compared to the previous year
Fed prices are expected to trend higher into the spring and could rally 12 percent from first quarter lows to spring highs.
Over the past 30 years, slightly more than 50 percent of the time first highs have occurred in either March or April. Cash to futures basis levels historically strengthen from February to March. With fed cattle prices struggling for much of February and losses getting close to $250 per head, some feedlots have opted to push some February cattle into March.
D2 cows edge higher
Non-fed prices trended unevenly steady last week with D2 slaughter cow prices firming higher to average $83.75 per cwt., and D3 prices easing lower, averaging $73.57. Slaughter bull prices averaged $95.29 per cwt.
Dressed slaughter cow bids trended sideways from $162-$167 per cwt. delivered with the top end paid for fed white-fat cows with 70 plus days on feed.
Western Canadian non-fed slaughter had trended over 10,000 head for the previous five weeks, but for the holiday week ending Feb. 23 slaughter volumes eased 19 percent lower to 8,695 head.
Year to date, western non-fed slaughter was 14 percent larger at 80,382 head. Market supplies are beginning to tighten and seasonal price upside is anticipated.
A few more feedlots came to auction last week with warmer weather, and average prices eased modestly lower. Stocker prices traded barely steady to $5 per cwt. lower last week, and light feeders saw prices generally $2 per cwt. lower.
Large feeders over 800 lb. continued to seasonally soften with prices slipping $2.50-$5.50 per cwt. lower. The steer calf to yearling spread continued to widen to $45.95 per cwt., indicating aggressive interest in grass cattle and a sign of the current weak fed market.
Auction volumes of 33,680 head were 29 percent larger than the previous week but were 13 percent lower than the same week last year. Year to date auction volumes were down three percent compared with a year ago.
The U.S. Department of Agriculture reports Canadian feeder exports to the United States for the week ending Feb. 16 surged 98 percent larger than the previous week to 4,958 head. Feeder cattle exports typically trend seasonally larger through to the end of March. Year to date feeder exports were 17 percent larger, totalling 19,103 head.
Calf prices have firmed higher through March in three out of the past five years. From March through April, 500 to 600 pound steer calf prices have strengthened 10 out of the past 12 years. Prices for large feeders are expected to soften through the remainder of the first quarter.
U.S. cut-out values firmed higher last week with price improvement on almost all primals. Choice trended modestly US$1.88 per cwt. higher to average $219.95, and Select rallied $3.86 per cwt. higher, averaging $215.27.
U.S. cutouts are expected to gain momentum as post-Easter spring buying improves for middle meats. Canadian cut-out values for the week ending Feb. 16 were not available.